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Bali Property Tax: What You Need to Know Before You Buy a Property in Bali

Before investing in Bali property, it’s crucial to understand the Bali property tax system and its implications. In this article, we will explore everything you need to know about Bali property tax.

What is Bali Property Tax?

All property owners in Bali are required to pay Bali property tax, regardless of their nationality or residency status. This includes individuals, companies, and other legal entities that own or possess properties in Bali. Even if the property is used solely for personal use and not generating any income, Bali property tax still applies. However, some exemptions and deductions are available for low-income earners, religious institutions, disabled people, and other eligible groups.

Foreigners who own property in Bali are also subject to Bali property tax and must comply with the regulations to avoid any legal consequences.

Failure to pay Bali property tax can result in penalties, fines, and legal action by the government. It’s essential for property owners in Bali to understand the Bali property tax system and comply with the regulations to avoid any legal consequences.

Types of Bali Property Taxes

Land and Building Tax (PBB)

Land and Building Tax (PBB) is a tax levied on properties in Indonesia, including Bali, based on their assessed value. PBB is divided into two types of taxes: Land Tax (Pajak Bumi) and Building Tax (Pajak Bangunan). The Land Tax is imposed on the value of the land, while the Building Tax is imposed on the value of the building. The assessment is based on factors such as the location, size, and type of property, and is determined by the local government.

The tax rate for PBB is set by the central government and varies depending on the assessed value of the property. Property owners must pay PBB annually, and failure to do so can result in penalties and fines.

Working with a professional and experienced property agent or lawyer can help ensure that all relevant taxes and regulations are properly addressed in the transaction process.

Luxury Goods Sales Tax (PPnBM)

PPnBM is a one-time tax that is paid by the buyer or importer of the luxury goods. The tax rate for PPnBM varies depending on the type of luxury goods and their value. The tax is levied on the sale of new vehicles, motorcycles, yachts, private jets, and other luxury goods.

Luxury Goods Sales Tax (PPnBM) can also be relevant in the context of Bali property sales, especially for high-end properties such as villas and luxury apartments. If the property being sold is considered a luxury property under Indonesian tax regulations, PPnBM may apply. This means that the buyer will need to pay a one-time tax based on the property’s assessed value.

The PPnBM rate for luxury properties is typically higher than the standard property tax rate.

Value-Added Tax (PPN)

Value-Added Tax (PPN) is a tax levied on goods and services in Indonesia, including Bali. In the context of Bali property sales, PPN is applicable to certain types of transactions, such as the sale of commercial properties and leasehold agreements.

PPN is set at a rate of 10% of the transaction value and is usually borne by the buyer. However, in some cases, the seller may agree to absorb or share the PPN cost with the buyer.

Property buyers and sellers in Bali should be aware of the PPN regulations and ensure that they are properly addressed in the transaction process.

Income Tax (PPh)

In Bali, Indonesia, income tax or PPh (Pajak Penghasilan) is a crucial aspect of property sales. When a property is sold, the seller is subject to pay PPh on the capital gain that they receive from the transaction.

The capital gain is calculated as the difference between the selling price and the initial cost of the property, plus any relevant expenses incurred during the sales process. The PPh rate varies depending on the length of ownership of the property and the Indonesian tax regulations applicable at the time of the sale.

Foreigners who own property in Bali are also subject to PPh and may have to pay additional taxes related to their status as non-resident taxpayers.


The content of this article is intended to provide a general guide to the subject matter. It is not intended to be comprehensive nor does it constitute legal or tax advice. We are not a legal advisor or a tax consultant and we do not provide any legal or tax services. You should seek professional advice before acting or refraining from acting on any of the content of this article.

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