Key points

  • On acquisition, BPHTB (transfer duty) is capped by Law HKPD No. 1/2022 at 5% of the acquisition value — or of the NJOP cadastral value where higher. A non-taxable allowance (NPOPTKP) of at least IDR 80 million applies to a first acquisition in a given region.
  • BPHTB attaches to transfers of registered rights (freehold, HGB); a pure lease (hak sewa) sits outside it — one of the economic reasons Bali runs on leasehold.
  • While holding, the annual PBB-P2 land-and-building tax is municipal: assessed on 20% to 100% of NJOP after an allowance of at least IDR 10 million, at rates set by each regency.
  • On rents, income tax is final: 10% of gross rent for individuals and companies alike (PP No. 34/2017) — service and maintenance payments included in the base, nothing deductible.
  • A PT PMA pays standard corporate income tax (22% of net profit per market analyses), then dividend withholding on distribution: compare structure versus direct holding after tax, never before.

Acquisition: one duty, two bases

BPHTB is computed on the higher of the agreed price or the NJOP — the administrative value each regency assigns to the property. Negotiating the price does not mechanically reduce the duty: where NJOP is higher, NJOP governs. Law HKPD No. 1/2022 delegated the tariff to local regulations (perda) under a national 5% cap; Bali practice sits at that cap.

Holding: a municipal tax with real local variance

PBB-P2 belongs to the regencies: Badung, Gianyar and Tabanan neither retain the same fraction of NJOP nor the same rate. The amounts remain modest against property value, but they deserve line-by-line verification — the annual assessment notice (SPPT) is the reference, and a misclassified property can be challenged.

Rents: ten percent, full stop

The PP No. 34/2017 regime has one virtue: simplicity. Ten percent of gross rent, final, whether the landlord is an individual or a company. Its counterpart: nothing is deductible — the base even includes maintenance and service payments tied to the lease. A Bali rental yield therefore starts its life 10% away from net reality, before operating costs.

Structure: compare after tax

Holding through a PT PMA changes the nature of the tax: net rental results join taxable profit under corporate income tax, and distributions bear their own withholding. Depending on flows, horizon and exit, direct holding under final tax or the corporate route wins — it is arithmetic, not doctrine — an arbitration our Balinese operations settle case by case, after tax. Our PT PMA piece covers what the corporate route demands besides.

General information, verified at publication date. Rules change: every transaction calls for licensed local advice.