Indonesia land transactions require specific buyer and seller tax payments

In Indonesia, individuals and entities engaging in the sale and purchase of land or buildings must fulfill specific tax obligations before the transfer of rights can be processed. According to Asnaedi, Director General of Land Rights Determination and Registration at the Ministry of Agraria and Spatial Planning/National Land Agency (ATR/BPN), buyers are responsible for paying the Land and Building Acquisition Duty (BPHTB), while sellers are required to pay Income Tax (PPh).

These taxes are not paid to the Land Office. Instead, BPHTB is a local government tax paid to the respective regional authorities, whereas PPh is deposited into the state treasury through official Directorate General of Taxes (DJP) channels. Understanding these requirements prior to the verification by Land Deed Officials (PPAT) and the creation of the Sale and Purchase Deed (AJB) is essential for a smooth transaction process.