Bali continues to attract both local and international investors due to its lucrative real estate opportunities. However, before diving into property investment in Bali, it’s essential to understand the tax structure involved. This comprehensive guide will help you navigate Bali’s property tax system in 2025.

Types of Taxes When Buying Property in Bali

1. BPHTB (Land and Building Acquisition Duty)

This tax is paid by the buyer and is a mandatory requirement for the name transfer process at the National Land Agency (BPN). The BPHTB rate is 5% of the Taxable Sales Value (NPOP) after deducting the Non-Taxable Sales Value (NPOPTKP).

2. Final Income Tax (PPh Final)

This is paid by the seller and must be settled before the ownership transfer process begins. The rate is 2.5% of the transaction value.

3. VAT (Value Added Tax)

VAT applies when purchasing a property from a registered developer (Taxable Entrepreneur/PKP) and is charged at 12% of the selling price.

Government VAT Incentives (PPN DTP) – 2025 Update:

To stimulate the housing sector, the Indonesian government offers the following incentives:

• 100% VAT exemption for homes or apartments priced up to IDR 2 billion (valid until June 30, 2025).
  
  
• 50% VAT exemption for homes priced between IDR 2–5 billion (valid until December 31, 2025).
  
  

Eligibility Requirements:

• The property must be the first home under the buyer’s name.
  
  
• The property must be used for residence, not investment or rental.
  
  
• The purchase must be through a registered developer.
  
  

VAT is usually paid upfront at the time of purchase and handled directly by the developer. If you meet the criteria, the VAT charge will be reduced or waived accordingly.

Annual Property Taxes and Ownership Regulations

1. PBB (Land and Building Tax)

This annual tax is charged to the property owner and is calculated based on the Sales Value of the Tax Object (NJOP). The maximum rate is 0.5%, depending on the land and building value.

2. Rental Income Tax

If your property is rented out, you’ll be subject to rental income tax based on residency status:

• Indonesian citizens (WNI): 10% of gross income
  
  
• Foreign non-residents: 20% of gross income
  
  
• Foreign-owned company (PT PMA): 25% under corporate income tax
  
  

3. Property Ownership for Foreigners

Foreigners cannot own land under Hak Milik (freehold title). However, they can legally acquire property via:

• Hak Pakai (Right to Use) — under a personal name with a valid KITAS/KITAP.
  
  
• Hak Guna Bangunan (HGB) — through a foreign-owned company (PT PMA).
  
  

Practical Tips Before You Buy

• Always check BPHTB and PBB status before purchasing.
  
  
• Consult a licensed notary/PPAT to ensure legal compliance.
  
  
• Take advantage of VAT incentives (PPN DTP) while still available.
  
  
• Include all taxes in your investment budget planning.
  
  

Conclusion

Understanding property taxes in Bali is not just about compliance — it’s a key component of a smart real estate investment strategy. By being aware of the current tax structure and legal obligations, you’ll make more informed decisions and avoid potential legal pitfalls.

Want to learn more about how to legally purchase property in Bali as an expat or investor?
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