The Indonesian Property taxes for professional

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When you hear about the word tax, usually every adult will tend to be possessive and dodge, as if the tax is a scourge for all people. But did you know that the successful development of a country depends on the tax? Tax is one form of shared responsibility between government and society. Tax is an obligation as well as forms of devotion and the role of citizens in order to take part carry out national development.

Would you believe that was the history of taxes has been started since the time of Pharaoh? and even real tax issues have existed since long in the history of mankind. Well, supposedly created tax reportedly due to the human need to live in groups because the dependence of each other. How to live in a group or organization like this which then creates country. With the formation of the state is then required to finance the expenditure of resources together, so we need a way to mobilize the resources one way of taxes.
Tax is generally a compulsory fee levied by the government of the people in this case taxpayers to meet routine expenditure and development funding state without obtaining remuneration directly. Understanding tax according to Law No. 28 of 2009 on Local Taxes and Levies (PDRD) Article 1, are:

“The contribution required to state (regional) owed by the personal or entity that is enforceable under the Act by not getting benefits directly and used for countries (regions) for greatest benefit and prosperity of the people”.
Besides, there are also other fees with the same goal which is called a levy. However, retribution is the local charges as payment for services or a specific licensing granted by the local government for the benefit of the individual or entity. Example: Parking Levy, Levy Mineral Sands and others.
From some sense we understand it turns out it can be concluded that there are five main elements in the definition of taxes, namely fees / charges, levied must be based on the Act, can be enforced, do not accept counter achievement directly and used to finance general government spending.
You should know that the tax actually has several functions not only as a source of state revenues (budgeted function) used to finance the construction but also to other functions such as:

  • The allocation function which serves as a source of tax revenues the state which is then used to be allocated for routine spending.
  • Regulatory function is the tax function that is used as a tool to set or achieve certain goals.

If the view of those who bear the burden of the tax base can be directly or indirectly.with the understanding as follows. Direct taxes are taxes that are charged to taxpayers after the issuance of Notice of Tax (SPT), which imposed a periodic basis within a specified period. Examples are income tax (income tax), property tax (PBB), street lighting tax, motor vehicle taxes, and so forth. While Indirect Taxes are taxes imposed on the taxpayer at a particular time or when there is a taxable event, such as value added tax, import tax under the name of motor vehicles and others.
Viewed from whom the tax collector, the tax can be differentiated into or state tax center tax and local taxes. Called by the central tax, if the tax levied by the central government. Examples of central taxes is the income tax, VAT, VAT and Stamp Duty.Meanwhile, local taxes, if tax collection is carried out by local governments. Examples of local taxes is the spectacle tax, advertisement tax, Motor Vehicle Tax, property tax, Contributions cleanliness, Levy terminal, parking levies, levies excavation of sand and others.
Besides, if we look at the types of taxes according to their properties so we too can differentiate into various tax subjective and objective. Taxes say manifold subjective, if the taxes imposed taking into account the state of the taxpayer. In this case the determination of the amount of tax must have objective reasons related to ability to pay the taxpayer. Examples of this type is the individual income tax. While the objective type tax, if the tax is imposed based on the object held regardless of the taxpayers themselves. Examples of this type of tax is the VAT, property tax, VAT for luxury goods.

Property Taxes

What exactly is meant by property? Generally, property can be defined with everything thing we can have. Property itself can be grouped into four types: real property, personal property, businesses property and financial interests. According to the Standard Assessment of Indonesia (SPI) property is defined as a legal concept that covers all the interests, rights and benefits of ownership. On the understanding that we can distinguish between the physical control of land and or buildings in this thing called the real estate and legal ownership or control of the juridical-called real property.

For those of you who engaged in the business world certainly will not escape from the problem of taxation. Similarly, in any buying or selling property would contain tax payment obligations. Taxes will be charged to the buyer and seller of property.

Why is physical control and mastery over the land legally and / or buildings need to be taxed? This is not independent of property tax functions as one of the sources of state revenue (budgeted function) used to finance the development and regulatory functions in which the property tax is used as a tool to regulate development property market.

Such as buying property activities are carried out individually or through a developer or property developer, will contain the consequences of liability that is the aspect of taxes to be imposed on the government to you. However usually the property tax has been included in the sale price if you buy a property through a developer / property developer. The amount of tax depends on the type, value, extent and location of properties to be transacted.

Below are the types of property tax charged to both buyers and sellers of properties will be discussed in this book include:

  1. Land and Building Tax (LBT).  The LBT is an inherent property taxes levied on its object each year and subject to all taxpayers (property owners). Initially, this tax is a tax that the administration was handled by the central government but the entire revenues distributed to the regions with a certain proportion. In subsequent developments with the enactment of Law No. 28 of 2009 on PDRD then starting in 2014 all the tax management process will be undertaken by local governments.
  2. Duty on Land and Building Acquisition. This charge imposed on all property transactions, both new and old properties purchased from the developer or individual. This tax was initially equal status with the UN which is the process of tax administration was handled by the central government but the entire revenues distributed to the regions with a certain proportion, whereas with the enactment of Law No. 28 of 2009 on PDRD the start of 2011 the entire process of managing this tax will carried out by local governments.
  3. Income Tax. Income Tax imposed on the seller’s individual or entity.
  4. Value Added Tax. This tax is only charged once when buying a new property, either from developers or individuals. If buying property from developers, for the payment and reporting is usually done through the developer. But if you buy from someone, payments made after the transaction itself. Besides, this tax is also imposed on housing construction, which is conducted solely by the individual or entity.
  5. Luxury Goods Sales Tax. Luxury sales tax charged only to property purchased from the developers and meet the criteria as a luxury item. Luxury sales tax does not apply to transactions between private individuals.

Schematic flow of property transactions tax on to explain that in case of transfer of land, then the landowner will pay a final tax on income from transfer of rights to land and or building (Article 4 paragraph (2)) of 5% and buyers, both individuals or developers will pay Duty on Land and Building Acquisition by 5% as well. If then the developer develop the land into:

  • Lot ready to build and sell to consumers A, then the consumer will pay BPHTB A 5% and VAT at 10%,
  • Apartment / town house with certain criteria B and sell it to consumers, then consumers will pay BPHTB B 5%, VAT at 10% and 20% luxury sales tax,
    Housing and sell to the consumer C, then the consumer will pay BPHTB C at 5%, VAT at 10% and 20% luxury sales tax (if it fulfills the criteria required.)
  • If the customer then A build buildings and entry criteria required on the lots he had bought from developers such as yourself then obliged to pay VAT Activities Build Your Own 4%. If then the consumer B renting apartments / town houses that have been bought from the developer to the consumer D, then the consumer B must pay a final income tax of Article 4 paragraph (2) by 10%. Conversely, if B then do not rent it but menjualknya to consumer E then E customer will pay BPHTB 5% and consumer B will pay income tax by 5%.

However, when then-party developers to develop the land into housing and get in on the specific criteria required, and then sell them to consumers C, then the consumer will pay BPHTB C at 5%, VAT at 10% and 20% luxury sales tax.

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About Eddhi Wahyudi H

Location: Jakarta, Indonesia Employer: Directorate Generale of Tax, Ministry of Finance Republic of Indonesia. Interest: Indonesian Property Tax System, Financial Management, Strategic Management
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2 Responses to The Indonesian Property taxes for professional

  1. Assalamu’alaikum
    pak, menurut bapak bagaimana peranan kantor pertanahan terhadap pengawasan pemenuhan BPHTB?
    mohon bimbingannya pak, saya sedang menyusun tugas akhir.
    terima kasih,
    semoga Allah membalas dengan kebaikan yang banyak.

    • eddiwahyudi says:

      Kantor pertanahan dlm UU 28/2009 tdk memiliki peranan khusus utk mengawasi pengawasan BPHTB. Namun secara kebijakan dan dlm rangka koord bisa disinergikan dulu menggunakan SKB antara BPN, bank, depkeu dan pemda..

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