What tax do you pay when you sell a Bali leasehold — 2.5%, 10% or 20%? No rule says which

Two guides to selling Bali property, both written for foreign owners, contradict each other on one question. One gives a lease assignment its own row and a hak pakai transfer the next, prints the same low rate against both, and puts no rate against the sale of a freehold title. The other separates them by the seller’s tax residence, reserving the low rate for registered title such as freehold. Neither points at a document that chooses between them, and after a day in the ministry’s archive, neither can we.

What does the transfer tax actually attach to?

The lower figure is real, and the guides quote it correctly. Article 2(1)(a) of Government Regulation 34 of 2016 puts the final income tax on the transfer of a right over land and/or a building at 2.5% (dua koma lima persen) of the gross transfer value.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified Of the price, not of the gain. The finance ministry’s register records that regulation as in force since 08.08.2016, with no amending and no revoking instrument against it.^{Source: 2}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified As at 27.09.2026 PP 34/2016 stands unamended and PMK 81 of 2024 has been in force since 01.01.2025.

Establishing that took an extra step: the rule explaining how the tax is paid is dead. PMK 261/PMK.03/2016, whose own title makes it the procedure for paying and reporting this tax, is recorded as valid from 30.12.2016 to 18.10.2024 and revoked by PMK 81 of 2024 with effect from 1 January 2025.^{Source: 3}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified Anything written about this machinery before then and not revised describes a repealed text. How many guides still cite it we did not count.

Which leaves the question both guides skip: what counts as “a right over land” here? Article 191(2) of PMK 81 of 2024 answers it: the rights meant are all rights over land and/or buildings, “antara lain dapat berupa” — among other things, in the form of — the four rights the agrarian law regulates, plus strata title.^{Source: 4}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified The list is open. It names examples, not members.

The buyer’s side of the same transaction turns on a list that is closed. Article 44(3) of Law 1 of 2022 lists the rights whose acquisition bears the acquisition duty — hak milik, hak guna usaha, hak guna bangunan, hak pakai, strata title and hak pengelolaan — and a rental right is not in it.^{Source: 9}Direktorat Jenderal Perimbangan Keuangan, Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified That was the reasoning of our earlier piece on the acquisition duty; it does not travel to income tax. Article 16(1) of the agrarian law lists hak sewa — the rental right — fifth among the rights over land, immediately after hak pakai.^{Source: 7}JDIH Kementerian Perumahan dan Kawasan Permukiman, Last reviewed 27/09/2026Confidence: Verified

The same law goes further. Its elucidation to Articles 44 and 45 says hak sewa is set out separately because it is a hak pakai with particular characteristics.^{Source: 8}JDIH Kementerian Agraria dan Tata Ruang/Badan Pertanahan Nasional, Last reviewed 27/09/2026Confidence: Verified Hak pakai is one of the four the ministerial rule names. An argument that a rental right sits outside this tax runs against an open list pointing at a statute that includes rental rights and calls them a species of a named one. We tried to build it and could not.

Could a lease assignment count as rent instead?

The competing answer treats the money as rent, and it too has a text. Article 4(1) of Government Regulation 34 of 2017 taxes income from the letting of land and/or buildings at 10% (sepuluh persen) of the gross rental value, and Article 4(2) defines that value as every amount the tenant pays or owes, in any form, connected with the property let.^{Source: 5}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified A lump sum for the remainder of a lease is hard to place outside that wording.

Two things narrow it. Article 2(3) of Government Regulation 34 of 2017 takes income from lodging services and their accommodation out of the object altogether^{Source: 5}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified — the nightly takings of a villa on short lets, though not the lump sum paid for its lease. A villa let long-term earns no lodging income for that exclusion to reach, so what it collects stays inside Article 4(1). And the person taxed is the one letting: a tenant who sublets the remainder is letting, a tenant whose lease is cancelled so the landowner can grant a fresh one is not.

Both are ordinary: the guide arguing for the rental rate calls leasehold sales “commonly structured either as a sublease to the buyer or through the cancellation of the seller’s lease”. Which one applies changes the analysis before any rate is reached.

What changes if the seller is not an Indonesian tax resident?

Whether you are one is decided by a count, not by a feeling, and how Indonesia runs that count is its own question.

Article 26(2) of Law 36 of 2008 withholds 20% (dua puluh persen) of estimated net income on a non-resident’s sale or transfer of property in Indonesia, except what Article 4(2) governs.^{Source: 6}Direktorat Jenderal Pajak, Last reviewed 27/09/2026Confidence: Verified That exception is the hinge. Government Regulation 34 of 2016 states in its recitals that it implements Article 4(2) of the income tax law.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified If the disposal falls inside the transfer tax, the withholding on disposals switches off by its own terms and the lower rate is the answer. If not, it is not. Which instrument applies is therefore not a question about size: it decides the other two.

The second guide’s qualifier is right: withholding is “subject to treaty relief”, and which treaty applies depends on the seller’s residence. We have read no treaty for this piece.

The three quoted rates are not a menu. Each belongs to a different instrument and is charged on a different base: a share of the price on a transfer, a share of the rent on a letting, a share of an estimated net on a non-resident’s disposal. Set side by side as though a rule chose between them, they are a comparison that is not one — and nothing we read says which of the three texts governs a lease assignment.

The case against our reading — where we may be wrong

Our reading is a reading of silence, and that is its weakness. An open list is evidence that a rental right is not excluded. It is not authority that it is included.

A reader who wants the opposite conclusion has material. Every right the ministerial rule names is registrable, and the collection machinery follows that pattern. Articles 3(5) and 7 of Government Regulation 34 of 2016 condition the signing of the deed or auction record, and the land agency’s grant or transfer of a right, on proof that the tax has been paid.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified A rental right passes through neither gate, and a tax enforced through the land office is built for rights it registers.

We found no ruling, and the absence is the finding — so here is the search, in repeatable form. We queried the finance ministry’s register at jdih.kemenkeu.go.id for “hak sewa” and the tax authority’s site for “pengalihan hak sewa”, looking for any ministerial regulation, circular, published ruling or tax-court decision scoping this tax to or out of the assignment of a rental right, and opened none: the register returns thousands of keyword matches, none on its first page about this tax, and the authority’s pages on Article 4(2) discuss registered rights without mentioning a rental right.Unverified

One refusal changed which document we used: peraturan.bpk.go.id, the national status register, returned a 403 on 27.09.2026, so currency came from the ministry’s record. A document we failed to find may exist; a reader who has one should send it to us.

We did not ask a notary. Practice at a Badung land-deed office may follow neither reading, and that is what a seller meets.

The documents are awkward to read. All three files from the ministry’s archive are OCR’d scans, damaged differently. Both government regulations print the percent sign as “o/o”, so their rates were read from the bracketed words — “dua koma lima persen” and “sepuluh persen” — not from the glyph. The ministerial regulation substitutes “cl” for the letter d across the pages defining the taxed object, but prints its percent sign cleanly on the page carrying the rate, where we read it. The income tax law we read as served text, needing no workaround.

One sentence deserved two readings. The elucidation to Articles 44 and 45 is what the argument leans on, and the copy we held came from the housing ministry: a hand re-keyed 2009 compilation of the gazette, not a scan. A typing error in a clean text layer is invisible. So we read it again in the agrarian authority’s own copy. The two print it identically.

What can a seller actually do before signing?

Ask which instrument the notary will file under, in writing, before the price is agreed: the three rates are far enough apart to be a price term. Ask which structure the deal uses, because that decides who, if anyone, is letting.

And keep the two taxes apart. Article 45(2) of Law 1 of 2022 makes the taxpayer for the acquisition duty whoever acquires the right over land and/or the building.^{Source: 9}Direktorat Jenderal Perimbangan Keuangan, Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified The income tax here falls on whoever gives that right up. A seller offering to cover the buyer’s duty is making a price concession.