Likupang, North Sulawesi Property Taxes for Foreigners (2026)

Foreigners investing in Likupang property in 2026 will encounter several key taxes: a 5% BPHTB acquisition duty, an annual PBB property tax ranging from 0.01% to 0.2%, and a 10% PPh on rental income. Upon selling, a 2.5% PPh on the transaction value applies. The chosen ownership structure, whether personal leasehold or via a PT PMA, significantly influences these tax liabilities and administrative processes for your Likupang invest.

Understanding Property Taxes in Likupang, North Sulawesi for Foreigners (2026)

For individuals considering property acquisition in Likupang, North Sulawesi, a clear understanding of the Indonesian tax landscape is fundamental. This guide outlines the primary taxes a foreign buyer can expect to face in 2026, offering indicative ranges and clarifying the mechanisms involved. While the tropical appeal and growth potential of Likupang for foreign investment are strong, a comprehensive grasp of tax obligations is crucial for effective financial planning and compliance.

It is crucial to state upfront: this information is for general guidance only and does not constitute legal, tax, or financial advice. Indonesian tax laws are complex and subject to change. Anyone planning a Likupang invest must engage independent, licensed Indonesian professionals, including a notaris/PPAT (public notary/land deed official), a tax consultant, and a lawyer, to ensure full compliance and protect their interests. Bali Premium Trip operates as an independent concierge and property broker, not an asset owner or a licensed legal/tax/financial advisor. We offer no guarantees regarding investment returns.

Key Property Taxes for Foreign Buyers in Likupang

Foreigners acquiring property rights in Likupang will encounter several types of taxes, both at the point of acquisition and on an ongoing basis. These are primarily central government or regional government levies.

1. BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan – Land and Building Rights Acquisition Duty)

BPHTB is a transfer tax paid when acquiring rights over land and/or buildings. It applies to various transactions, including sales and purchases, exchanges, grants, and inheritance. For foreign buyers, this is one of the initial significant costs.

Rate: The BPHTB rate is fixed at 5% of the transaction value or the Nilai Perolehan Objek Pajak (NPOP – Tax Object Acquisition Value), whichever is higher. This value is determined by the local tax office based on the sale price or government-assessed value.
Calculation: The 5% rate is applied to the NPOP after deducting the Nilai Perolehan Objek Pajak Tidak Kena Pajak (NPOPTKP – Non-Taxable Tax Object Acquisition Value), which is a regional threshold that varies but is typically around IDR 80 million for residential property in North Sulawesi. So, the effective taxable amount is NPOP – NPOPTKP.
Who Pays: Generally, the buyer is responsible for paying BPHTB. This payment must be made before the transfer of ownership rights can be officially processed by the notaris/PPAT.
Indicative Cost: For a property transaction valued at IDR 2 billion (approximately USD 125,000 as of late 2024), the BPHTB due would be 5% of (IDR 2,000,000,000 – NPOPTKP), which is roughly IDR 96 million.

2. PBB (Pajak Bumi dan Bangunan – Land and Building Tax)

PBB is an annual land and building tax levied by the local government. This is an ongoing cost for property owners in areas like Likupang.

Rate: The PBB rate is typically between 0.01% and 0.2% of the Nilai Jual Objek Pajak (NJOP – Tax Object Sale Value), which is the government-determined market value of the land and buildings. The specific rate and calculation method can vary slightly by region within North Sulawesi.
Calculation: PBB is calculated on the NJOP after deducting the Nilai Jual Objek Pajak Tidak Kena Pajak (NJOPTKP – Non-Taxable Tax Object Sale Value), a fixed amount usually around IDR 10 million for residential property. The resulting value is then multiplied by a percentage known as Nilai Jual Kena Pajak (NJKP – Taxable Sale Value), which is typically 20% for non-plantations and non-forestry properties below IDR 1 billion, and 40% for properties above IDR 1 billion. The final PBB rate (e.g., 0.1% or 0.2%) is then applied to this NJKP.
Who Pays: The registered owner of the property (or the holder of the Hak Guna Bangunan/Hak Pakai rights) is responsible for paying PBB annually.
Indicative Cost: For an average villa plot in Likupang with an NJOP of IDR 1.5 billion, the annual PBB could range from IDR 600,000 to IDR 1,200,000, depending on the specific regional percentage and NJKP application.

3. PPh (Pajak Penghasilan – Income Tax)

PPh applies to income generated from property, both from rentals and from its sale.

PPh on Rental Income (PPh Final)

Rate: For rental income from land and/or buildings, a final PPh of 10% applies. This means it is a flat tax on the gross rental income, and no further tax calculations are needed for this specific income.
Who Pays: The property owner receiving the rental income is responsible for paying this tax. If the tenant is a corporate entity, they may be required to withhold the tax and remit it directly to the tax office on behalf of the owner.
Compliance: This tax typically needs to be paid monthly or quarterly, depending on the total income.

PPh on Sale of Property (PPh Final)

Rate: When a property owner sells their land and/or building, a final PPh of 2.5% of the gross sale transaction value applies. This is paid by the seller.
Who Pays: The seller is responsible for paying this tax. The notaris/PPAT will usually ensure this tax is paid before the deed of transfer can be processed.
Exemptions: There are limited exemptions, for example, for individuals selling their primary residence with certain conditions, but these typically do not apply to investment properties or foreign-owned entities.

4. PPN (Pajak Pertambahan Nilai – Value Added Tax)

PPN is generally a consumption tax on goods and services. In the context of property, it primarily applies to new constructions or transactions with developers.

Rate: The standard PPN rate in Indonesia is 11%.
When it Applies: PPN is usually levied on the sale of new buildings by registered developers. If you are buying a pre-existing property from a private individual (not a developer), PPN typically does not apply. However, if you are purchasing a newly built villa in Likupang from a development company, the 11% PPN will be added to the property price.
Who Pays: The buyer typically bears the cost of PPN, which is collected by the developer and remitted to the tax authorities.

Ownership Structures and Their Tax Implications for a Likupang Invest

The method through which a foreigner holds property rights in Likupang significantly impacts tax obligations and legal standing.

1. Personal Leasehold (Hak Sewa)

This is the most common and straightforward method for individual foreigners to control land in Indonesia. It involves leasing land directly from an Indonesian landowner for a specified period.

Mechanism: A lease agreement (Perjanjian Sewa Menyewa) is signed, typically for a period of 25-30 years, with options for extension. This agreement is legally binding and often notarized.
Tax Implications:
- BPHTB: Generally not applicable for pure leasehold agreements, as no “transfer of rights” (Hak Milik, HGB, Hak Pakai) occurs. However, if the lease is structured as a transfer of a building with a lease for the land, BPHTB may apply to the building component.
- PBB: The original landowner generally remains responsible for the PBB on the land, though the lease agreement often stipulates that the lessee (foreigner) will reimburse the landowner for this annual tax.
- PPh on Rental Income: If the foreigner then rents out the property they lease, the 10% final PPh on rental income applies to their earnings.
- PPh on Lease Transfer/Sale: If the foreigner transfers or “sells” their leasehold interest to another party, any profit generated might be subject to personal income tax, or a specific PPh on transfer of rights if structured as such. This area requires careful legal and tax consultation.
Advantages for Likupang invest: Simpler setup, lower initial acquisition costs than setting up a PT PMA.

2. Via a PT PMA (Foreign Investment Company)

For more substantial or commercial property investments, establishing a PT PMA (Perseroan Terbatas Penanaman Modal Asing – Foreign Investment Limited Liability Company) is a common route. A PT PMA, being an Indonesian legal entity, can hold various property rights.

Mechanism: A PT PMA is incorporated in Indonesia, with foreign ownership. This company then acquires property rights in its name. The most common rights for a PT PMA are Hak Guna Bangunan (HGB – Right to Build) and Hak Pakai (Right to Use).
Hak Guna Bangunan (HGB): This grants the right to construct and possess buildings on state land or Hak Milik land for a specified period, typically 30 years, extendable for 20 years, and renewable for another 30 years. This is a robust right allowing for significant development.
Hak Pakai (Right to Use): This grants the right to use and/or collect produce from state land or Hak Milik land for a specified period, typically 25 years, extendable for 20 years, and renewable for another 25 years. It is generally suitable for residential use or office space.
Tax Implications for PT PMA:
- BPHTB: The PT PMA will pay the 5% BPHTB upon acquiring HGB or Hak Pakai rights.
- PBB: The PT PMA, as the holder of HGB or Hak Pakai, is directly responsible for paying the annual PBB.
- Corporate Income Tax (PPh Badan): Instead of personal PPh, the PT PMA is subject to corporate income tax on its net profits, including rental income. The standard corporate tax rate in Indonesia is 22% (as of 2024). This requires full accounting and annual tax reporting.
- PPh on Sale of Property: If the PT PMA sells a property (i.e., transfers its HGB or Hak Pakai rights), the 2.5% final PPh on sale applies to the transaction value, paid by the PT PMA as the seller.
- Dividend Tax (PPh Pasal 23/26): Profits distributed by the PT PMA to its foreign shareholders as dividends will be subject to a withholding tax, typically 20% or a reduced rate under an applicable tax treaty.
Advantages for Likupang invest: Stronger, more formal land rights, suitable for commercial development or multiple properties, clearer legal framework for asset holding.
Disadvantages: Higher setup and ongoing administrative costs (company establishment, annual audits, corporate tax compliance).

Other Important Considerations for Likupang Property

Notaris/PPAT Fees

The notaris/PPAT plays a pivotal role in any property transaction in Indonesia. They are public officials authorized to draft and legalize land deeds and other legal documents, ensuring compliance with land law.

Fees: Notaris/PPAT fees are typically based on a percentage of the transaction value. These indicative fees can range from 0.5% to 1.5% of the property value, plus stamp duty and other administrative costs. For a transaction of IDR 2 billion, expect fees to be in the range of IDR 10 million to IDR 30 million, excluding other minor disbursements.
Role: They verify ownership, ensure all taxes are paid, and register the transfer of rights with the National Land Agency (BPN).

IMB/PBG (Izin Mendirikan Bangunan / Persetujuan Bangunan Gedung)

The IMB (Building Permit) has been replaced by PBG (Building Approval). Any construction or significant renovation on a property in Likupang requires a PBG from the local government. This ensures the building complies with zoning regulations, safety standards, and architectural guidelines. Operating a property without a valid PBG can lead to fines and legal complications, including difficulties in selling or leasing the property.

RDTR Zoning (Rencana Detail Tata Ruang)

Before any Likupang invest, particularly for development, it is essential to check the Detailed Spatial Plan (RDTR) for the specific area. This local zoning plan dictates what types of buildings and activities are permitted on a particular plot of land (e.g., residential, commercial, tourism, green belt). Understanding the RDTR prevents future issues with building permits and ensures your planned use is compliant.

Important Disclaimer

This information serves as a general guide to property taxes for foreigners in Likupang, North Sulawesi, in 2026. It is not intended as, and should not be construed as, legal, tax, or financial advice. Indonesian laws and regulations are dynamic and complex, with specific interpretations and applications varying based on individual circumstances and regional policies. Tax rates, thresholds, and regulations can change without prior notice.

Bali Premium Trip is an independent concierge and property broker. We are not a licensed legal, tax, or financial advisory firm, nor are we asset owners. We cannot guarantee investment returns. It is mandatory for all prospective investors to consult with independent, licensed Indonesian professionals, including a notaris/PPAT, a tax consultant, and a lawyer, before making any property investment decisions. These professionals can provide tailored advice based on your specific situation and the most current regulations.

Frequently Asked Questions about Likupang Property Taxes

Does the 2.5% PPh on property sale apply to foreigners transferring a leasehold?

Generally, the 2.5% final PPh on sale applies to the transfer of Hak Milik, HGB, or Hak Pakai rights. For a pure leasehold transfer, the situation can be more nuanced. If the transfer involves the sale of a building on leased land, the PPh might apply to the building component. If it’s purely a transfer of the lease agreement, any profit made by the seller might be subject to general personal income tax (PPh Pasal 25/29) rather than the final 2.5% PPh. Always consult a tax professional for clarity on your specific leasehold transfer structure.

Are there any property tax incentives for Likupang as a Special Economic Zone (KEK)?

Likupang is indeed designated as a Special Economic Zone (KEK Pariwisata Likupang). While KEKs often offer various fiscal incentives, these are primarily aimed at businesses and investors establishing operations within the zone, such as corporate income tax holidays, import duty exemptions, and streamlined permits. For individual foreign property buyers, the standard property taxes (BPHTB, PBB, PPh) as outlined above generally still apply. Specific incentives for individual residential property ownership are less common, but businesses operating within the KEK might see benefits on their operational income. A dedicated tax consultant familiar with KEK regulations is best placed to advise on specific business incentives.

What happens if I don’t pay my annual PBB tax for my Likupang property?

Failure to pay PBB annually can result in penalties, including fines and interest charges on the overdue amount. Persistent non-payment can lead to legal action by the local government, potentially including liens on the property or even public auction in extreme cases, though these are rare for individual residential properties. Furthermore, you will not be able to sell or transfer your property rights if there are outstanding PBB obligations, as the notaris/PPAT will require proof of full payment before processing any deed of transfer. It is always advisable to pay your PBB on time to avoid complications for your Likupang invest.

Navigating the tax landscape for property investment in Likupang requires careful consideration and expert guidance. For personalized assistance with your Likupang invest journey, including connecting with trusted local professionals, talk to our concierge today. Explore more about property opportunities at Likupanginvest.