If you’re considering buying property in Lombok, understanding the local tax system is essential. Unlike some countries with high annual property taxes, Indonesia’s property tax system is relatively low, making Lombok an attractive investment destination.
But what taxes do you actually need to pay when buying, owning, or selling property in Lombok?
This guide covers everything you need to know about property taxes in Lombok, including annual property tax, land tax, purchase taxes, and rental income tax.
1. Does Lombok Have Property Tax?
Yes, but it’s low compared to other countries
Indonesia has a land and building tax (PBB), but the annual property tax rate in Lombok is low compared to countries like the U.S., Australia, or Europe.
2. What Taxes Do You Need to Pay When Buying Property in Lombok?
1. Land and Building Tax (PBB – Pajak Bumi dan Bangunan)
✔ Annual tax on land and buildings in Lombok.
✔ Tax rate: 0.5% of the assessed land and building value.
✔ Who pays? The property owner (including foreigners under leasehold).
Example: If your villa has a taxable value of $200,000, your annual property tax would be:
$200,000 x 0.5% = $1,000 per year
2. Property Transfer Tax (BPHTB – Bea Perolehan Hak atas Tanah dan Bangunan)
✔ A tax paid when buying property.
✔ Tax rate: 5% of the property’s taxable value.
✔ Who pays? The buyer.
Example: If you buy a property for $250,000, you must pay $12,500 (5%) as BPHTB.
3. Income Tax on Property Sales (PPh – Pajak Penghasilan Final)
✔ Applies when selling property.
✔ Tax rate: 2.5% of the sale price.
✔ Who pays? The seller.
Example: If you sell your villa for $300,000, you must pay $7,500 (2.5%) as PPh tax.
3. Do You Pay Tax on Rental Income in Lombok?
Yes! If you rent out your property in Lombok, you must pay rental income tax.
Rental Income Tax
✔ Tax rate: 10% for individuals and 20% for foreign-owned companies (PT PMA).
✔ Who pays? The owner (or PT PMA if structured as a business).
Example: If you earn $30,000 per year from Airbnb rentals, your tax would be:
- $3,000 (10%) for an individual under leasehold.
- $6,000 (20%) if renting under a PT PMA.
4. Tax Benefits of Investing in Lombok
✔ Low annual property tax compared to Western countries.
✔ No inheritance tax in Indonesia.
✔ Lower rental income tax than many global investment destinations.
Tip: Many investors opt for a PT PMA structure to manage tax obligations more efficiently, especially for rental properties.
1. How much is annual property tax in Lombok?
2. Do foreigners pay additional property taxes in Lombok?
3. Do I have to pay taxes if I don’t rent my property?
4. How is the taxable value of property determined?
5. Can I reduce my property tax in Lombok?
Final Thoughts: Is Property Tax in Lombok High?
NO! Lombok’s property tax rates are much lower than in Bali or Western countries, making it a top investment choice.
Key taxes to consider: Annual property tax (0.5%), purchase tax (5%), and rental income tax (10-20%).
Best strategy: Plan your investment structure (leasehold or PT PMA) to optimize tax efficiency.
Looking to invest in Lombok? Now is the perfect time before prices and taxes increase!
About Nour Estates
We started Nour Estates with a simple idea: to make finding your dream land in Lombok as easy and enjoyable as a day at the beach. Our team is a mix of local folks and people from around the world who fell in love with Lombok like you. We’ve been in your shoes, faced the challenges of buying land here, and learned all the ins and outs. Now, we’re here to share that knowledge with you.
We are here to find you the perfect land to invest in. Contact us today, and let’s start this exciting journey together!
Email: hello@nourestates.com
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