Tax
Selling your Lombok property: taxes on both sides
In short: when you sell a land title in Indonesia, the seller pays a final 2.5% tax on the gross price, not on the gain. If you sell the shares of your PT PMA instead, a non-resident seller pays 5% of the sale price. At home, Australian and UK residents must also pay capital gains tax on the real gain, with a credit for the Indonesian tax. How you hold the property today decides how you will be taxed when you leave, so it is worth planning before you buy.
Most buyers think about tax when they buy and when they rent. Few think about it when they sell, yet the exit is where the structure you chose matters most. This guide covers the Indonesian side for each route, then the home side for Australian and UK residents.
The Indonesian side, route by route
Selling a land title (HGB or Hak Pakai)
When land or a building changes hands, the seller pays a final income tax of 2.5% of the gross transfer value, under Government Regulation 34/2016. The base is the higher of the price in the deed and the government's tax valuation (NJOP). The seller pays it before the notary signs the deed of sale (DDTC).
Because the tax is on the price, not the profit, you pay it even if you sell at a loss. The buyer separately pays acquisition duty (BPHTB) of up to 5%.
This is how a PT PMA sells land it holds on HGB, or how an individual sells a Hak Pakai house. In the PT PMA case, the company then pays corporate tax on any other income, and getting the cash out to shareholders means dividends, with withholding tax, or winding up the company.
Selling the shares of your PT PMA
Often simpler for a licensed, trading villa business: the buyer takes over the company and the title never moves.
A non-resident who sells shares in an unlisted Indonesian company is taxed at 20% of an "estimated net income" set at 25% of the price: an effective 5% of the sale price, final (Directorate General of Taxes). The company whose shares are sold usually withholds it. Some tax treaties limit Indonesia's right to tax gains on shares, so check the treaty with your country of residence.
A share sale needs proper corporate paperwork: a shareholders' resolution, a notarial deed and an update to the company's records with the Ministry of Law. Buyers will also want to see clean tax filings for the company's whole life.
Assigning a lease
A leasehold is sold by assigning the remaining term to a new tenant, which the original lease must allow. The 2.5% transfer tax is designed for rights over land, not lease contracts, and practice for lease assignments varies. Agree with your notary, before you list the property, how the assignment will be taxed and who pays.
| What you sell | Main Indonesian tax on the seller | Base |
|---|---|---|
| HGB or Hak Pakai title | 2.5% final | Gross price or NJOP, whichever is higher |
| PT PMA shares (non-resident seller) | 5% effective, final | Gross sale price |
| Remaining lease term | Confirm with your notary | Depends on how it is structured |
The home side
Australian residents
Australian residents pay capital gains tax on foreign assets. The gain is calculated in Australian dollars, using exchange rates at the time of purchase and of sale, and goes into your assessable income (Bali Villa Realty, May 2026).
- 50% discount. Individuals who are Australian residents and have held the asset for more than 12 months generally pay tax on only half the gain. Foreign residents have lost most of this discount since 2012 (ATO).
- Foreign income tax offset. The Indonesian tax you paid on the sale can be offset against Australian tax on the same gain, up to the Australian tax due.
- Currency matters. Because the gain is measured in Australian dollars, a weaker rupiah can shrink, or erase, a gain that looks healthy in rupiah. The reverse is also true.
UK residents
UK residents pay capital gains tax on overseas property. From 6 April 2026, the rates are 18% on gains within the basic rate band and 24% above it, after an annual exempt amount of £3,000 (GOV.UK).
- Credit relief. Article 13 of the UK–Indonesia tax convention lets Indonesia tax gains on property located there, and Article 21 gives a UK credit for that tax (GOV.UK).
- Sterling calculation. Like Australia, the gain is measured in your home currency, so exchange rates move the result.
- Reporting. The 60-day CGT return applies to UK residential property. Overseas sales are reported on your self-assessment return; check the current rules with your adviser.
A worked example
A UK higher-rate taxpayer bought a Hak Pakai house in Lombok for the equivalent of £200,000 and sells it for £300,000. The figures are illustrative and ignore buying and selling costs, which are normally deductible at home.
| Amount (£) | |
|---|---|
| Sale price | 300,000 |
| Indonesian transfer tax, 2.5% of price | 7,500 |
| Gain for UK CGT | 100,000 |
| Less annual exempt amount | 3,000 |
| UK CGT at 24% | 23,280 |
| Less credit for Indonesian tax | 7,500 |
| UK CGT payable | 15,780 |
| Total tax on the sale, both countries | 23,280 |
As with rental income, the credit prevents double taxation but does not reduce the total below the home-country tax. If the house had sold for less than £200,000, the Indonesian 2.5% would still be due, with no UK tax to offset it against.
Planning the exit before you buy
- Choose the structure with the exit in mind. A rental business you may sell as a going concern often suits a PT PMA. A home you will sell to another resident suits Hak Pakai. Our guide to the three ownership routes compares them.
- Write assignment rights into any lease. Without them, you may have nothing to sell.
- Keep every receipt. Purchase deeds, tax payment slips, invoices for building work and improvements. They support your home-country cost base and your foreign tax credit.
- Keep the company clean. For a PT PMA, up-to-date filings are what make a share sale possible.
- Record exchange rates. Note the rate on the day of each payment: your home tax authority will want them.
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FAQ
Do I pay the 2.5% if I sell at a loss?
Yes. It is charged on the gross price, not the gain.
Is inheritance taxed in Indonesia?
Inheritances are exempt from the 2.5% transfer tax. The heir may still pay acquisition duty, and inheritance rules for foreigners depend on the structure: see our ownership guide.
Can I take the sale proceeds out of Indonesia?
Yes. Indonesia has an open foreign-exchange regime. Your bank will ask for the deed of sale and proof of tax paid.
Are US and Canadian sellers treated differently?
The Indonesian side is the same. At home, both countries tax worldwide gains; see our guide for US and Canadian buyers.
This article is general information, not tax advice. Confirm your position with qualified advisers in Indonesia and at home before any sale. See our investment disclaimer.