What Property Taxes Do You Have To Pay?

This depends on the type of your property acquisition and the kind of title that is involved.

Let’s start with leasehold. The property acquisition tax for leasehold is entirely upon the lessor and amounts to 10% of the value of the lease contract. Make sure your lessor is actually paying those taxes and ask the notary for a copy of the receipt. The property acquisition tax or stamp duty as it is referred to in some countries for freehold (“hak milik”) and right of use (“hak pakai”) is borne by both parties, i.e., the seller has to pay 2.5% and the buyer 5% of the value of the property declared in the notarized sale and purchase deed. These taxes are usually assessed before the transaction takes place by the notary and are to some degree negotiable with the tax authorities in the district.

If you rent a house or villa, the same applies to the leasehold. The lessor is responsible to pay the 10% tax to the government.

Last but not least, there is the annual land and building taxes, which are typically paid by the lessees and of course by all owners of freehold and right of use titles. It’s a relatively small amount. Your notary will be able to tell you what it amounts to per year when you close the transaction.