Land certificate examination at the Land Office
Agency: Land Office
A land certificate examination is carried out by a Land Deed Official. If the land book concerned is available at the Land Office, it usually takes a few hours to 1 day. However, since the majority of land records are still kept in paper format, sometimes the land book is unavailable, misplaced or being used by another division of the Land Office, so then the examination process will be pending, and it usually takes a few days to obtain the information from the Land Office. The land title search would also involve a check at the local city planning office located at the local government office to determine the intended use of the said plot of land, whether for residences, industry or green belt. No written statement is given, but a note made on the certificate saying ‘Has been examined and in accordance with the register at the Land Office’. Even if the land certificate examination could be requested online, the user needs to go directly to the Land Registry for picking up the official valid signed document. If the user prefers to demand the document personally, the fee needs to be paid first at the bank, and the receipt taken to the Land Office for starting the examination.
Time and cost: 3 days, IDR 50,000
Payment of the transfer and acquisition taxes
The seller must pay the Transfer Tax before the execution of the transfer deed. The tax on Transfer of Land and Building (Transfer Tax) in the amount of 2.5% which is calculated on the sale or Sales Value of the Tax Object (“NJOP”). If the sale value is higher than the NJOP, then the sale value will be used. If the sale value is lower than the NJOP, then the NJOP value will be used. The Transfer Tax is paid to a Bank Persepsi – bank appointed by the Ministry of Finance to accept tax payments and it’s collected by the Central Government.
The buyer must pay the Tax on Acquisition of Land and Building (BPHTB) in the amount of 5% of the sale value or Transfer value (“NPOP”). If the Sale value is higher than the NPOP, then the sale value will be used. If the sale value is lower than the NPOP, then the NPOP value will be used. Tax to the local government is paid at the Local Government Bank (Bank Badan Usaha Milik Daerah) and/or another private commercial bank (Article 4.2 of Law No. 7/1983, amended by Law No. 10/1994 and Law 17/2000 concerning Income Tax and Parts 2.1 and 5.1 of the Director-General of Taxation Circular No. SE-04/P.J.33/1996 dated August 26, 1996).
The BPHTB Formula: The buyer pays the BPHTB in the amount of 5% x Sale value or Transfer value (Nilai Perolehan Obyek Pajak or NPOP) minus the Non-Taxable Sale Value (Nilai Perolehan Obyek Pajak Tidak Kena Pajak or NPOPTKP), which is determined regionally (According to Article 7 of Law No. 20/2000 concerning the amendment of Law No. 21/1997 concerning the Tax on Acquisition of Land and Building). In Jakarta, the NPOPTKP is Rp. 80,000,000 (according to Article 5 paragraph 7 of the Regional Decree of Special Province of Jakarta No. 18/2010 concerning the Tax on Acquisition of Land and Building (BPHTB)).
Since January 2017, payment of income tax from the transaction can be conducted online based on the Director General of Taxation Regulation No.PER-26/PJ/2014 on Electronic Tax Payment System. However, the procedure couldn’t be done in less than a day since UPPRD shall instruct officers in their respective units to verify the document sent electronically as soon as they received it through online BPHTB collection system; and validate proof of payment in SSPD BPHTB immediately upon receipt through BPHTB collection system online.
Time and cost: 1 day, IDR 197,638,241.12 (2.5% of the property price (Transfer Tax) + 5% of the property price minus Rp. 80,000,000 which is tax-free (Tax on Acquisition of Land and Building))
Validation of Transfer Tax payment with the Central Tax Office (Kantor Pelayan Pajak)
Agency: Central Tax Office (Kantor Pelayan Pajak- KPP)
The seller applies to perform formal verification on income tax payment at the Central Tax Office (KPP). KPP will issue a formal research certificate that should be presented to the PPAT official as a requirement for the signature of the land deed. As per Article 5 of Director General of Tax Regulation No. Per-18/PJ/2017 the authorized official can sign the deed, decision, agreement, or minutes on the transfer of rights to the land and/or building only after receiving the formal research certificate. Length of verification until the issuance of the letter is 3 business days according to the Director General of Tax Regulation No. Per-26/PJ/2018.
This validation is not required for the Tax on Acquisition of Land and Building (BPHTB) since the Regional tax office collects it directly through online payment (General of Taxation Regulation No.PER-26/PJ/2014 on Electronic Tax Payment System).
Time and cost: 3 days, no charge
Execution of sale and purchase of Land Deed by a PPAT official
Agency: Land Deed/PPAT Official
The execution of the sale and purchase of Land Deed is made before Land Officials (who are often public notaries as well) appointed by the Head of the National Land Office (PPAT) or a local Head of a District (Camat PPAT), after the taxes in Procedures 3 and 4 have been paid. For convenience, those payments are usually made by the notary three days before the execution of the sale-purchase deed. The PPAT obtains an appointment with the Land Office using the online platform (loket.bpn.go.id) to register the land deed.
The documentation shall include:
- Original land certificate
- Evidence of the latest payment of Tax on Land and Building (PBB). Every year, the local PBB Tax Office issues a tax assessment to landowners. By custom, the buyer usually wants to obtain the original of the payment of PBB for the past three years and utility bills for the last three months–though in practice the office will check the previous 10 years. The Land Deed Officer drawing up the sale and purchase deed will only need to see the most recent PBB while the Land Office will need a copy of the most recent PBB for registering the land into the name of the new owner.
- Evidence of payment of Tax on Transfer of Land and Building (Transfer Tax)
- Proof of deed of Company Establishment which was already authorized by the Ministry of Justice
- (v)Company Tax-Registration Numbers (NPWP) of the seller and the purchaser
- Deed of Establishment and its amendments of both the seller and purchaser;
- Corporate approvals of the seller to dispose of the land and the purchaser to acquire the property as required by the Articles of Association of both the seller and purchaser
- Advise Planning from the City Administration Institution
- Permit for Building Establishment
Time and cost: 5 days, IDR 26,885,098.82 (1% of the property value)
Registration of the Land Deed at the local Land Office under the name of the buyer
Agency: Land Office
Registration of the Land Deed at the local Land Office to have the purchaser’s name registered and recorded in the land certificate. At the latest of 7 (seven) days as of the signing date of the sale and purchase of Land Deed, the notary submits such deed including its supporting documents to the Land Office, but in practice, the wait is much longer because of the backlog. (Article 40 sub 1 of Government Regulation No. 24/1997 concerning the Land Registration). In theory, the registration process should be completed within the 5 days statutory time limit, but in practice, it could take up to 15 days. The Land Office crosses out the name of the previous owner and inserts the name of the buyer, stamps and signs it.
Time and cost: 15 days, IDR 2,750,510 (1/1000 of the property value + Rp. 50,000 (administrative fee) + Stamp duty of Rp. 6,000 per document (2 required))
Registration of the Land Deed at the Jakarta Regional Government Revenue Office under the name of a buyer
Agency: Jakarta Regional Government Revenue Office (“Regional Tax Office”)
In connection with the registration of the Land Deed at the Tax on Land and Building Office, the change of ownership must be registered with the Tax Office. The taxpayer should report manually to the Tax Office about the transfer of land title.
Time and cost: 1 day, no charge