Indonesia Land and Building Tax for Foreign Owners: PBB-P2 Guide

Indonesia land and building tax for foreign owners is PBB-P2, the regional tax on covered rural and urban land and buildings. Law No. 1 of 2022 provides the national rules.

Foreign nationality does not create a separate national PBB-P2 rate. The amount depends on the property, NJOP, the taxable-NJOP percentage, the local tariff, and who qualifies as the taxpayer.

How Does PBB-P2 Apply to Foreign-Owned Property in Indonesia?

PBB-P2 applies when a person or entity has the relationship to a covered property described in Articles 38 and 39 of Law No. 1 of 2022.

For land, Article 39 looks at rights or benefits. For buildings, it looks at ownership, control, or benefit. The law does not add a separate taxpayer test based on nationality.

Land law answers a different question: which land right a foreign individual or Indonesian legal entity may hold. See our guide to foreign property ownership in Indonesia for that issue.

Government Regulation No. 35 of 2023 also separates tax administration from title. An SPPT provides the basis for paying PBB-P2, but it is not proof of property ownership.

Which Rules Govern PBB-P2 and Foreign Property Rights in 2026?

PBB-P2 must be read together with land-right and local tax rules. As of 10 September 2026, the main national instruments include:

• Law No. 1 of 2022. Articles 38 to 43 set the core PBB-P2 rules, including taxpayers, NJOP, tariffs, and the tax year.
• Government Regulation No. 35 of 2023. It covers regional procedures, taxable-NJOP details, payment, collection, corrections, objections, and sanctions.
• Minister of Finance Regulation No. 85 of 2024. It provides the current PBB-P2 valuation rules and replaced PMK No. 208/PMK.07/2018.
• Law No. 5 of 1960 and Government Regulation No. 18 of 2021. They govern land rights available to foreigners and Indonesian legal entities.
• Minister of Agrarian Affairs and Spatial Planning Regulation No. 18 of 2021. It provides implementing procedures for land rights.

These instruments do different jobs. Perda sets the tariff, Perkada sets the detailed taxable-NJOP percentage, and the Head of Region sets NJOP.

Who Pays PBB-P2 When Foreign Ownership Is Involved?

The PBB-P2 taxpayer is the person or entity that meets Article 39 of Law No. 1 of 2022. The SPPT taxpayer record should match the underlying facts.

A lease can allocate the economic cost of PBB between the parties. That private allocation does not by itself determine statutory taxpayer status.

How Is PBB-P2 Calculated in Indonesia?

Articles 40 to 42 of Law No. 1 of 2022 calculate PBB-P2 from NJOP, NJOPTKP, the taxable-NJOP percentage, and the local tariff.

1. NJOP. This is the tax value used as the base. PMK No. 85 of 2024 provides the valuation methodology.
2. NJOPTKP. Article 40 sets a national minimum of IDR 10 million per taxpayer. Local rules can set more.
3. Taxable-NJOP percentage. The range is 20% to 100% after NJOPTKP. PP No. 35 of 2023 places the detail in Perkada.
4. PBB-P2 tariff. Article 41 sets a 0.5% maximum. The relevant Perda sets the actual local tariff.

If one taxpayer has several PBB-P2 objects in the same regency or city, Article 40 allows NJOPTKP for only one object during that tax year.

Formula: PBB-P2 = local tariff x [taxable-NJOP percentage x (NJOP minus NJOPTKP)].

Suppose NJOP is IDR 5 billion, NJOPTKP is IDR 10 million, the taxable percentage is 40%, and the tariff is 0.20%. PBB-P2 would be IDR 3,992,000.

This is only a calculation example. It does not represent the tariff, taxable percentage, or NJOPTKP of a specific region.

Article 43 uses the property’s condition on January 1 for that tax year. Changes after January 1 should be checked against the local authority’s update procedure.

Why Can PBB-P2 Bills Differ Between Indonesian Regions?

PBB-P2 bills vary because several inputs are local. Similar market values do not guarantee the same NJOP, taxable percentage, tariff, or final assessment.

Law No. 1 of 2022 and PP No. 35 of 2023 use a three-year NJOP cycle as the standard, with annual determinations allowed for certain objects.

PMK No. 85 of 2024 provides the valuation methodology. Check any local figure against the current Perda, Perkada, NJOP determination, and SPPT.

Does a PT PMA Pay a Different PBB-P2 Rate?

A PT PMA does not receive a separate foreign-company PBB-P2 tariff under Law No. 1 of 2022. The applicable local tariff follows the property and regional rules.

Government Regulation No. 18 of 2021 allows HGB for Indonesian legal entities. A PT PMA can qualify, subject to the applicable land and investment rules.

See PT PMA land and property rights in Indonesia for the land-right issue and PT PMA capital rules for property investment for the investment layer.

Other taxes and reporting duties have separate triggers. Our PT PMA tax obligations guide covers the broader company-tax scope.

What Should Foreign Buyers Check Before Relying on a PBB Record?

Foreign buyers should reconcile PBB-P2 records with the property documents before closing to catch unpaid tax, data mismatches, or incorrect local assumptions.

• Object data. Match the object number, address, areas, and classification. Local systems may use NOP, while PP No. 35 of 2023 uses NOPD more broadly.
• Latest SPPT. Read the current assessment instead of relying on a seller’s rounded estimate of annual property tax.
• Payment history. Ask for payment evidence and compare it with available local records.
• Title documents. Compare SPPT data with the certificate and deed. SPPT itself does not prove ownership.
• Local rules. Check the current Perda, Perkada, payment procedure, correction process, and any applicable local relief.

For a wider transaction review, use our due diligence checklist before investing in Indonesia alongside these PBB-P2 checks.

What Happens If PBB-P2 Is Paid Late or the SPPT Data Is Wrong?

Late PBB-P2 can trigger administrative interest. Incorrect SPPT data requires the local correction process.

Article 59 of Government Regulation No. 35 of 2023 allows a payment period of up to six months from the date the SPPT is sent.

Under Article 59(7), ordinary late payment can attract 1% interest per month for up to 24 months. A fraction of a month counts as one full month.

Other cases can carry different sanctions. For incorrect SPPT data, use the local correction or objection procedure and check whether payment remains due.

What Is the Difference Between PBB-P2 and BPHTB?

PBB-P2 is a recurring regional property tax. BPHTB applies when a person or entity acquires a qualifying right over land or a building.

Keep BPHTB separate from annual PBB-P2 when budgeting a purchase. They arise from different tax events.

Does Every Indonesian Property Fall Under PBB-P2?

No. Article 38 of Law No. 1 of 2022 excludes specified property from PBB-P2, while some sectoral objects fall within the central PBB regime.

Exclusions include certain government property, qualifying public-interest property, cemeteries, protected land, and qualifying diplomatic property. Diplomatic exemptions require reciprocity.

PMK No. 58 of 2024 addresses qualifying international bodies or representatives. Plantation, forestry, and mining business areas also sit outside PBB-P2.

The Directorate General of Taxes administers PBB-P5L for defined sectoral objects. Classification follows the property object, not the company’s industry alone.

If your foreign-owned structure is the PBB-P2 taxpayer for a covered property, keep the assessment, payment history, and recurring compliance record aligned.

Our Indonesia tax compliance support can review those obligations alongside the company’s wider tax position.