Land and building tax (Pajak Bumi dan Bangunan/PBB) is a tax on property chargeable on all land and/or buildings, unless exempted. The negative list setting out land and buildings not subject to PBB includes those:
• Used by central and regional Government for governance purposes;
• Used for public interest in the areas of religious and social affairs, health, education and national culture, and non-profit making purposes;
• Used as a cemetery, ancient heritage site or similar;
• Constituting protected forests, natural reserve forests, tourism forests, national parks, grazing land controlled by a village, and state land with no right imposed on it;
• Used by a diplomatic representative, based on the reciprocal treatment principle;
• Used by an agency or representative of an international organisation, as determined by the MoF.
PBB is a part of regional taxes which are governed under Regional Taxes and Retribution (Pajak Daerah dan Retribusi Daerah/PDRD) Law in which each regional government has to issue a regulation (Peraturan Daerah/PERDA) to regulate PBB in its territory.
The scope of PBB under PDRD Law covers all land and building except for the following industries which are governed by separate regulations:
• mineral and coal mining;
• oil, gas and geothermal mining;
• other industries located in national waters outside the territory of regional area.
PBB is payable annually following a Tax Due Notification Letter (Surat Pemberitahuan Pajak Terhutang/SPPT) issued by the Regional Government.
An individual or an organisation that owns a right to a piece land, and/or takes benefits there from, and/or owns, controls, and/or takes benefits from a building can by law be regarded as the PBB taxpayer for that piece of land and/or building.
Under PDRD Law, the PBB rate is maximum 0.3% and
the tax due is calculated by applying the tax rate on the sale value of the tax object (Nilai Jual Objek Pajak/NJOP) deducted by non-taxable NJOP. The non-taxable NJOP is set at Rp 10 million at the minimum. Any changes are to be made by issuing a PERDA.