Registering Property in

Pekanbaru - Indonesia

Below is a detailed summary of the steps, time and cost involved in registering property. It assumes a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute.

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  • Measure of efficiency
    No. Procedure Time to Complete Associated Costs

    Land certificate examination at the local Land Office (BPN)

    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 1 day. However, 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 Regulation of the National Land Agency Number 1 of 2010 stipulates that the requirements to examine the land certificate include the following:
    a. Land Ownership Certificate;
    b. Copy of the applicant’s identification or its proxy;
    c. Letter of request from the Land Deed Official (PPAT) for the transfer of rights by virtue of the Deed of the Land Deed Officer.
    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 according to the Land Registry/ Land Book at the Land Office, dated_______, time ________' and initialed by the officer at the Land Office.

    1 day IDR 55,000

    Seller pays Transfer Tax at a bank

    The seller pays the Tax on Transfer of Land and Building (Transfer Tax) in the amount of 5% which is calculated on the transfer value. Taxes to the central government are paid at a bank appointed by the State Treasury by the state-owned bank (Bank BUMN); those to the local government are paid at the Local Government Bank and/or other private commercial bank (as per 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).

    1 day IDR 67,111,196 (5% of the property value )
    * 3

    Buyer pays Tax on Acquisition on Land and Building at a bank

    The buyer pays the Tax on Acquisition of Land and Building (BPHTB) in the amount of 5% x [(transfer value or sale value or Nilai Perolehan Obyek Pajak (NPOP)) – (non-taxable sale value or Nilai Perolehan Obyek Pajak Tidak Kena Pajak (NPOPTKP))]. According to the law on Local Tax (Law No. 28/2009), the BPHTB belongs to the local government. Article 87 point 4 of the Law sets a minimum value for the NPOPTKP at IDR 60,000,000.

    For Pekanbaru, the local regulation (Perda No. 4/2010) stipulates a NPOPTKP of IDR 60,000,000.

    1 day IDR 64,111,196 (5% of (property value minus IDR 60 million which is tax-free))

    Execution of sale and purchase of Land Deed by a Land Deed Official (PPAT) appointed by the Head of the National Land Office or a local Head of a Sub-District

    The execution of the sale and purchase of the Land Deed is made before Land Officials, namely a Land Deed Official (PPAT) appointed by the Head of the National Land Office after the taxes in procedures 3 and 4 have been paid. For convenience, those payments are usually made three days before the execution of the sale-purchase deed.

    The documentation shall include:
    a. Original land certificate;
    b. Evidence of the latest payment of Tax on Land and Building (PBB). Every year, the local PBB Tax Office issues a tax assessment to land owners. 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 last 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;
    c. Evidence of payment of the Tax on Transfer of Land and Building (Transfer Tax) (obtained in Procedure 2);
    d. Evidence of payment of the Tax on Acquisition of Land and Building (BPHTB) (obtained in Procedure 3);
    e. Evidence of deed of Company Establishment which was already authorized by the Ministry of Law and Human Rights;
    f. Company Tax-Registration Numbers (NPWP) of the seller and the purchaser (obtained in Procedure 4);
    g. Deed of Establishment and its amendments of both the seller and purchaser;
    h. Corporate approvals of the seller to dispose of the land and the purchaser to acquire the land as required in the Articles of Association of both the seller and purchaser;
    i. Advise Planning from the City Administration Institution;
    j. Permit for Building Establishment.

    5 days IDR 13,422,239 (1% of the property value )

    Registration of the Land Deed at the local Land Office (BPN) under the name of the buyer

    After the buyer submits the registration of the Land Deed, she/he leaves it there and has to return some days later to pick up the Land Deed that has been registered under the buyer's name. In between submission of the deed and pick-up, the buyer has to phone the Officer at the Land Office to ask about the progress. The Land Office crosses out the name of the previous owner and inserts the name of the buyer, stamps and signs it.

    20 days IDR 1,404,224 (IDR 50000 + (0.1% of property value) + IDR 6,000 stamp duty per document (2 required))

    Registration of the Land Deed at the Tax on Land and Building Office (PBB) under the name of the buyer

    In connection to the registration of the Land Deed, the change of ownership must be registered with the Land and Building Tax Office (PBB). The taxpayer reports the transfer of land title.

    1 day No cost

    * Takes place simultaneously with previous procedure.