Below is a detailed summary of the steps, time and cost involved in registering property in this economy. 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.
Time to Complete
Land certificate examination at the 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, 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 pursuant to Government Regulation No. 13 of 2010 regarding Types and Tarrifs of State Non Tax Income Applicable in National Land Offices dated 22 January 2010, the current cost is Rp. 50,000
Agency: Land Office
Seller pays transfer tax at a bank
The seller must pay the Transfer Tax prior to the execution of the transfer deed. The tax on Transfer of Land and Building (Transfer Tax) in the amount of 5% which is calculated on the sale or transfer value. In case the sale value is lower than the Sales Value of the Tax Object (“NJOP”), then the NJOP price will be used. But the sale value is higher than the NJOP, then the sale value will be used. The Transfer Tax is paid to a Bank Persepsi – bank appointed by the Ministry of Finance to accept tax payments. Tax to the local government is paid at the Local Government Bank (Bank Badan Usaha Milik Daerah) and/or other 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.
Buyer pays Tax on Acquisition on Land and Building
The buyer pays the Tax on Acquisition of Land and Building (BPHTB) in the amount of 5% of the sale value or transfer value. The BPHTB Formula: The buyer pays the BPHTB in the amount of 5% x (Sale value or Transfer value or Nilai Perolehan Obyek Pajak or NPOP – Non-Taxable Sale Value or 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). This tax is paid at a Bank Persepsi, appointed by the State Treasury to accept tax payments, or at a post office where the land is located.
Execution of sale and purchase of Land Deed by a 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 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 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. -Evidence of payment of Tax on Transfer of Land and Building (Transfer Tax) (obtained in Procedure 2) -Evidence of payment of the Tax on Acquisition of Land and Building (BPHTB) (obtained in Procedure 3) -Evidence of deed of Company Establishment which was already authorized by the Ministry of Justice -Company Tax-Registration Numbers (NPWP) of the seller and the purchaser (obtained in Procedure 4) -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 land as required in the Articles of Association of both the seller and purchaser -Advise Planning from the City Administration Institution -Permit for Building Establishment
Agency: Land Deed/PPAT Official
Registration of the Land Deed at the local Land Office under the name of the buyer
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. The Land Office crosses out the name of the previous owner and inserts the name of the buyer, stamps and signs it.
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 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 with regard to the transfer of land title.
Agency: Land and Building Tax Office (PBB)
* Takes place simultaneously with another procedure.
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