Judonems

New Member
Oct 26, 2012
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Hi This is my first post on the forum after using it in the past to research the possibility of building a villa in South Bali .

Well I have made the plunge now and am building two villas on land I have leased for 25 years. I have recently retired and my wife and I come to Bali about 4 times a year so the “build the villa’’ option seems to be what many of us do when we fall for the Balinese and their relaxed lifestyle.
One thing I have not been able to find a definitive answer to on the forum is regarding license and tax issues for VOA holders in our Villa situation.
If someone could help with these queries I would be very grateful

-We plan to either sell one Villa or lease it on a yearly basis depending on the market when the project is finished. We will use the other for ours and family/friends use (amazing how many ‘‘friends’’ you have when word gets around that you are building a Villa in Bali)
-If we sell one Villa lease what taxes are we liable for. I believe there is a building tax to be paid on completion of the Villas. Is there another ‘sales tax’ over and above that on the actual sale to a new leasor.? Or is there a capital gains type tax involved?
-If we lease the Villa out on a yearly basis what type of license do we need?

Also if there aren’t obvious answers to these questions can someone recommend an English speaking accountant or similar who could point me in the right direction

Your input will be gratefully appreciated
Cheers
 

Georgie

Member
Mar 10, 2011
163
2
16
Bukit
I am no expert but, there is a lot of information on this forum but to break it down so you can do some searches on each category.

1. you need an IMB on both villas (Izin Mendirikan Bangunan)- building permit, which you will need to sell the lease

2.if you plan to rent one out you need a Pondok Wisata, I read on here that they are not being issued anymore so do a search though the archives on that to see if I am correct.

3. I think what you are referring to as "building tax" on completion is that the property will be re-valued and the property tax will be higher as right now it taxed on land value only, property taxes are paid yearly.

4. There is buyers tax and sales tax of 5% each party

5. No Capital gains in your situation

Hope this helps
 

gilbert de jong

Active Member
Jan 20, 2009
3,198
3
36
Panji, Singaraja.
some adds to Georgie's post :
1, IMB you also need to get the pondok wisata, and name on IMB should be the same for the pondok wisata license (landowner)
2, pondok wisata is not issued to a foreigner, hence the landowner who's applying for it.

the thing that might get things complicated is getting an commercial IMB (renting out villa's is commercial) for land that is zoned as farmland or residential..
 

Judonems

New Member
Oct 26, 2012
6
0
1
Thanks Gilbert and Georgie
Great help.
Now this is where I still find things confusing.

The land owner has agreed to help with the IMB on the buildings which are zoned residential
In addition he now needs to get the pondok wisata for me as well?. Just seems strange to an Aussie that the land owners name will be on the license to rent out the Villa but he will not have anything to do with that operation or do I have this wrong?.
So as far as the taxman is concerned -the Villa is licensed as a rental proposition and I am the guy resposible for the payment of the necessary taxes even tho Im not mentioned on the
license and there is no comeback on the land owner for those taxes etc Do I have that bit correct?

Fortunately the land owner seems a very nice guy and wants to help in any way he can so that should help things
 

Georgie

Member
Mar 10, 2011
163
2
16
Bukit
Thanks Gilbert and Georgie
Great help.
Now this is where I still find things confusing.

The land owner has agreed to help with the IMB on the buildings which are zoned residential
In addition he now needs to get the pondok wisata for me as well?. Just seems strange to an Aussie that the land owners name will be on the license to rent out the Villa but he will not have anything to do with that operation or do I have this wrong?.
So as far as the taxman is concerned -the Villa is licensed as a rental proposition and I am the guy resposible for the payment of the necessary taxes even tho Im not mentioned on the
license and there is no comeback on the land owner for those taxes etc Do I have that bit correct?

Fortunately the land owner seems a very nice guy and wants to help in any way he can so that should help things

You can't pay tax unless you are registered for tax (well, of course you can pay it). In order to be registered for income tax here I presume you would need a KITAS, someone can correct me if I am wrong, I don't see how you can register for tax if you are on a VOA. The landowner may not be registered for tax (many here don't) so he may not want to get involved with that side of things. He also may not know you need a license to rent it out. Basically you are not allowed to rent it out, but he is, he already did, to you.

You should get your IMB before you start building, its a building permit to build. On that you must list put it under the classification of Pondok Wisata.
 

Fred2

Well-Known Member
Oct 13, 2010
1,182
83
48
Surabaya/Australia
Thanks Gilbert and Georgie
Great help.
Now this is where I still find things confusing.

The land owner has agreed to help with the IMB on the buildings which are zoned residential
In addition he now needs to get the pondok wisata for me as well?. Just seems strange to an Aussie that the land owners name will be on the license to rent out the Villa but he will not have anything to do with that operation or do I have this wrong?.
So as far as the taxman is concerned -the Villa is licensed as a rental proposition and I am the guy resposible for the payment of the necessary taxes even tho Im not mentioned on the
license and there is no comeback on the land owner for those taxes etc Do I have that bit correct?

Fortunately the land owner seems a very nice guy and wants to help in any way he can so that should help things

You need to really try & understand a few things, The biggest problem you need to get over is this is Indonesia not Australia. So everything you have learnt you need to throw out the window. You need to start a PMA company & start again.
You signed a lease, have you seen your name on the document registered with the government lands department???
 

SHoggard

Member
Nov 28, 2011
738
3
16
Singapore
Someone correct me if I'm wrong, but I was under the impression (ie: I read it here somewhere) that in order to lease land/property a foreigner had to have residency of some sort - KITAS etc

DO double check Fred's advice: have you seen your name on the document registered with the government lands department???
 

Judonems

New Member
Oct 26, 2012
6
0
1
Thanks for the advise regarding the lands dept. Will check shortly when I return

The information I was given was that kitas was needed for the IMB but this problem can be solved by having the land owner involved in the IMB application
Unless I have been very wrongly advised we dont need kitas for the leasing of the land
 

SHoggard

Member
Nov 28, 2011
738
3
16
Singapore
Thanks for the advise regarding the lands dept. Will check shortly when I return

The information I was given was that kitas was needed for the IMB but this problem can be solved by having the land owner involved in the IMB application
Unless I have been very wrongly advised we dont need kitas for the leasing of the land

Double check - there are lots of resources on the net + maybe someone here will point you @ chapter & verse - it would be unusual if there was no residency required, I believe there are similar regulations in Oz - being a Brit & non resident in Oz I'm not sure that I'd be able to lease property, build and rent it our without having some legal status in the country, same goes for little things, like bank a/c or even phone lines/sim cards (some locally recognised ID is usually required)

I looked at a 25 yr leasehold house & land last year near Ganyar but let it slide because of the residency which I wasn't quite ready to get into (also I quite like it, but didn't 'love' it). Currently looking at a PMA which makes more sense given my personal/business curcumstances.

DO double check (& post here your findings)
 
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Judonems

New Member
Oct 26, 2012
6
0
1
OK

Seems like I will have to do more homework and will get back with the results

Thanks again for your help
 

sakumabali

Well-Known Member
Apr 2, 2010
1,056
185
63
Re IMB / pondok wisata: you can get ONE as a foreigner (just for one house/ villa / property), indos as much as they like...and they don't have to be in the same name too, the land can be in the name of a dutch, the pondok wisata in the name of his pembantu for example. Tricky it gets if you already have applied for one IMB , sold the house afterwards and want to repeat: the old house IMB STAYS in your name so you can only apply for a new 1 if you change the name in the old IMB :-(
I also know of at least one case where a swiss guy got an IMB / Pondok Wisata in his name on a VOA
 

Judonems

New Member
Oct 26, 2012
6
0
1
Thanks Sakumabali

Good to hear some positive news
Love your Yesterday is history.... bit How do we add that to our posts?

Fred2 hit the nail on the head when he said I need to forget everything I have learnt about doing biz in Australia. Maybe a new chip for my old hard drive?
I know Australians who lease properties here and only have VOA so it gets a bit confusing.....
 

sakumabali

Well-Known Member
Apr 2, 2010
1,056
185
63
This is a jungle here....you can go to setting / my profile and can add your bottom line :)
 
Thanks Gilbert and Georgie
Great help.
Now this is where I still find things confusing.

The land owner has agreed to help with the IMB on the buildings which are zoned residential
In addition he now needs to get the pondok wisata for me as well?. Just seems strange to an Aussie that the land owners name will be on the license to rent out the Villa but he will not have anything to do with that operation or do I have this wrong?.
So as far as the taxman is concerned -the Villa is licensed as a rental proposition and I am the guy resposible for the payment of the necessary taxes even tho Im not mentioned on the
license and there is no comeback on the land owner for those taxes etc Do I have that bit correct?

Fortunately the land owner seems a very nice guy and wants to help in any way he can so that should help things

-

As foreigner on Bali WITHOUT kitas, one can NOT WORK and having a rental villa is considered as business.

Me too have build property on leasehold land and first was accepted Hotel Melati which can be on a foreigners name but while in Europe I was advised no more such a license anymore in my area so needed 2 pondok wisata and that yes only on Indonesian name.

If you build with a "serious" contractor than you get invoices with tax included so than no need building tax later. If not than yes you will have to proof how much you have paid for all (some companies make such a "fake" invoices/calculations) and than on the difference spending/sales you should pay income taxes

The rental tax is 10% and yes as you are "temporary" owner of property and you cash the rent sure you need pay. The pondok wisata on name Indonesian is just an administrative procedure. Similar when nominee and freehold, you not expect the nominee too pay the taxes, do you?

Please be ready to wait some time for IMB / Pondok Wisata, mine took 1,5 years as I did not wanted to pay 30% extra for "faster" delivery !!! And even you know very well a local, best try be sure all will be done correctly and in time .... blackmailing is sadly a used practice to get more money ......

enjoy & success
 

gilbert de jong

Active Member
Jan 20, 2009
3,198
3
36
Panji, Singaraja.
"business" is not the same as "work" ..
Having money - let people build a villa - then rent out that villa.. all the while sitting on my ass, at what stage do I work? Know what I mean...