Did you know? Inherited land in Indonesia has a special advantage—it is free from Income Tax (PPh)! Based on Law Number 36 of 2008 concerning Income Tax , land received as an inheritance is not subject to income tax, unlike ordinary sales transactions. This certainly opens up opportunities for families who want to pass on assets without having to burden the heirs with additional taxes.
In Article 4 Paragraph (3) of Law No. 36 of 2008 , it is explained that inheritance is not included as a tax object, so that all assets, including land, are received by heirs without having to be subject to income tax. This is clearly good news for heirs, especially if the value of the land is quite high, because the benefits can be received in full without deductions.
However, even though it is free of income tax, the process of transferring ownership of inherited land still requires administrative completeness such as inheritance deeds and land certificates , as well as name changes at the National Land Agency (BPN). Although there are administrative costs, this is not a direct tax on the value of the inherited land.
It is also important to note that this tax exemption only applies as long as the land is not traded. If at any time the heirs decide to sell the inherited land, the transaction will be subject to Final Income Tax on the sale of land of 2.5% of the transaction value. Therefore, it is important to consider the use of land in the long term to optimize profits without tax burden.
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