AJB for Land and Buildings: Requirements, Process and Taxes

The requirements for an AJB for land and buildings can be summed up in three points: the seller is entitled to sell (including the spouse's consent if the land is joint marital property), the property is clear and its data match the Land Office records, and the seller's and buyer's taxes have been paid before the deed is signed before a PPAT (land deed official). Once the AJB is signed, the PPAT registers it at the Land Office so that the certificate is transferred into the buyer's name.

What an AJB is and why it is made before a PPAT

An AJB (akta jual beli, deed of sale and purchase) is a PPAT deed that evidences the sale of rights to land or of ownership of an apartment unit. Article 37(1) PP 24/1997 on Land Registration provides that a transfer of rights by sale can only be registered if it is evidenced by a PPAT deed. A receipt or a private agreement is not enough to transfer the certificate into the buyer's name. The difference between these forms of deed is explained in the article on authentic deeds and private documents.

A PPAT is only authorised to make deeds for land located within their working area (Article 4 PP 37/1998).

AJB requirements to be met before signing

• The seller is the rights holder named on the certificate. If the rights holder has died, the transfer by inheritance is registered first or at the same time (see certificate of inheritance), and all the heirs act together as sellers.
• Consent of the husband or wife if the land is joint marital property (Article 36 UU 1/1974), unless there is a marriage agreement separating property.
• The buyer is eligible to hold the right. Hak milik (freehold), for example, can only be held by Indonesian citizens and legal entities designated by the government (Article 21 UUPA, the Basic Agrarian Law).
• The certificate data match the Land Office's electronic data, and the property is not in dispute. The PPAT must confirm this before making the deed (Article 97 Permen ATR/BPN 3/1997 as amended by Permen ATR/BPN 16/2021).
• No block or attachment. If the land is still mortgaged to a bank, the mortgage right is generally released (roya) first, or the bank gives written consent (Article 104A Permen ATR/BPN 16/2021). See APHT and SKMHT.
• PBB (land and building tax) has been paid in full, and PPh (income tax) and BPHTB (land and building acquisition duty) have been paid and validated.
• The parties attend in person or are represented by a valid attorney. The PPAT must refuse to make a deed based on an irrevocable power of attorney (kuasa mutlak) that in substance amounts to a transfer of rights (Article 39 PP 24/1997).

Documents to prepare

Seller

• KTP (identity card) and family card; for resident individuals, the NIK (national identity number) serves as the NPWP (tax identification number)
• Marriage certificate, divorce certificate or the spouse's death certificate, as applicable; marriage agreement if any
• The original certificate, or an official copy/access to the electronic certificate
• SPPT PBB (annual land and building tax assessment) and proof of payment
• PBG or IMB (building approval or building permit), if any
• Proof of PPh payment, already verified by the Tax Office (KPP)
• For legal entities: the articles of association and the required approval of the company's organs

Buyer

• KTP and family card
• Marriage certificate, so that marital status is recorded correctly
• Proof of BPHTB payment, validated by the regional government

Taxes on a sale: the seller's PPh and the buyer's BPHTB

Seller's PPh. The rate is 2.5% of the gross transfer value (Article 2 PP 34/2016). For a sale between unrelated parties, the value is the amount actually received. If the parties are related, the value that should have been received is used. The seller pays the PPh before the deed is signed, and the PPAT may only sign the deed after receiving proof of payment verified by the KPP (Article 3(5) PP 34/2016). A 1% rate applies to simple houses sold by property developers. Exemptions, for example for an individual with income below the PTKP (non-taxable income threshold) selling for less than Rp60 million, are given through a certificate of exemption (Article 200 PMK 81/2024).

Buyer's BPHTB. The formula is:

BPHTB = rate × (NPOP − NPOPTKP)

NPOP is the transaction price (the taxable acquisition value); in practice, if it is lower than the NJOP PBB (the tax-assessed value), the NJOP is used. NPOPTKP is the non-taxable acquisition value. UU 1/2022 (UU HKPD, the Law on Central and Regional Government Financial Relations) sets a maximum rate of 5% and an NPOPTKP of at least Rp80 million for a taxpayer's first acquisition in the region. The exact figures are set by regional regulation. For property in Jakarta, Perda DKI Jakarta 1/2024 sets a rate of 5% and an NPOPTKP of Rp250 million. The provincial government also grants reductions for certain criteria, for example a first home.

Example (property in Jakarta, price Rp2 billion, unrelated parties, the buyer's first acquisition in Jakarta, no reduction):

• Seller's PPh: 2.5% × Rp2,000,000,000 = Rp50,000,000
• Buyer's BPHTB: 5% × (Rp2,000,000,000 − Rp250,000,000) = Rp87,500,000

Under Article 49 UU HKPD, BPHTB on a sale becomes due when the PPJB (conditional sale and purchase agreement) is signed; a judicial review of this provision was rejected by the Constitutional Court in Decision 117/PUU-XXI/2023. If there is no PPJB, BPHTB becomes due at the AJB. In addition to taxes, there is a PNBP (non-tax state revenue) registration fee at the Land Office.

The AJB process from the check to the transfer of name

1. The seller and buyer agree on the price and terms. If the AJB cannot yet be made, the parties can make a PPJB first.
2. The documents are handed to the PPAT, who checks the certificate through the electronic land information service.
3. The taxes are calculated. The seller pays the PPh and submits the proof of payment to the KPP for verification; the buyer pays the BPHTB and has it validated by the regional government.
4. The parties, including the spouse giving consent, appear before the PPAT with two witnesses (Article 38 PP 24/1997). The PPAT reads out and explains the contents of the deed, and the deed is then signed.
5. No later than seven working days after signing, the PPAT submits the deed and its documents to the Land Office electronically and informs the parties (Article 40 PP 24/1997; Article 25 Permen ATR/BPN 3/2023).
6. After a notification, the buyer or their attorney submits the registration application and pays the service fee (Article 28 Permen ATR/BPN 3/2023).
7. The Land Office records the transfer and issues the certificate in the buyer's name, now as an electronic certificate.

Frequently asked questions