03 Feb 2017
LAND REFORM (LEGAL AND TAX IMPLICATIONS)
Minister of Agrarian and Spatial said that 58% lands are only owned by 1% of population in Indonesia. It is based on statistic information i.e GINI Index by World Bank = 0.58%. It means the pricing of land is very depending on only a few owners / parties, who can ‘fry’ the land prices.
In order to avoid this situation, government plans to take some action to manage the incremental of land prices fairly such as :
- Increasing the rate of tax on land and building (PBB) for the owner that have more quantity or surface land area.
- Implementing the land reform: unproductive land will be re-regulated. There will be limitation of ownership per districts (kelurahan).
- Changing the ruling on the final income tax to Capital Gain tax on selling land & building.
- Possibility for government to issue new laws and regulations related with land reform in order to spread the ownership to more parties / peoples such as land bank tax for unutilized assets.
The owners of big land areas and investors need to anticipate the future legal and tax regulations wisely.
Agung Tjahjady SH, CPA, MM, BKP
Registered Tax Consultant, Advocate
0816 825 348
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