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Insights · 6 min read

Inheritance Tax in Indonesia: What Is Exempt and What You Still Pay

An inheritance is not subject to income tax, but transferring land title still requires an SKB and BPHTB. A short guide to inheritance tax and how to report it in your tax return.

Three months after her father passed away, Ibu Ratna (a pseudonym) went to a notary's office to transfer the title of the family home on the edge of the city. She brought one question that had worried her from the start: "How much inheritance tax do we have to pay?" A relative had told her he was "hit with tens of millions in tax" when he dealt with land left by his parents. Ibu Ratna did not know whether that was true, or where to begin.

This kind of confusion is very common. People use the phrase "inheritance tax" in everyday conversation, but what actually applies is a combination of several different rules: income tax (PPh), administered by the central government; land and building acquisition duty (BPHTB), collected by regional governments; and administrative obligations when filing the annual tax return (SPT). This article explains all three in turn. (The illustration above is fictional and anonymised.)

An inheritance is not subject to income tax

The starting point is simple. The Income Tax Law, as last amended by the Law on the Harmonisation of Tax Regulations (UU HPP, Law Number 7 of 2021), states that an inheritance is not a taxable object. The provision is in Article 4(3)(b) of the Income Tax Law (UU PPh).

This means that when you receive property left by a parent, spouse or other relative as an heir, what you receive is not treated as income subject to PPh. The Directorate General of Taxes (DJP) itself confirmed this publicly when the "inheritance tax" issue was widely discussed in 2025.

However, "not a taxable object" is not the same as "no tax matters at all". There are two things you still need to watch: the PPh exemption procedure when land and buildings are transferred, and BPHTB, which is still payable.

Land and buildings: why you still need an SKB

In general, every transfer of rights to land and/or buildings is subject to final PPh. So when a certificate is transferred from the deceased to the heir, the land and tax administration systems still require proof that the transfer is in fact exempt.

This exemption is currently governed by Minister of Finance Regulation Number 81 of 2024 (PMK 81/2024). Article 200(1)(d) exempts transfers of land and/or buildings by inheritance from the obligation to pay or collect PPh. Article 200(2) states that the exemption is granted by issuing a Certificate of Exemption (Surat Keterangan Bebas, SKB) from PPh.

In practice, the usual steps are:

  • The heir applies for the SKB to the Tax Service Office (KPP) where they are registered, in writing or online through DJP's Coretax system.
  • The application is supported by documents, including a Statement of Inheritance Division (Surat Pernyataan Pembagian Waris) as set out in Director General of Taxes Regulation Number PER-8/PJ/2025.
  • According to DJP, a complete application is processed within three working days.

The SKB is then submitted in the title transfer process at the Land Office. Without an SKB, the land deed official (PPAT) or the land office may ask for proof of payment of final PPh as though it were an ordinary transfer. This is where many families feel they have been "hit with inheritance tax", when in fact an exemption facility simply has not been applied for.

BPHTB: a regional tax that is still payable

Unlike PPh, BPHTB does apply to the acquisition of rights by inheritance. Its legal basis is now Law Number 1 of 2022 on Financial Relations between the Central Government and Regional Governments (UU HKPD).

Some of the key relevant provisions:

  • Rate. The BPHTB rate is at most 5%, and the exact rate is set by each region through a regional regulation (perda).
  • A specific non-taxable threshold for inheritance. Article 46(6) of UU HKPD provides that for acquisition by inheritance or testamentary gift by an individual who is a blood relative in a direct line one degree up or down, including a husband or wife, the Non-Taxable Acquisition Value of the Tax Object (NPOPTKP) is set at no less than Rp300 million.
  • Regions may set it higher. For example, DDTCNews reported that DKI Jakarta, through Regional Regulation (Perda) Number 1 of 2024, set the inheritance NPOPTKP for these family relationships at Rp1 billion.
  • When it becomes payable. For inheritance, BPHTB becomes payable when the heir or their proxy registers the transfer of rights at the land office.

Put simply, BPHTB is calculated from the acquisition value of the tax object minus the NPOPTKP, then multiplied by the regional rate. Because the NPOPTKP and the rate differ between regions, the final figure depends heavily on where the property is. Some regions also offer reductions or exemptions in certain circumstances. Always check the local perda and the policies of the local regional revenue agency (Bapenda) before calculating.

Transferring other assets

Not every inherited asset is land. For other assets, the PPh principle is the same: receiving an inheritance is not a taxable object. What differs is the administrative procedure.

  • Bank accounts and time deposits are usually paid out or transferred on the basis of death documents and proof of heirship, in line with each bank's own rules.
  • Motor vehicles are transferred through Samsat, with a transfer fee set by the region.
  • Shares and securities are transferred through the company or a securities broker, on the basis of inheritance documents.

The key document almost always requested is proof of heirship. It may take the form of a certificate of inheritance (surat keterangan ahli waris), a notarial deed of inheritance rights (akta keterangan hak mewaris), a court determination, or another document in line with land regulations and the policies of the institution concerned. Preparing this document properly from the start is often what separates a smooth process from a drawn-out one.

Reporting in the annual tax return

Although it is exempt from PPh, inherited property still needs to be reported correctly. In general:

  • An heir with a tax identification number (NPWP) lists the property received in the list of assets in their annual tax return (SPT Tahunan), and records the receipt as income that is not a taxable object.
  • While the estate has not yet been divided, the Income Tax Law treats an undivided inheritance as a single taxable subject in place of those entitled to it. If the property earns income, such as rent or interest, its tax obligations need to be dealt with.
  • Once the division is complete, the heirs need to follow up on the status of the deceased's NPWP in line with DJP procedures.

Consistent reporting matters because an increase in assets that is not explained in the SPT can raise questions later. Recording the origin of the property as an inheritance, with its documents, protects the heirs themselves.

Why it pays to plan early

Most inheritance tax problems are not really about the amount of tax, but about having the documents ready and understanding the process. Families that have mapped their assets, kept proof of ownership and know who their heirs are will find it much easier to obtain the SKB, calculate BPHTB and file the SPT. On the other hand, assets that are poorly recorded or jointly owned without clarity often hold up the whole process.

Key points

  • An inheritance is not subject to PPh under Article 4(3)(b) of the Income Tax Law.
  • For land and buildings, the PPh exemption is applied for through an SKB under Article 200 of PMK 81/2024, with the Statement of Inheritance Division as one of the attachments.
  • BPHTB is still payable on acquisition by inheritance; the inheritance NPOPTKP for the immediate family is at least Rp300 million and may be higher under a perda.
  • Inherited property is still reported in the heir's annual SPT as income that is not a taxable object.
  • Well-kept documents and proof of heirship decide whether the process goes smoothly.

If you would like to map your family's assets and their tax consequences before it becomes urgent, Parampara's consultation team can help you plan the first steps.

This article is general information and not legal, tax or financial advice. Rules may change and how they apply depends on the facts of each case; consult a licensed professional about your situation.

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