BPHTB 2025: Criteria for Reductions and Exemption

Owning a home in Jakarta often comes with significant tax obligations, including BPHTB on the acquisition of land and buildings. This article explains in simple terms who may qualify for reductions or exemptions and how these incentives work in practice.

Realizing ownership of a house or land in Jakarta remains a major challenge, particularly for communities with limited economic capacity. The challenges faced are not only related to high property prices, but also to tax obligations that must be fulfilled, one of which is the Duty on the Acquisition of Rights over Land and Buildings/BPHTB (“BPHTB”). This article will address the BPHTB relief, reduction, and exemption provided by the government, particularly the DKI Jakarta government, with a focus on further explaining the criteria for granting BPHTB reduction and exemption.

Regulatory Framework on Relief, Reductions, and Exemptions of BPHTB

Article 2 of Regional Regulation Number 1 of 2024 on Regional Taxes and Retributions (“Regional Regulation No. 1/2024”) stipulates that one of the types of taxes collected by the Government is BPHTB. Article 99 of Regional Regulation No. 1/2024 stipulates that the governor or an appointed official may grant relief, reductions, exemptions, and suspension of payment of principal and/or penalties for taxes and/or retributions by taking into account the conditions of taxpayers or retribution payers and/or taxable objects or retribution objects.

Article 99 paragraph (2) of Regional Regulation No. 1/2024 further stipulates that the condition of the taxpayer refers, at a minimum, to the taxpayer’s ability to pay or the taxpayer’s liquidity level. Meanwhile, the conditions of the taxable object that need to be considered are at least in the form of very limited agricultural land, land and buildings occupied by taxpayers from certain groups, the value of the taxable object up to a certain limit, and taxable objects affected by natural disasters, fires, riots, and/or civil unrest.

Further provisions regarding the administration and procedures for relief, reduction, exemption, and suspension of payment of principal taxes, principal retributions, and/or its penalties are regulated by a Governor Regulation. The government then issued Governor of DKI Jakarta Regulation No. 27 of 2025 on the Administration and Procedures for Relief, Reduction, and Exemption of Principal and/or Administrative Penalties for Local Taxes (“Governor Regulation No. 27/2025”) as an implementing regulation of Regional Regulation No. 1/2024.

Principal Tax Relief

Governor Regulation No. 27/2025 stipulates that principal tax relief may be granted by the governor or appointed official, taking into account the circumstances of the taxpayer and/or the tax object, which may be granted:

1. based on position (ex officio); or
2. upon request by the taxpayer.

Ex officio principal tax relief as referred to above, in addition to taking into account the condition of the taxpayer and/or the tax object, may be granted based on the following considerations:

1. exploring the potential for tax receivables collection;
2. accelerating tax revenue targets;
3. providing stimulus to taxpayers to increase taxpayer awareness in terms of orderly payment administration;
4. social and humanitarian interests; and/or
5. other considerations determined by the Governor in order to support national and/or DKI Jakarta Province priority programs.

Article 4 paragraphs (2) and (3) of Governor Regulation No. 27/2025 stipulate that ex officio principal tax relief shall be granted by issuing a Governor Decree on ex officio principal tax relief. For principal tax relief granted upon request by taxpayers, relief is granted based on the taxpayer’s request addressed to the Governor. Principal tax relief upon request by taxpayers is granted by a Governor Decree on principal tax relief upon request by taxpayers.

Reduction and Exemption of the Principal Tax

Article 6 of Governor Regulation No. 25/2027 stipulates that the Governor or an appointed official may grant a reduction or exemption of the principal tax by taking into account the condition of the taxpayer and/or the tax object. The reduction of the principal tax may be granted as a certain percentage or specific value. Whilst, the exemption of the principal tax is granted at 100% (one hundred percent).

Reduction or exemption of the principal tax for types of taxes collected based on the Governor determination may be granted:

1. based on position (ex officio); or
2. upon request by the taxpayer.

Ex officio reduction or exemption of the principal tax is granted automatically through the regional tax management information system and is formalized by issuing a tax assessment letter that specifies:

1. the granted reduction or exemption of the principal tax; and/or
2. the tax payable after the reduction or exemption has been applied.

For reduction or exemption of principal tax upon request by taxpayers, requests for reduction or exemption of the principal tax can only be submitted in the case of tax assessment letters for which reduction or exemption of the principal is requested:

1. no request for instalment facilities or payment suspension has been submitted;
2. an application for instalment facilities or payment suspension has been submitted but has not been considered because it does not meet the formal requirements or has been rejected;
3. no objection has been filed;
4. an objection has been filed but not considered because it does not meet the formal requirements; or
5. an objection has been filed but withdrawn by the taxpayer and the DKI Jakarta Provincial Revenue Agency (Bapenda) has approved the taxpayer’s request for withdrawal.

Governor Regulation No. 27/2025 does not explicitly regulate the detailed criteria for taxpayers eligible for a reduction or exemption of the principal tax nor the amount to be granted. Article 6 paragraph (4) of Governor Regulation No. 27/2025 stipulates that the criteria for granting a reduction or exemption of the principal tax for each type of tax as well as the amount of the reduction, shall be determined in a Governor Decree. To implement the mandate of Article 6 paragraph (4) Governor Regulation No. 27/2025 above, the DKI Jakarta Government then issued Governor Decree No. 840 of 2025 on Criteria for Granting Reductions and Exemptions from the Principal BPHTB (“Governor Decree No. 840/2025”).

Provisions for BPHTB Reduction and Exemption in Governor Decree No. 840/2025

The criteria for granting reductions and exemptions of BPHTB are regulated in Appendix of Governor Decree No. 840/2025. The author will explain the criteria one by one.

Reduction of the Principal Amount of Acquisition Levy

As previously explained, reductions and exemptions of the principal tax (i.e., BPHTB) may be granted either ex officio or upon the taxpayer’s request. Governor Decree No. 840/2025 only regulates the reduction and exemption of principal BPHTB ex officio. Governor Decree No. 840/2025 does not regulate the granting of reductions or exemptions of the principal BPHTB upon the taxpayer’s request.

There are three types of reductions of the principal BPHTB, namely:

1. a reduction of 75% (seventy-five percent) of the BPHTB payable;
2. a reduction of 50% (fifty percent) of the BPHTB payable; and
3. Reduction of BPHTB payable for building (for condominium).

Reduction of the Principal BPHTB by 75% (seventy-five percent)

A reduction of the principal BPHTB by 75% (seventy five percent) is granted ex officio to:

1. Taxpayers who obtain rights of land and/or buildings used for social, educational, or health purposes;
2. Individual taxpayers who are veterans, civil servants (PNS), Indonesian National Armed Forces (TNI) / Indonesian National Police (POLRI), retired civil servants, retired TNI/POLRI personnel, or their widows/widowers, whose names are directly registered as recipients of government housing;
3. Individual taxpayers who acquire new rights through a national government program in the field of land registration with a land area of up to 60 m2 (sixty square meters);
4. Individual taxpayers who hold an Identity Card (KTP) of the Province of DKI Jakarta and have reached the age of 18 (eighteen) or are married, who obtain rights of land and/or buildings for the first time through the granting of new rights in the form of a landed house or vacant land with an taxable (nilai perolehan objek pajak) (“NPOP”) of up to Rp1.000.000.000,00 (one billion rupiah). The first rights of land and/or buildings referred to are the rights of land and/or buildings obtained by taxpayers, including husband/wife, for the first time in the DKI Jakarta, as recorded in the local tax management information system managed by Bapenda.

Reduction of the Principal BPHTB by 50% percent (fifty percent)

A reduction of the principal BPHTB by 50% (fifty percent) is granted ex officio to:

1. individual taxpayers who hold an KTP of the Province of DKI Jakarta and have reached the age of 18 (eighteen) years or are married, who acquire rights over land and/or buildings for the first time through sale and purchase in the form of landed houses or condominium units with an NPOP of up to Rp500.000.000,00 (five hundred million rupiah), similar to what was explained in the previous section, the first rights of land and/or buildings referred to are the rights of land and/or buildings obtained by taxpayers, including husband/wife, for the first time in the DKI Jakarta, as recorded in the local tax management information system managed by Bapenda;
2. Individual taxpayers who are veterans, PNS, TNI/POLRI, retired PNS, retired TNI/POLRI, or their widows/widowers, who acquire rights of land and/or buildings of official housing from veterans, PNS, TNI/POLRI, retired PNS, retired TNI/POLRI, or their widows/widowers through sale and purchase, exchange, grant, testamentary grant, or inheritance;
3. individual taxpayers who acquire rights of land and/or buildings due to a grant from an individual who has a blood relationship in a direct line of descent one degree upward or one degree downward with the grantee. Based on Section A point 3 of the Appendix of Governor Decree No. 840/2025 explained that in the event the grantor or the grantee is more than one person, a reduction of the principal BPHTB can still be granted, provided that at least one of the grantees has a direct blood relationship with the grantor in a straight lineage, either one degree upward or one degree downward, or vice versa;
4. taxpayers who acquire rights of land and/or buildings as compensation for land released by the government for public interest;
5. taxpayers who acquire rights of land and/or buildings due to a testamentary grant;
6. taxpayers who acquire rights over land and/or buildings due to inheritance;
7. taxpayers that are regionally owned enterprises who acquire rights of land and/or buildings as part of regional government capital participation;
8. corporate taxpayers who acquire rights of land and/or buildings due to a business merger;
9. corporate taxpayers who acquire rights of land and/or buildings due to a business consolidation;
10. taxpayers who acquire new rights of land and/or buildings as a continuation of the extension of rights carried out after the expiration of the previous land rights without any change of name;
11. taxpayers who acquire new rights of land and/or buildings originating from former village land or former municipal land;
12. taxpayers who acquire new rights of land and/or buildings over management rights in the name of the Provincial Government of DKI Jakarta;
13. corporate taxpayers who acquire new rights of land and/or buildings in the form of management rights; or
14. corporate taxpayers who acquire new rights of land and/or buildings other than management rights and have physically controlled the land and/or buildings for more than 20 (twenty) years based on physical data and juridical data recorded at the land office.

Reduction of Principal BPHTB payable for building

A reduction in the principal BPHTB granted in the case of a corporate taxpayer who acquires new rights other than management rights in the context of extending rights of joint land of condominium in the name of a rights holder that is different from the previous rights holder.  The portion of BPHTB payable on the building referred to herein is the difference between the BPHTB that should be payable on the land and building and the BPHTB payable on the land alone.

Exemption of the Principal BPHTB

The principal BPHTB is exempted ex officio for taxpayers who acquire rights of land and/or buildings as part of central and/or regional government programs, in the form of policies providing facilitation for the construction and acquisition of housing for low-income communities, who do not meet the criteria for exemptions of BPHTB objects.

The criteria for exemptions of BPHTB objects are stipulated in Governor of DKI Jakarta Decree No. 808 of 2024 (“Governor Decree No. 808/2024”). Governor Decree No. 808/2024 stipulates that low-income communities eligible for the exemption of principal BPHTB are those who own a house or an apartment unit obtained through central and/or regional government programs, in the form of policies providing facilitation for the construction and acquisition of housing for low-income communities, as recommended by the DKI Jakarta Office of Public Housing and Settlement Areas, with the following criteria:

1. for first-time home ownership;
2. for houses with a maximum building area of 36m² (thirty-six square meters); and
3. for houses with a maximum NPOP value of IDR 650,000,000.00 (six hundred fifty million rupiah)

Conclusion

The Provincial Government of DKI Jakarta, through Regional Regulation No. 1/2024 and its implementing regulations, grants the Governor the authority to provide relief, reduction, and exemption of the principal BPHTB, taking into account the conditions of the taxpayer and/or the taxable object. The technical implementation provisions are regulated in Governor Regulation No. 27/2025, which is further detailed specifically through Governor Decree No. 840/2025.

Governor Decree No. 840/2025 only regulates that reductions and exemptions of principal BPHTB are granted ex officio. Reductions of principal BPHTB are provided in three forms, namely 75% reduction, a 50% reduction, and a reduction principal BPHTB payable for building.

Meanwhile, the exemption of the principal BPHTB is granted to taxpayers who acquire rights of land and/or buildings as part of the implementation of central and/or regional government programs aimed at facilitating the construction and acquisition of housing for low-income communities. This exemption applies to BPHTB objects that are not included in the category of taxable object exemptions, with the criteria for low-income communities as regulated in Governor Decree No. 808/2024.

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References:

1. Regional Regulation No. 1 of 2024 on Regional Taxes and Retributions
2. Governor Regulation No. 27 of 2025 on the Administration and Procedures for Relief, Reduction, and Exemption of Principal and/or Administrative Penalties for Local Taxes
3. Governor Decree No. 840 of 2025 on Criteria for Granting Reductions and Exemptions from the Principal BPHTB
4. Governor Decree No. 808 of 2024 on BPHTB Object Exemption Criteria