Is 20% Tax on Property Sold Too High For You?
By Yanzalong
@yanzalong (18981)
Indonesia
November 30, 2012 5:09am CST
Tax on property sold is, in my opinion, too high for people of low income. Even for people of high income, 20% tax on property sold is considered high. I do not think people who sold their property would report true figure on property tax. If they sell a block of land for US$1,000, they will have only US$800 after property tax has been paid. US$200 is a lot of money for them. This is only based on my personal judgment. I don’t know whether or not 20% tax on property is too high for other people.
what's your take on this?
1 person likes this
3 responses
@ladysurvivor (4746)
• Malaysia
30 Nov 12
I think 20% is a ridiculously high price to pay on property tax. Is this true in the states or just an imaginary case? I would say nobody wants to pay this much proportion of their selling price to the tax department.
1 person likes this
@yanzalong (18981)
• Indonesia
1 Dec 12
That is why I decided not to sell my house. I am not a property seller. Why should I be levied such a high tax? I observed many persons are not willing to pay that much.
@koopharper (7523)
• Canada
30 Nov 12
That's a very high tax rate. Sounds to me like the government does want property changing hands easily.
@yanzalong (18981)
• Indonesia
1 Dec 12
That is right. That is why people who sold their land or houses would not be honest about it.
@owlwings (43915)
• Cambridge, England
30 Nov 12
What you are referring to is not a property tax (which is a regular payment required from owners of property - usually land or buildings - and calculated in various ways depending on the country) but a sales tax or 'stamp duty'
This tax is unlikely to be as much as 20% of the whole value of the sale. It would usually be either based on the profit that the seller made or be calculated on a proportion of the sale (very often based on a set scale of exemptions so that 20% of the sale value above a certain amount would be charged). Exactly how the tax is calculated varies widely from country to country.
According to this page: http://www.globalpropertyguide.com/Asia/Indonesia/Taxes-and-Costs it seems that you may be referring to a Sales Tax on "luxury houses, apartments, townhouses, and condominium units." This represents quite a small proportion of property sales.
It is not very clear from the way the information is presented but it appears that it may be classed as a Capital Gains tax. In most cases, this appears to be a 5% flat rate levied on the transfer value of the property. Only a relatively small proportion of properties would qualify for a 20% levy and these certainly would not be owned by people of low income!
In spite of what is suggested by the way it is worded on this particular page, Capital Gains Tax usually refers to a tax on Gains (or profit), not on the whole value of a transaction. The seller would normally be able to deduct the price he paid for the property and also the costs (or a proportion of them) of any improvements he had made when being assessed for tax.
Unfortunately, the site above was the only information I was able to find in English. The exact details of the taxation system, however, should be available here: http://www.pajak.go.id/
@yanzalong (18981)
• Indonesia
1 Dec 12
Thank I have visited that page. I just don' t agree with taxtation system in my country. To me, its still too burdening for a person who had to sell his home due to being in need of cash, not because he wanted to make profit from the sale. There should be another treatment for such a tax.
