Inheritance Tax

Helpful Herbert

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I have been trying to understand inheritance tax for mixed marriage couples as we're thinking of buying a house. According to tax guides online there is no inheritance tax in Indonesia, but the situation seems to be a lot more complicated than that.

So for a WNI/WNA couple with a pre-nup and dual national kids, currently no NPWP, where the SHM will be in the name of the WNI, and normal rules (i.e. no special religious rules or local traditional rules), my questions are as follows:

If the owner (WNI) dies, then what happens to the property:
  • transferred automatically to the WNA husband, but he has to sell within one year? Does the SHM then have the WNA husband's name on it for a period of time?
  • or transferred equally to the WNA husband and kids (assuming they are by then adults and have chosen WNI citizenship) and do they have to sell within one year or not? Whose name would be on the new certificate during this one year period?
  • some agents have mentioned that the Indonesian seller has to pay 5% pajak waris (inheritance tax) when we buy from them - how can this be if there is no inheritance tax?
 
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waarmstrong

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I am under the impression that when real estate is sold both the seller and the buyer pay a 5% tax at transfer regardless of the how the property was acquired. My assumption, or maybe speculation, is that since foreigners cannot own fee simple property, the SHM would remain in the name of the dead owner for the one year sale grace period.
 

HappyMan

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...My assumption, or maybe speculation, is that since foreigners cannot own fee simple property, the SHM would remain in the name of the dead owner for the one year sale grace period.
I had the same thought. It is common for house sales to be delayed as all the inheritors of a house must be assembled and give consent to the sale. It seems rather unlikely that all 14 of the persons involved in the sale I am thinking of had their names on the deed. I'd ask a family for clarification, but it might look bad if they keeled over in the near future.
 

centurion

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I have been trying to understand inheritance tax for mixed marriage couples as we're thinking of buying a house. According to tax guides online there is no inheritance tax in Indonesia, but the situation seems to be a lot more complicated than that.

So for a WNI/WNA couple with a pre-nup and dual national kids, currently no NPWP, where the SHM will be in the name of the WNI, and normal rules (i.e. no special religious rules or local traditional rules), my questions are as follows:

If the owner (WNI) dies, then what happens to the property:
  • transferred automatically to the WNA husband, but he has to sell within one year? Does the SHM then have the WNA husband's name on it for a period of time?
  • or transferred equally to the WNA husband and kids (assuming they are by then adults and have chosen WNI citizenship) and do they have to sell within one year or not? Whose name would be on the new certificate during this one year period?
  • some agents have mentioned that the Indonesian seller has to pay 5% pajak waris (inheritance tax) when we buy from them - how can this be if there is no inheritance tax?
When an Indonesian spouse dies, the Kelurahan will issue a list of inheritors-Ahli Waris. If the foreigner is the inheritor, his/her name will be on the list. The inheritors have the right to agree about the division of the property or cash it, divide it, dispose, distribute among them etc, with joint signatures of all of them. So if SHM has to be sold, all inheritors will sign the papers.

Division should be according to the law, or as inheritors agree. If they cannot agree, the court will divide the assets according to the law.
 

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