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Many people ask: Is inherited property subject to tax?
In general, the answer is no.

Under Undang-Undang Nomor 36 Tahun 2008 on Income Tax (amending Undang-Undang Nomor 7 Tahun 1983), inheritance is specifically excluded from Income Tax (PPh) objects.

This means that when someone receives an inheritance, the assets received are not subject to Income Tax.

However, even though inheritance is not taxable, it must still be reported in the heir’s Annual Tax Return (SPT Tahunan).

 

Is Inherited Land Taxable?

Inherited land is also generally not subject to Income Tax at the time it is received. However, in practice, several important conditions must be considered.

If the land was never reported in the deceased’s Annual Tax Return or if there are administrative issues, the process may result in tax implications. The general income tax provisions refer to Undang-Undang Nomor 7 Tahun 2021 on the Harmonization of Tax Regulations.

In addition, although exempt from Income Tax, heirs must still pay attention to other potential obligations such as BPHTB (Duty on the Acquisition of Land and Building Rights), and PBB (Land and Building Tax),

in accordance with applicable regional regulations.

 

How to Ensure Inherited Land Is Exempt from Income Tax

To ensure that inherited land remains exempt from Income Tax during the title transfer process, heirs may apply for a Tax Exemption Letter (Surat Keterangan Bebas / SKB PPh) based on Peraturan Dirjen Pajak Nomor 30 Tahun 2009.

The application must be submitted to the local Tax Office where the deceased was registered, along with supporting documents such as Death certificate and Heir certificate. The SKB will later be used in the administrative process before a notary or Land Deed Official (PPAT).

 

Process for Transferring Title of Inherited Land

The procedure for transferring land title due to inheritance is regulated under Peraturan Pemerintah Nomor 24 Tahun 1997 on Land Registration.

Commonly required documents include:

• Original land certificate

• Death certificate of the owner

• Heir certificate

• Identity cards and family cards of the heirs

• Proof of PBB payment

• Proof of BPHTB payment (if applicable)

If there is more than one heir, a deed of inheritance distribution before a PPAT is generally required prior to the title transfer.

 

Conclusion

1. Inheritance is not subject to Income Tax.

2. It must still be reported in the Annual Tax Return.

3. Inherited land can remain exempt from Income Tax if administrative requirements are properly fulfilled.

4. The title transfer must be carried out officially through the Land Office.

Understanding the legal framework from the beginning helps heirs avoid tax complications and legal issues in the future.

 

 

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Disclaimer: This article is prepared for general legal information and educational purposes only. Regulations may change from time to time in accordance with applicable policies. For specific legal advice or case handling, please consult a legal professional.