Exit and resale: selling a lease, a licence and a trading record

Stage nine states the problem: no MLS, no published sold-price series, and the years left on the lease move the price more than the kitchen does. This is what happens after that. How a sale is assembled when there is nothing to look the price up in, what actually changes hands when a lease or a company is transferred, and what the state takes on the way out.

A price is assembled, not looked up

There is no comparable to point at, so a price gets built from the three things a buyer can independently verify: how many years are left, what permissions are held, and what the property has earned. Everything else in the negotiation is assertion.

Asking prices are visible and achieved prices are not, so the listings a buyer studies before making you an offer are, by definition, the ones that did not sell. Your evidence file is the only counterweight to that. A seller who can hand over twenty-four months of booking data, a held licence and a clean set of company filings is negotiating from a different position to one asking a buyer to take their word.

The pool of buyers who can transact on your particular structure is also small. A leasehold with eleven years left, a Pondok Wisata in the owner's name and a management contract with a notice period is not a product with a hundred bidders. In practice the first credible offer is often close to the price, which is an argument for being ready before you list rather than after.

The years are the asset

On a lease, residual term drives the price more than condition does, and it does not fall in a straight line. Value tracks the present worth of the years still to run. Our lease decay tool at /guides/lease-decay models it as an annuity at a 7% discount rate, which produces this for a thirty-year lease:

• 25 years left: 94% of the original value
• 20 years left: 85%
• 15 years left: 73%
• 10 years left: 57%
• 5 years left: 33%

Read the gaps rather than the levels. The year that takes a lease from thirty to twenty-nine costs about 1% of its value. The year that takes it from ten to nine costs about 4%. The decay accelerates precisely when you are trying to sell, which is why the decision to exit is one you should make several years before you make it.

The same arithmetic disciplines what you should pay for an extension. Extending a thirty-year lease to fifty adds about 11% to today's value at 7%. Twenty extra years sounds like two thirds more lease. It is worth about a ninth more money, because those years are twenty to fifty years away. A vendor pricing an extension as though the years were worth what the first ones were is a vendor to negotiate with.

That is a model, not a valuation. There is no Bali sold-price series to calibrate it against, and every surface we render it on says so.

Assigning a lease

A lease over Indonesian land is a contract, not a registered right. The objects of land registration are listed at Pasal 9(1) of PP 24/1997 – hak milik, hak guna usaha, hak guna bangunan, hak pakai, hak pengelolaan, wakaf land, strata title, hak tanggungan and state land. Hak sewa is not among them. Your name is on a notarial deed in a notary's protocol. It is not on the certificate at the land office, and it never was.

Three things follow, and each of them is an exit problem you can solve on the day you buy.

First, the landowner is a party to your sale. Article 1559 of the Indonesian civil code provides that a lessee who has not been given permission may neither sub-let nor assign the lease to another, on pain of cancellation of the lease and damages. So an assignment clause in the original deed is not a nicety. Without one you are asking a landowner for a favour at the moment you have least leverage.

Second, the price of that consent has to be fixed in advance. Ask for the transfer fee as a figure or a stated percentage in the original deed. "Subject to the owner's agreement" is a blank cheque written by your buyer's counterparty.

Third, check whether the extension option survives the transfer. If the right to extend is expressed personally to you rather than to you and your successors, you are selling a shorter lease than the one you bought, and the buyer's valuation will say so.

Mechanically the assignment is done by notarial deed, with the landowner signing, and the original lease deed and the land certificate sighted at the same appointment. We could not find a national model form for the deed and practice appears to vary by notary, so read the draft rather than assuming it mirrors your original.

Selling the company instead of the building

If you hold through a PT PMA there are two exits. The company sells the asset, or you sell the shares in the company.

A share sale changes the tax entirely. BPHTB is charged on acquiring one of six named rights over land and buildings – hak milik, hak guna usaha, hak guna bangunan, hak pakai, strata title and hak pengelolaan, at Pasal 44(3) of UU 1/2022. Shares are not on that list, and no right over land changes hands, so no acquisition duty arises and no final tax on the transfer of land arises either.

What arises instead is a withholding under Article 26. PMK 81 of 2024, in force since 1 January 2025, sets it out at Pasal 238 to 240. A non-resident selling shares in an Indonesian company is taxed at 20% of a deemed net income, the deemed net income is fixed at 25% of the sale price, so the charge is 5% of the price, and it is final. Where a double tax treaty applies, Pasal 238(2) says the withholding is only made if the treaty gives Indonesia the taxing right, which for many treaties on the sale of shares it does not.

The mechanics matter as much as the rate. The buyer withholds and remits it (Pasal 239(1)). If the buyer is also a non-resident, the company itself is appointed to collect (Pasal 239(4)). And the company may only record the deed transferring the shares once the seller produces the withholding slip proving the tax was paid (Pasal 240(1)). That last one is the reason to ask for the slip from the last transfer when you are the one buying shares in an existing company. If nobody can find it, either the tax was not paid or the share register is not what you were shown.

The offsetting cost of a share sale is that your buyer inherits everything the company has ever done: the filings, the penalties, the licences and the arguments. Three clean years of accounts is worth money at exit, and the only place to earn it is in year one.

What the state takes on an asset sale

If it is the asset that moves rather than the shares, PP 34 of 2016 governs. Five points from the text.

The rate is 2.5% of the gross transfer value, paid by the seller, at Pasal 2(1)(a). The 1% rate is for simple housing sold by a developer whose main business is transferring land, and the 0% rate is for transfers to government. Neither will be you.

It is a gate on completion, not an invoice afterwards. Pasal 3(1) requires the seller to pay before the deed, decision, agreement or auction record is signed, and Pasal 3(5) says the officiating official may only sign once the seller produces the payment receipt that the tax office has checked. Your notary cannot complete around it.

Understating the price does not work in the direction people expect. On the buyer's side, if the declared acquisition value is lower than the NJOP used for land and building tax in the year of the acquisition, the NJOP becomes the BPHTB base (Pasal 46(3) of UU 1/2022). On the seller's side, where the parties are related, PP 34/2016 Pasal 2(2)(c) uses the value that should have been received rather than the value stated.

Your buyer pays BPHTB on top, at a rate their regency sets by local regulation, capped at 5% (Pasal 47(1) of UU 1/2022), less a tax-free allowance of at least IDR 80 million on a first acquisition in that region (Pasal 46(5)). Badung and Gianyar are not the same bill on the same price.

The fifth point catches off-plan buyers specifically. Selling before completion by having the contract reassigned is itself a taxable transfer. PP 34/2016 Pasal 1(3)(b) treats the income of a buyer named in a PPJB before the contract is amended as taxable, and Pasal 5(1) makes that original buyer pay it themselves. A flip is a transaction, and the regulation says so in terms.

We could not establish how an assignment of a lease is taxed and we are not going to guess. UUPA Pasal 16(1)(e) does list hak sewa among the rights over land, which suggests the words of PP 34/2016 reach it, but there is no registered right and therefore no official for Pasal 3(5) to gate, and we found no ruling from the tax authority settling the point. Get the answer from your notary in writing before you agree a price, not after.

A trading villa and a house are not the same asset

What a buyer of a working villa is really acquiring is a permission and a track record they cannot assemble themselves in the time available. Concretely: a Pondok Wisata that is held rather than obtainable, an NIB, a PBG, an SLF where the building is finished, and enough booking history to underwrite an offer.

We have no figure for what that is worth. Nobody publishes paired sales of licensed and unlicensed villas in Bali, and any percentage you are quoted for it was made up. What we can say is what a serious buyer asks for, because it is what we ask for:

• Twenty-four months of profit and loss, reconciled to bank statements rather than to a spreadsheet.
• The OTA accounts with their review history, and whether they transfer or reset.
• The management agreement, its fee, and its notice period.
• Service charge accounts and evidence that the sinking fund exists in cash.
• For a company-held asset, the filed accounts, tax returns and investment reports.

Note which of those travel with which exit. A licence attaches to the property and its zoning. A trading history, a bank record and an OTA account attach to the entity. Sell the shares and the operating history goes with them. Sell the asset and your buyer starts the reviews again from zero, which is a real deduction from the price and one you should model before you choose the route.

How long it takes

Budget six to twelve months to sell well, and about 5% to an agent on top of the 2.5% to the state.

That range has no dataset behind it. There is no transaction registry to derive it from. It is what our own completions and the notaries we work with report, and it is wide because the buyer pool is small and seasonal. Faster sales exist and they are priced accordingly: if you need ninety days, you are funding the discount yourself.

The exit is decided on the day you buy

• Get the assignment clause, the landowner's consent and the transfer fee into the original lease, in figures.
• Choose the structure with the exit in mind, because a share sale and an asset sale are taxed differently, transfer different things and attract different buyers.
• Buy enough residual term that a buyer four years from now is still on the flat part of the curve, not the cliff.
• Start the evidence file at reservation, not at listing. It is the only asset in this market that substitutes for a price history.