Annual property tax and running costs
The yearly land and building tax (PBB-P2) is set and collected by each regency, within a national cap of 0.5%. A foreign-owned company also has recurring reporting duties.
- PBB-P2 is governed by Law 1 of 2022 (UU HKPD), whose rules took effect on 5 January 2024. The maximum rate is 0.5%, up from 0.3% under the old law (DDTCNews, 2024).
- The tax is collected by the regency (kabupaten), and each regency sets its own rate by regional regulation (Hukumonline, 2025). On Sumba that means four different regencies.
- Each taxpayer gets a tax-free allowance (NJOPTKP) of at least IDR 10 million, applied to only one property per regency per year. The taxable base is 20% to 100% of the official value (NJOP) after that allowance (DDTCNews, 2024).
- The official value (NJOP) is reviewed every 3 years, or yearly for some properties in fast-growing areas (DDTCNews, 2024).
- The tax is owed by whoever actually holds rights over the land or owns, controls or benefits from the building (DDTCNews, 2024). Your contract should say who pays it, especially in a lease.
- Example from Sumba Barat (Regional Regulation 3 of 2025, enacted 20 August 2025): rates rise from 0.1% for NJOP up to IDR 500 million to 0.5% above IDR 2 billion. Land for food production and livestock pays 0.08%. Rates in the other three regencies were not checked.
- The same Sumba Barat regulation sets a monthly waste collection levy for hotels, from IDR 150,000 for a 'Melati' (non-star) hotel to IDR 420,000 for a 4-star hotel.
- A PT PMA of medium or large scale must file an investment activity report (LKPM) every quarter through the OSS system. Missing two reports in a row can lead to sanctions up to loss of the business licence (Investment Minister Regulation 5/2025, per izin.co.id, 2026).
Sources: news.ddtc.co.id, hukumonline.com, jdih.sumbabaratkab.go.id, izin.co.id
Checked 2026-11-08. Not legal or financial advice.
More guides
Visas and residence permits
Indonesia has several long-stay permits for foreigners who want to live on Sumba. They differ in who qualifies, how much money you must show and whether you may work.
Opening a bank account
A personal account is much easier to open once you hold a KITAS. A company account for a PT PMA needs the company's full set of papers and, in most banks, the director in person.
Sending money to buy property
Large payments for property usually go by bank transfer and are paid in rupiah inside Indonesia. Banks report cross-border transfers, and cash over IDR 100 million must be declared at the border.
Building permits: PBG and SLF
Before you build you need a zoning approval and a building approval (PBG), and before anyone moves in or rents the building you need a certificate of fitness (SLF).
Solar, water and internet
Sumba has long, dry seasons and patchy grid power and mobile data. Many owners plan for their own solar, water storage and satellite internet.
Culture, land and respect
On Sumba, land is tied to clans, ancestors and ritual. Disputes over coastal land for tourism have turned violent, so slow, respectful contact with the village matters as much as the paperwork.