Many parents want it settled who gets the house or the land while they are still around. The usual way to do that is a hibah, a gift made during the giver’s lifetime with no sale involved.

A hibah can bring order to family affairs. Done without understanding the rules, it can also set siblings against each other years later.

This guide is for parents planning to gift property to a child, and for the children receiving it. It covers how a hibah differs from inheritance and sale, the procedure with a PPAT (Pejabat Pembuat Akta Tanah, the official who draws up land deeds), the taxes, the legal limits, and steps to prevent disputes.

Gift, inheritance and sale: the difference

All three move a right from one person to another, but in different ways:

  • A hibah (gift) happens while the giver is alive. The right passes through a deed of gift that is then registered at the Kantor Pertanahan (the district land office), with no payment.
  • An inheritance (warisan) happens after the owner dies. The estate is divided among all the heirs under the inheritance law that applies to the family.
  • A sale (jual beli) involves payment. The seller pays a final income tax (PPh final) of 2.5% of the gross value, and the buyer pays BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan, the acquisition duty).

A hibah suits parents who are sure about the division and want the child to hold the certificate in their own name soon. If the family hasn’t agreed on the division, a hibah won’t solve that. It can create new problems instead.

One more thing people often forget: once the gift is done, the house belongs to the child. The parents can no longer sell or pledge it without that child’s agreement.

The deed of gift is made before a PPAT

A gift of land and buildings is made with a deed of gift (akta hibah) drawn up by a PPAT. A stamped statement signed at home is not enough. The PPAT deed is what the land office registers, just as the AJB (Akta Jual Beli, the deed of sale) is in a sale.

The giver and the recipient appear before the PPAT to sign. If the house is marital property, the giver’s spouse consents too. If the recipient is a minor, ask the PPAT who represents them and which documents are needed.

Choose a PPAT whose working area covers the land’s location. The role of the PPAT and how it differs from a notary is explained in our guide to notaries and PPATs in property deals.

Documents usually requested

The exact list varies between PPATs and offices, but generally includes:

  • The original certificate in the giver’s name.
  • ID cards (KTP) and family cards (Kartu Keluarga) of the giver and the recipient.
  • The giver’s marriage certificate, and the spouse’s consent if the property is marital property.
  • Proof of the family relationship, such as the child’s birth certificate or a family card that lists both.
  • The latest PBB bill (SPPT) and payment receipt for the annual land and building tax.
  • A tax number (NPWP), if requested for tax purposes.
  • The income tax exemption letter and proof of BPHTB payment, arranged before the deed is signed.

Before the deed is made, the PPAT also checks the certificate at the land office to make sure there is no block, seizure or Hak Tanggungan (mortgage lien) still on record.

Taxes on a gift from parent to child

There are two taxes to understand, one on each side.

The giver’s income tax

A transfer of land or buildings is in principle subject to a 2.5% final income tax on the gross value, under PP No. 34 Tahun 2016. A gift to blood relatives in a direct line one degree apart, meaning parents and their biological children, is excluded from this tax.

To get the exclusion, apply to the tax office for a surat keterangan bebas (SKB, an exemption letter). The PPAT will ask for the SKB before the deed is signed, so start early.

A gift to a grandchild, nephew or niece, sibling or anyone else is treated differently. Ask the tax office or the PPAT before choosing a gift as the route for them.

The recipient’s BPHTB

The child receiving the gift still pays BPHTB. Under UU No. 1 Tahun 2022 (the HKPD law on central and regional finance), the rate is at most 5% of the acquisition value after deducting the NPOPTKP (Nilai Perolehan Objek Pajak Tidak Kena Pajak, the tax-free threshold).

The NPOPTKP and some reductions are set by each kabupaten or kota in its own regulation. So the figures differ from one area to the next. Ask the local regional revenue office or the PPAT. An overview of property taxes is in our guide to taxes when buying and selling property.

Limits on a gift

For Muslim families, the Kompilasi Hukum Islam (KHI, the compilation of Islamic law applied by Indonesia’s religious courts) has three key rules:

  • At most one third of the estate. A gift is limited to one third of the giver’s assets (Article 210). If the house is the parents’ only major asset, the numbers need careful thought.
  • It can count as inheritance. A gift from parent to child may be counted as part of that child’s inheritance (Article 211). So the other siblings can ask for it to be taken into account when the estate is divided.
  • It can’t be taken back, except a gift from a parent to their child (Article 212).

For non-Muslim families, the civil law also protects a set share for certain heirs. Ask a notary how your gift would be counted later.

If you ever want to take a gift back, it isn’t as simple as cancelling it on paper. Talk to a notary, PPAT or legal adviser before you do anything.

Under UU No. 1 Tahun 1974 on marriage, a house acquired during the marriage is harta bersama (marital property). To gift it, both husband and wife must agree.

If one spouse has died, their share has already passed to their heirs, so the heirs must be involved too. The full picture is in our guide to marital property in home sales.

Written consent from your other children isn’t always required. But these steps help prevent disputes:

  • Talk openly with all your children before going to the PPAT, including the reasons for the division.
  • Make a written statement that they know about and agree to the gift, signed before a notary or legalised.
  • Record how other assets are divided, if the other children receive their share in another form.
  • Write down any living arrangement, if the parents still want to live in the house being gifted.

Steps you can follow

  1. Agree within the family which property is being gifted, to whom, and what the other children receive.
  2. Make sure the certificate is in the giver’s name, the PBB is paid, and no lien is still on record.
  3. See a PPAT in the area where the land lies for a certificate check and a document list.
  4. Get the income tax exemption letter from the tax office, then pay the BPHTB in the recipient’s name.
  5. Sign the deed of gift before the PPAT.
  6. The PPAT registers the deed at the land office to transfer the title to the recipient.
  7. Keep the deed, the tax receipts and the family statement somewhere safe.

If a parent dies before a gift is made, the route becomes inheritance. The steps are in our guide to transferring an inherited certificate.

If your family is thinking about selling or dividing property in Kalimantan and has questions, you can reach Vorneo on WhatsApp.