Bargain Sale Deed Template for Indonesia
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What is a Bargain Sale Deed?
The Bargain Sale Deed is a specialized legal instrument used in Indonesian property transactions where the agreed sale price is intentionally set below market value. This type of deed is commonly used in family transfers, charitable donations, or strategic business arrangements where parties deliberately agree to a reduced price. The document must comply with Indonesian Civil Code, Basic Agrarian Law, and related regulations governing property transfers. It requires careful documentation of both market value and actual sale price, along with justification for the price difference. The deed must be executed before a Land Deed Official (PPAT) and properly registered with relevant authorities. Special attention is given to tax implications, as Indonesian tax authorities may scrutinize below-market transactions. The document is particularly relevant in scenarios involving partial charitable contributions, family estate planning, or corporate restructuring where property transfers at reduced values are desired.
About the Bargain Sale Deed
A Bargain Sale Deed is a critical legal document for Indonesian property transactions where you deliberately sell property below its fair market value. Unlike standard property sales, this specialized deed acknowledges the intentional price reduction while ensuring full legal compliance with Indonesian property laws.
When do you need this document?
You'll need a Bargain Sale Deed when transferring property to family members at reduced rates, making partial charitable donations of real estate, or executing corporate restructuring involving below-market property transfers. This document is particularly valuable in estate planning scenarios where you want to transfer property while retaining some economic benefit, or when supporting charitable organizations through discounted property sales. Indonesian tax authorities specifically recognize these transactions when properly documented through a Bargain Sale Deed.
Key legal considerations
Your Bargain Sale Deed must clearly establish both the fair market value and actual sale price, providing legitimate justification for the difference. The document requires detailed property descriptions including certificate numbers, exact measurements, and boundary specifications as mandated by Indonesian property law. You must include proper identification of all parties, witness requirements, and acknowledgment clauses that demonstrate informed consent to the below-market transaction. Tax implications are significant – the Indonesian Tax Authority may assess additional duties based on market value rather than sale price, so your deed should address potential tax consequences. The document must also specify whether any portion of the transaction constitutes a charitable donation for tax deduction purposes.
Legal requirements in Indonesia
Under Indonesian Civil Code and Basic Agrarian Law No. 5 of 1960, your Bargain Sale Deed must be executed before a certified Land Deed Official (PPAT) to ensure legal validity. Government Regulation No. 24 of 1997 requires specific registration procedures with local land offices within 30 days of execution. You must obtain professional property valuation to establish fair market value, and the deed must comply with Law No. 28 of 2009 regarding Land and Building Transfer Duty (BPHTB) calculations. Income Tax Law No. 36 of 2008 may impose additional obligations on both buyer and seller, particularly regarding capital gains treatment. The deed requires notarization, witness signatures, and proper registration stamps as mandated by Indonesian legal procedures. All parties must provide valid identification documents, and foreign buyers face additional requirements under Indonesian foreign investment regulations.
GOVERNING LAW
Applicable law
This Bargain Sale Deed is drafted to comply with Indonesia law. Key legislation includes:
Basic Agrarian Law No. 5 of 1960 (Undang-Undang Pokok Agraria): Fundamental law governing land rights and land registration in Indonesia, essential for any property transfer deed
Government Regulation No. 24 of 1997 on Land Registration: Specifies detailed procedures for land registration and property transfers, including requirements for deed preparation and registration
Law No. 28 of 2009 on Regional Taxes and Retribution: Regulates the Land and Building Transfer Duty (BPHTB) applicable in property transactions, including bargain sales
Income Tax Law No. 36 of 2008: Governs taxation aspects of property transactions, including provisions for income tax on property transfers
Government Regulation No. 34 of 2016: Regulates the final income tax on transfer of land and/or building rights, which applies even in bargain sale situations
Law No. 30 of 2004 on Notary Position: Governs the role and responsibilities of notaries in preparing property transfer deeds and other legal documents
Minister of Agrarian Affairs Regulation No. 3 of 1997: Provides detailed implementation provisions for land registration, including forms and requirements for deed preparation
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