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Zantara AI
AI Tax Advisor
Bali Zero handles visas, company setup, tax and property compliance in Indonesia. Ask us directly on WhatsApp.
Chat with Bali Zero on WhatsAppTL;DR: Rental income from land and buildings in Indonesia is taxed at a flat 10% PPh Final on gross rental — no deductions for maintenance, mortgage, or fees. If your tenant is a company, they withhold and pay. If your tenant is an individual, you self-assess by the 15th of the following month. Airbnb hosts pay 10% on gross before platform commissions. Villa operators may qualify for 0.5% UMKME if licensed as Pondok Wisata.
Rental income from land and buildings in Indonesia is taxed at a flat 10% PPh Final on the gross rental payment. This applies to all types of property rental -- residential houses, villas, apartments, commercial offices, warehouses, and land leases.
The "final" designation means this 10% is your complete tax obligation on the rental income. You do not include it again in your progressive income tax calculation, and no deductions (maintenance, insurance, mortgage interest, management fees) are subtracted before applying the 10% rate.
For the large community of foreign property owners and villa operators in Bali, understanding this tax is essential. Whether you rent out a single villa in Canggu or manage a portfolio of rental properties through a PT PMA, the 10% PPh Final applies.
The calculation is simple:
Rental Income Tax = 10% x Gross Rental Payment
| Rental Scenario | Monthly Rent | Annual Rent | Annual Tax (10%) |
|---|---|---|---|
| Villa in Seminyak | IDR 25,000,000 | IDR 300,000,000 | IDR 30,000,000 |
| Apartment in Denpasar | IDR 8,000,000 | IDR 96,000,000 | IDR 9,600,000 |
| Commercial shop in Canggu | IDR 15,000,000 | IDR 180,000,000 | IDR 18,000,000 |
| Rice field lease in Ubud | IDR 2,000,000 | IDR 24,000,000 | IDR 2,400,000 |
| Warehouse in Denpasar | IDR 30,000,000 | IDR 360,000,000 | IDR 36,000,000 |
The 10% applies to the total payment received by the landlord, including:
The 10% does not apply to:
The identity of the tenant determines how the tax is collected:
When the tenant is a PT, CV, government body, or any registered pemotong pajak:
Example:
When the tenant is an individual (not a registered tax withholder):
Example:
| Tenant Type | Who Withholds | Landlord Receives | Payment Deadline |
|---|---|---|---|
| PT/CV/Company | Tenant | 90% of gross | 10th of next month |
| Government entity | Tenant | 90% of gross | 7th of next month |
| Individual (person) | Landlord self-assesses | 100% of gross | 15th of next month |
| Foreign individual | Landlord self-assesses | 100% of gross | 15th of next month |
If you own a villa personally (or through a nominee) and rent it out:
If your PT PMA owns and operates the rental villa:
If your villa is registered as a Pondok Wisata (tourist accommodation):
| Factor | 10% PPh Final (Rental) | 0.5% PP 55 (UMKME) |
|---|---|---|
| Rate | 10% of gross | 0.5% of gross turnover |
| Eligibility | Any landlord | Revenue < IDR 4.8B, registered UMKME |
| Duration | Permanent | Up to 4 years (PT) or 7 years (individual) |
| Applies to | Passive rental income | Active business income |
| Licensing | Basic | Pondok Wisata, NIB, OSS |
If your annual villa rental income is IDR 500,000,000:
The difference is enormous, which is why proper structuring and licensing matters.
If you list a property on Airbnb, Booking.com, or similar platforms in Indonesia:
This is a common pain point for Airbnb hosts:
| Item | Amount |
|---|---|
| Guest pays (via Airbnb) | IDR 10,000,000 |
| Airbnb service fee (3%) | IDR 300,000 |
| Host receives | IDR 9,700,000 |
| Tax base (gross before commission) | IDR 10,000,000 |
| PPh Final 10% | IDR 1,000,000 |
| Net income after tax | IDR 8,700,000 |
You pay 10% on the full IDR 10 million, not on the IDR 9.7 million you actually receive. The Airbnb commission is not a deductible expense under the PPh Final regime.
| Feature | Short-Term (< 1 month) | Long-Term (>= 1 month) |
|---|---|---|
| Tax rate | 10% PPh Final | 10% PPh Final |
| Common platforms | Airbnb, Booking.com | Direct lease, agents |
| Who withholds | Usually landlord (tourists are individuals) | Depends on tenant type |
| VAT applies? | Possibly (if PKP) | No (residential rental exempt) |
| Licensing needed | Pondok Wisata recommended | Basic rental agreement |
Commercial property rental is generally subject to PPN 12% (the rate as of January 2025):
| Rental Type | PPN Status |
|---|---|
| Commercial office/shop | Subject to PPN 12% |
| Warehouse/industrial | Subject to PPN 12% |
| Residential rental | Exempt from PPN |
| Boarding house (kos) | Exempt from PPN (if < 10 rooms) |
| Hotel/Pondok Wisata | Subject to PBJT (local tax), not PPN |
If you are a PKP (Pengusaha Kena Pajak) renting commercial property, you must:
Residential rental is exempt from PPN, which is favorable for villa owners renting to long-term tenants.
| Tax | Deadline | Filing |
|---|---|---|
| PPh Final 10% (withheld by tenant) | 10th of next month | SPT Masa PPh 4(2) |
| PPh Final 10% (self-assessed) | 15th of next month | SPT Masa PPh 4(2) |
| PPN (if PKP) | End of next month | SPT Masa PPN |
Keep these documents for at least 10 years:
A KITAS holder owns a villa in Canggu (through nominee) and rents to short-term tourists via Airbnb, earning IDR 400,000,000/year.
| Item | Annual Amount |
|---|---|
| Gross rental income | IDR 400,000,000 |
| PPh Final (10%) | IDR 40,000,000 |
| PBB (annual property tax) | IDR 8,000,000 |
| Total tax | IDR 48,000,000 |
| Net after tax | IDR 352,000,000 |
| Effective rate | 12% |
A PT PMA operates 3 rental villas generating IDR 1,200,000,000/year in rental income plus IDR 200,000,000 in service fees.
| Item | Amount |
|---|---|
| Rental income | IDR 1,200,000,000 |
| PPh Final on rental (10%) | IDR 120,000,000 |
| Service fee income | IDR 200,000,000 |
| Corporate tax on services (22%) | IDR 44,000,000 |
| PBB (3 properties) | IDR 24,000,000 |
| Total tax | IDR 188,000,000 |
An expat who previously held KITAS owns an apartment and returns to their home country but continues renting it out through a local agent.
This is a complex area -- consult a tax advisor if you are earning Indonesian rental income while living abroad.
The difference between 10% PPh Final (rental) and 0.5% UMKME (business) is 20x. If you qualify for Pondok Wisata licensing, the tax savings can be substantial.
If you operate a villa with additional services (breakfast, transport, activities), keep rental income separate from service income. Rental income gets 10% PPh Final; service income goes through corporate tax (potentially 22%, but allows expense deductions).
Without proper Bukti Potong from corporate tenants, you cannot prove that withholding tax was already paid, and you may be double-taxed.
If your tenants are mostly PKP companies, registering as PKP allows you to charge PPN and claim input PPN credits on property expenses (renovations, furnishings, maintenance). This can create a net benefit despite the administrative burden.
Your total tax burden includes PBB. If NJOP increases dramatically, your PBB rises -- monitor this annually and file objections if warranted.
More in this series — Rental & property income tax
Rental income from land and buildings is taxed at 10% PPh Final on the gross rental amount. No deductions are allowed for maintenance, management fees, or mortgage interest. A villa rented for IDR 200 million per year generates IDR 20 million in tax.
If the tenant is a company or registered tax withholder (pemotong pajak), the tenant withholds 10% from the rent payment and remits it. If the tenant is an individual, the landlord must self-assess and pay the 10% tax directly.
Yes. All rental income from platforms like Airbnb must be reported and taxed at 10% PPh Final. If you receive rent directly from individual tourists, you must self-assess and remit the tax. Operating without proper reporting can result in penalties.
No. There is no minimum threshold for rental income tax. Even small amounts of rental income are subject to the 10% PPh Final. However, if your total annual income is below the PTKP threshold (IDR 54 million for a single individual), you may not have additional income tax obligations beyond the PPh Final already paid.
No. PPh Final 10% applies to gross rental income with no deductions. This is both a simplification and a limitation. You cannot deduct property maintenance, insurance, management fees, mortgage interest, depreciation, or any other expense from the rental income before applying the 10% rate.
Managing rental income tax in Bali requires understanding property tax, income tax, VAT, and local licensing simultaneously. If you are unsure which structure applies to your situation — individual ownership, PT PMA, or Pondok Wisata — or need help with monthly and annual filings, speak with a BaliZero tax advisor directly.
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