Rental income tax in Indonesia: PPh 26, the old PHR and who pays each one

Rent from a Bali villa carries two separate taxes. Jakarta levies income tax on what the owner earns. The regency levies PBJT, a tax on accommodation that the guest pays on top of the nightly rate. One doesn't replace the other, and on a nightly let you face both.

PBJT is what used to be called PHR, the hotel and restaurant tax. Law 1/2022 folded PHR into a broader tax on specific goods and services and capped the accommodation rate at 10%. Badung charges the full 10% under Perda 7/2023, and the list explicitly covers villas and private homes used as hotels. Because a nightly stay carries PBJT, VAT doesn't apply to it.

Source: Law 1/2022 (HKPD); Perda Badung 7/2023; PP 34/2017; Income Tax Law, Article 26; PMK 70/2020, Article 6

PP 34/2017 sets its 10% final rate for residents and permanent establishments. An owner who lives abroad falls under Article 26 of the Income Tax Law instead, which takes 20% of the gross amount. Rent appears on the list of income it covers. Ortax set out this reading on June 19, 2026, and PwC's Indonesia tax summary lists the same 20%.

Your tax treaty won't help here. Under Article 6 of the treaties Indonesia has signed, including those with the United States, Australia, the United Kingdom and Singapore, income from immovable property may be taxed where the property sits. The treaty lets your home country credit the Indonesian tax. It doesn't cut the Indonesian rate.

Source: Income Tax Law, Article 26; Ortax, June 19, 2026; PwC Worldwide Tax Summaries, Indonesia, June 11, 2026; our example

Rent a villa to a tenant for a year or more and, as a resident, you pay a final 10% of the gross amount. Nothing is deductible, and once you pay it, you're done.

Nightly lets are less settled. DDTC's reading, published August 12, 2024, is that a lodging service isn't rent of a building, so it falls outside the 10% final rate and counts as business income. A resident individual could then use the 0.5% turnover tax, which PP 20/2026 made permanent from April 22, 2026, with the first Rp 500,000,000 of yearly turnover exempt. Airbnb's 2024 host tax guide for Indonesia mentions both the 10% and the 0.5% rates.

We don't pick between the two readings for you. If you'll be a resident and let nightly, get a written opinion from a registered tax consultant before the first booking, and model your yield on the 10% until you have it.

Source: PP 34/2017; PP 20/2026; DDTC, August 12, 2024 and November 17, 2025; Airbnb, Indonesia tax guide for hosts, 2024

Listings for long-term rentals often say "excl. tax". It means the tax goes on top. A villa at Rp 20,000,000 a month excluding tax costs the tenant Rp 22,000,000 at the 10% rate if the tenant bears it.

Disputes also come up over the base. PP 34/2017 counts service charges, maintenance, cleaning and security as part of the gross rent, even when the contract bills them on a separate line. Splitting the payment into "rent" and "services" doesn't shrink the tax. Write into the contract who pays the tax, at what rate, and whether the stated figure includes it.

Source: PP 34/2017; DDTC on service charges in the rental base

If your tenant is a company, a permanent establishment, a government body or a foreign representative office, the tenant withholds the tax and pays it for you. An individual tenant doesn't, so the duty stays with you as the landlord. For a non-resident owner whose villa is run by a local management company, the company that pays out your share withholds the 20% and should give you the withholding slip (bukti potong).

Under PMK 81/2024, tax withheld in one month is due by the 15th of the next and reported through e-Bupot by the 20th. Everything runs through the Coretax system, live since January 1, 2025. Annual returns are due March 31 for individuals and April 30 for companies. Filing late costs Rp 100,000 for a person and Rp 1,000,000 for a company, and late payment accrues interest at the reference rate plus 5%, divided by 12, for each month.

1. 01
   Settle your residency

   It decides 20% or the resident regime.

2. 02
   Name who withholds

   Put it in the lease or the management agreement.

3. 03
   Pay by the 15th

   For income received the month before.

4. 04
   Report by the 20th

   Through e-Bupot in Coretax.

5. 05
   Keep every slip

   Your home tax office will want them for the credit.

Source: PMK 81/2024, Article 94; DDTC, May 6, 2024; Law on General Tax Provisions (KUP), Articles 7 and 9

Booking platforms don't collect PBJT or income tax for Indonesian hosts. Airbnb's page on responsible hosting in Indonesia says the host registers for a regional tax number (NPWPD) and pays PBJT to the regency each month. Airbnb does charge VAT on its own service fee, at an effective 11% since January 2025.

A single villa is nowhere near the Rp 4,800,000,000 turnover that obliges you to register for VAT, and accommodation under PBJT is outside VAT anyway. The threshold matters to a management company running a portfolio. The government has floated lowering it, but no regulation has changed it yet.

Source: Airbnb, Responsible hosting in Indonesia; Airbnb Indonesia tax guide, 2024; PMK 131/2024; PMK 81/2024

Take a two-bedroom villa in Canggu grossing Rp 900,000,000 a year from guests, net of PBJT. A non-resident owner loses Rp 180,000,000 of that to PPh 26 before paying management, platforms, staff or repairs. On a villa priced at Rp 5,000,000,000, that one line costs 3.6 points of gross yield.

When we rebuild a developer's yield model, two lines are missing most often: the regional tax and the non-resident rate. Our rental yield guide shows the full path from gross to net, and the property tax guide covers purchase, ownership and sale.

To see what a villa returns after tax for you, pick one from the catalog or compare areas. We'll run the numbers at your residency status before you commit.

Source: Our calculation, an illustrative villa at Rp 5 bn with Rp 900 mn gross revenue

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