Guide · from Ask Dalam
Rental income tax for foreign villa owners in Bali (2026)
Short answer. Rent from a long-term lease of a building is taxed at a final 10% of the gross rent (PP 34/2017). The tenant withholds it if the tenant is a company, otherwise the owner pays it. Rent paid to a non-resident owner faces 20% withholding or a treaty rate. Nightly stays are a different regime.
Published Updated Data: Indonesian tax regulations, checked 30 September 2026By Maya Santoso
How is rent from a long-term lease taxed?
Rent from a lease of land or a building is subject to a final income tax of 10% of the gross rent under PP 34/2017, Article 2. "Final" means that is the tax on that income, with no further rate applied to it. "Gross" means the rent before any costs are deducted.
This is the regime our rental yield calculator uses for a long-term lease, and it is why we describe the yields in rental yield in Bali as before tax.
Who withholds and pays it?
PP 34/2017, Article 3, sets two cases:
| Who pays the rent | Who pays the 10% to the tax office |
|---|---|
| A withholding agent: a government body, a domestic company, a permanent establishment, an event organiser or another appointed payer | The tenant withholds it from the rent and pays it in |
| Anyone else, such as a private individual | The landlord pays it, by the 15th of the following month, per tax office practice |
If you rent your villa to a private person, expect to file and pay the 10% yourself. If you rent it to a company, check that the tenant withholds and gives you proof.
What changes if the owner is a non-resident?
Under the income tax law (UU PPh Art. 26(1)(c)), rent paid to a non-resident without a permanent establishment in Indonesia is subject to 20% withholding, or a lower rate if a tax treaty applies and you hold the required residency certificate.
Residence is a matter of days and intent. A person present in Indonesia for more than 183 days in any 12 months, or who intends to live there, is a resident for tax (Art. 2(3)). Which side of that line you are on decides whether the 10% final or the 20% withholding is the starting point. A tax adviser should confirm this for you, especially if the rent comes from a company tenant.
Can a foreigner get an NPWP?
Yes. Under PER-7/PJ/2025, a non-resident individual can register for a tax number (NPWP) with a passport and photos. A residence permit is not required. Some older tax office pages still list a KITAS or KITAP, and the 2025 rule is the one that applies. Your annual individual return (SPT) is due within three months of the tax year end, so by 31 March (UU KUP Art. 3(3)(a)).
What about nightly rentals?
Nightly rental income is not in the 10% regime. PP 34/2017, Article 2, excludes income from lodging services and their accommodation, and a nightly villa stay is a lodging service, not rent of a building. It falls under the normal income tax rules. A resident small business may use the 0.5% final regime for turnover up to Rp 4.8 billion (PP 55/2022). Which regime applies to you depends on your structure, so ask a tax adviser before you start.
Nightly stays also carry a regional tax on guests. The regional accommodation tax (PBJT) is 10% in Badung, Denpasar and Gianyar. In Badung it covers villas, pondok wisata, guest houses and private homes used as hotels. The guest is the person taxed, and the villa operator is the taxpayer who collects it and pays it to the regency. We have not verified the rates in the other Bali regencies, so check the local regulation before you assume 10% there.
What does this look like on a worked example?
An illustration, not a forecast. A long-term lease at Rp 300 million a year to a company tenant: the tenant withholds 10%, or Rp 30 million, and the owner receives Rp 270 million before any other cost. The owner keeps the withholding slip as proof. If the owner is a non-resident paid by a company, the withholding is 20% (Rp 60 million) unless a treaty rate applies.
What to put in your lease
Our rental contract and deposit guide covers the full lease. For tax, the lease should state:
- whether the stated rent is gross, with tax withheld from it, or net of tax
- who files and pays the 10%, and by when
- that the tenant gives the owner a withholding slip if the tenant withholds
- the owner's NPWP and the tenant's tax details
FAQ
Do foreigners pay tax on villa rent in Bali?
Yes. Rent from a long-term lease of a building is taxed at a final 10% of the gross rent, and rent paid to a non-resident owner is subject to 20% withholding or a treaty rate. Confirm which applies to you with a tax adviser.
Can I get an NPWP without a KITAS?
Yes. Since PER-7/PJ/2025, a non-resident individual can register with a passport and photos. A residence permit is not required.
Is nightly villa income taxed at 10%?
No. Nightly villa income is treated as an accommodation service, not rent, and is outside the 10% final regime in PP 34/2017. Guests also pay a 10% regional accommodation tax in Badung, Denpasar and Gianyar, collected by the operator. Ask a tax adviser which regime applies to you.
General information, not legal or tax advice. Checked 30 September 2026. Confirm your own tax treatment with a registered tax consultant.
How we measured
This guide has no data table. It uses the regulations named above, read in the official text or in a mirror of it, and checked on 30 September 2026. We quote only what the regulations say and avoid claims we could not verify. Tax rules change, so check the date of this guide and ask a registered tax consultant before you rely on it.