Frequently Asked Questions: #rental-income-tax-individual-villa

Rental of land and buildings in Indonesia is subject to a final tax of 10% of gross rental value (PPh Final under Article 4(2)). “Final” means exactly that: the 10% settles the income tax on the rent — it is not a provisional withholding to be reconciled later, and expenses are not deductible against it.

How it applies:

• Individuals and companies alike pay the same 10% final rate on land/building rental
• Where the tenant is a company or appointed withholder, the tenant withholds and remits the 10%; where the tenant is an individual, the landlord self-remits
• Non-residents letting Indonesian property face a 20% withholding on Indonesian-source income under Article 26, subject to any tax treaty

The questions behind the question, from client email:

• “I rent out villas on Airbnb as an individual — is 10% all I owe?” For the rental income itself, the 10% final tax is the income-tax answer — but short-term serviced accommodation is not merely “rental”: operated commercially it is a licensed business activity (with regional taxes on hotel-type accommodation potentially applying), and running it as an unlicensed individual raises licensing questions distinct from income tax. Regional taxes (PBB on the property; local accommodation taxes where applicable) sit on top
• “Must I register a local tax number before receiving rent?” An owner receiving Indonesian rental income needs the tax registrations appropriate to their status — resident individual, non-resident, or PT — before the flows begin, not after

The structural choice — holding property personally versus through a PT PMA — does not change the 10% on rent; it changes licensing, ownership rights and exit options. See our guide: Buying property in Indonesia through a PMA company.

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