Bali Property Tax for Foreigners: The Definitive Guide

Last updated: February 2026 · By Bali Property Rules Research Desk

Table of Contents

1. Why Every Bali Tax Guide Gives You a Different Number
2. Your Property Tax Rate Matrix
3. Rental Income Tax — The 10% vs 20% Question
4. Property Transfer Taxes: What You Pay When Buying or Selling
5. Annual Property Tax (PBB) Explained
6. VAT on Property — When It Applies (And When It Doesn’t)
7. Double Tax Agreements — What They Actually Cover (And Don’t)
8. Frequently Asked Questions
9. Sources and References

Search for “Bali property tax” and you will find 10%, 20%, 11%, 5–35%, and 2.5% — often for the same question. They are all correct. They are all incomplete. Here is why every guide gives you a different number, and which rate actually applies to your situation.

The confusion exists because “property tax” in Bali encompasses at least six distinct taxes, and the rate that applies depends on three variables: your tax residency status (the 183-day rule), your ownership structure (individual vs PT PMA), and your annual revenue. This guide maps every tax, cites the specific regulation, and shows you exactly which rate applies to you.

Why Does Every Bali Tax Guide Give You a Different Number?

The reason existing tax guides contradict each other is simple: the phrase “rental tax” in Bali actually refers to at least five completely different taxes, and which one applies depends on your residency, ownership structure, and revenue. No single rate is universally correct.

Here are the five taxes that English-language guides routinely conflate under “rental tax”:

1. PPh Pasal 4 ayat (2) — 10% final tax on land and building rental income for Indonesian tax residents, governed by PP 34/2017.
2. PPh Pasal 26 — 20% withholding tax on income earned by non-residents, governed by UU 36/2008.
3. PPh Pasal 21 — progressive income tax at 5–35% for employment and business income. This does not apply to land and building rental — but some guides incorrectly apply it to rental income.
4. PPN (VAT) — 11% effective rate on property services, but only from entities registered as Pengusaha Kena Pajak (PKP) with annual revenue exceeding IDR 4.8 billion, governed by UU 7/2021.
5. PPh on lease transfer — 10% with NPWP / 20% without, on selling or transferring a lease. This is distinct from ongoing rental income.

Three variables determine which rate applies to you:

• Tax residency: Are you present in Indonesia for 183 days or more in any 12-month period? This single test determines whether you pay 10% or 20% on rental income.
• Ownership structure: Are you holding property as an individual, or through a PT PMA? A PT PMA pays 10% at the entity level, but dividend distribution to foreign shareholders triggers additional withholding.
• Revenue threshold: Does your total annual revenue exceed IDR 4.8 billion (~USD 300,000)? Only then does VAT apply.

What Is Your Property Tax Rate in Bali?

If a guide tells you “the tax rate is X%” without specifying your residency status, ownership structure, and revenue threshold — it is giving you an incomplete answer.

The table below maps every property-related tax in Bali by ownership structure, with regulation citations for each rate. This is the single reference you need to determine your total tax exposure — no other English-language source presents this complete picture.

The 183-day rule: If you are present in Indonesia for 183 days or more in any 12-month period, you are a tax resident. This single test determines whether you pay 10% or 20% on rental income.

PT PMA dividend layer: If your PT PMA earns rental income, the company pays 10% PPh 4(2) at the entity level. When profits are distributed as dividends to you (the foreign shareholder), an additional withholding tax applies — 20% standard, or a reduced rate under a Double Tax Agreement.

Rental Income Tax — Is It 10% or 20%?

The tax on rental income from Bali property is either 10% or 20% of gross rental income — and the determining factor is a single test: whether you have been present in Indonesia for 183 days or more in any 12-month period. These are two entirely different taxes under two different regulations.

Tax Residents: 10% Final Tax (PPh Pasal 4 Ayat 2)

If you qualify as an Indonesian tax resident, rental income from land and/or buildings is subject to Pajak Penghasilan Final atas Sewa Tanah dan/atau Bangunan (Final Income Tax on Land and/or Building Rental) at a flat 10% of gross rental income.

• Legal basis: PP 34/2017, Pasal 4 ayat (1), authorised under UU 36/2008 Pasal 4 ayat (2).
• Scope: Rental of land and/or buildings, whole or partial (PP 34/2017 Pasal 2 ayat (1)). “Gross rental income” includes all amounts received: rent, maintenance charges, security fees, service charges, and facility charges.
• BOT income: Income received by a landowner under a Build-Operate-Transfer (Bangun Guna Serah) arrangement is also included (PP 34/2017 Pasal 2 ayat (2)).
• Exclusion: Lodging services such as student dormitories and employer-provided housing are excluded.
• This is a “final” tax: It is not subject to further progressive income tax. The 5–35% progressive rates under PPh 21 apply to employment and business income — not to land and building rental income.

This same 10% rate applies to both individual taxpayers and corporate taxpayers (including PT PMA entities). The rate is unified regardless of structure.

Non-Residents: 20% Withholding Tax (PPh Pasal 26)

If you are not an Indonesian tax resident — meaning you are present in Indonesia for fewer than 183 days in any 12-month period — your rental income is instead subject to Pajak Penghasilan Pasal 26 (Income Tax Article 26) at 20% of gross income with no deductions allowed.

• Legal basis: UU 36/2008, Pasal 26 (as amended by UU 7/2021).
• Scope: PPh 26 applies broadly to dividends, interest, royalties, service fees, rental income, prizes, and pensions received by non-residents.
• Reduction: A reduced rate may be available under a Double Tax Agreement (Perjanjian Penghindaran Pajak Berganda / P3B), but only if the taxpayer provides a valid Certificate of Domicile (Form DGT-1) certified by their home country’s tax authority.
• Without DGT-1: The standard 20% rate applies regardless of whether your home country has a DTA with Indonesia.

Who withholds? If the tenant is a business or organisation, they withhold and remit the tax. If the tenant is an individual, the property owner self-reports. Payment is due by the 10th of the following month.

What Do You Pay in Property Transfer Taxes When Buying or Selling?

Property transfers in Bali trigger two separate taxes: the buyer pays BPHTB (up to 5% of the transaction value), and the seller pays PPh on the transfer (2.5% of the gross transfer value). Both must be settled before the notary signs the deed of transfer.

Buyer: BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan)

Bea Perolehan Hak atas Tanah dan Bangunan (Duty on Acquisition of Land and Building Rights) is the transfer tax paid by the buyer or acquirer of property rights.

• Maximum rate: 5% — set by UU 1/2022, Pasal 47 ayat (2), which states “paling tinggi 5%” (at most 5%). The actual rate is determined by local government regulation (Peraturan Daerah / Perda).
• Tax base: NPOP (Nilai Perolehan Objek Pajak) — the transaction value or the government-assessed value, whichever is greater.
• Deduction: NPOPTKP (Nilai Perolehan Objek Pajak Tidak Kena Pajak) — a non-taxable threshold of at least IDR 80 million (~USD 5,000) for a first acquisition (UU 1/2022 Pasal 46 ayat (5)).
• Formula: BPHTB = Rate x (NPOP – NPOPTKP)
• Who pays: The buyer / acquirer (UU 1/2022 Pasal 45 ayat (2)).
• Timing: Must be paid before the notary signs the deed of transfer.

In practice, most regions apply 5%, but the legal basis is “maximum” — not “fixed.” Verify the applicable rate with the local tax office.

Seller: PPh on Property Transfer

Pajak Penghasilan atas Pengalihan Hak atas Tanah dan/atau Bangunan (Income Tax on Transfer of Land and/or Building Rights) is the tax paid by the seller.

• Rate: 2.5% of the gross transfer value (or government-determined value, whichever is greater).
• Legal basis: PP 34/2016, Pasal 2.
• Tax article: PPh Pasal 4 ayat (2) — this is a final tax.
• Who pays: The seller / transferor.

Worked Example: Villa Purchase at IDR 5 Billion

Consider a property transaction valued at IDR 5 billion (~USD 312,500 at IDR 16,000/USD):

BPHTB (buyer):

• BPHTB = 5% x (IDR 5,000,000,000 – IDR 80,000,000)
• BPHTB = 5% x IDR 4,920,000,000
• BPHTB = IDR 246,000,000 (~USD 15,375)

Seller PPh:

• PPh = 2.5% x IDR 5,000,000,000
• PPh = IDR 125,000,000 (~USD 7,813)

For a comprehensive breakdown of all acquisition costs beyond taxes, see the property costs for foreigners guide. Before committing to a purchase, the due diligence checklist covers the legal verification steps that should precede any transaction.

How Does Annual Property Tax (PBB) Work in Bali?

Every property owner in Bali — Indonesian or foreign — pays Pajak Bumi dan Bangunan Perdesaan dan Perkotaan (PBB-P2), an annual land and building tax. The maximum rate is 0.5% of the assessed taxable value, but actual rates are set by each regency’s local government regulation.

Since UU 1/2022 (the HKPD Law), PBB-P2 is classified as a regional tax (pajak daerah). This means rates and assessed values are set by local government (Pemerintah Daerah), and Bali’s regencies — Badung, Gianyar, Tabanan, Karangasem, and others — may each apply different rates.

The base rules for PBB are established by UU 12/1994 (amending UU 12/1985). Key terms:

• NJOP (Nilai Jual Objek Pajak) — the government-assessed property value, set by local government (UU 12/1985 Pasal 6).
• NJKP (Nilai Jual Kena Pajak) — the taxable sale value. This ranges from 20% to 100% of NJOP, depending on the property value and local rules.
• Non-taxable NJOP: A minimum of IDR 10 million (~USD 625) is deducted before the tax calculation.
• Maximum rate: 0.5% (under UU 1/2022).

Formula: PBB = Tax Rate x (NJKP percentage x (NJOP – non-taxable NJOP))

Worked Example: Villa with NJOP of IDR 3 Billion

Assume a villa in Bali with a government-assessed value (NJOP) of IDR 3 billion (~USD 187,500), a NJKP percentage of 40% (typical for higher-value properties), and the maximum 0.5% rate:

• Taxable base = 40% x (IDR 3,000,000,000 – IDR 10,000,000) = IDR 1,196,000,000
• PBB = 0.5% x IDR 1,196,000,000 = IDR 5,980,000 (~USD 374/year)

Payment is due within six months after the SPPT (Surat Pemberitahuan Pajak Terutang / tax notice) is issued by the local tax office.

When Does VAT Apply to Bali Property (And When Doesn’t It)?

VAT (Pajak Pertambahan Nilai / PPN) applies to property rental income only when the property owner or entity is registered as a PKP (Pengusaha Kena Pajak / Taxable Entrepreneur), which requires annual revenue exceeding IDR 4.8 billion (~USD 300,000). Most individual villa owners in Bali fall below this threshold.

Under UU 7/2021 (HPP), Pasal 7, the nominal VAT rate is 12%. However, the government implemented a DPP Nilai Lain mechanism (PMK-131) where the tax base equals 11/12 of the selling price, resulting in an effective rate of 11% for most goods and services. The full 12% effective rate applies only to certain luxury goods.

Key points about VAT and property in Bali:

• PKP threshold: Only businesses or individuals with annual revenue exceeding IDR 4.8 billion are required to register as PKP and charge VAT.
• Below threshold: If your total annual rental revenue is below IDR 4.8 billion, you are not required to register as PKP and VAT does not apply to your rental income.
• VAT stacking: When VAT does apply, it is additional to income tax. The tenant pays rent plus 11% PPN on top of the rental amount.
• Common misconception: Some guides state “11% VAT on rental income” as if it applies universally. It does not. The VAT obligation depends entirely on PKP registration status, which depends on the revenue threshold.

For short-term rental operators managing multiple villas through a PT PMA, the IDR 4.8 billion threshold may become relevant as the portfolio scales. Individual owners renting out a single villa are unlikely to reach it.

What Do Double Tax Agreements Actually Cover for Bali Property?

Indonesia has signed 71 Double Tax Agreements (Perjanjian Penghindaran Pajak Berganda / P3B), but these agreements typically do not reduce the tax on rental income from Bali property. Under Article 6 of most tax treaties, Indonesia retains full taxing rights on income from immovable property located in its territory.

This is one of the most misunderstood aspects of Bali property taxation. Many foreign investors assume that a DTA between Indonesia and their home country will reduce their Indonesian tax rate. For rental income from property, this is generally not the case.

What DTAs Do NOT Do for Property Rental Income

Under Article 6 of most tax treaties (based on the OECD Model), income from immovable property (including rental income) “may be taxed in the Contracting State in which such property is situated.” In practice, this means Indonesia retains full authority to tax rental income from Bali property at its domestic rates — 10% for residents or 20% for non-residents.

What DTAs DO Help With

• Avoiding double taxation: DTAs provide credit or exemption methods so you do not pay full tax on the same rental income in both Indonesia and your home country. Your home country must allow a credit for the Indonesian tax paid, or exempt the income entirely.
• Reduced rates on dividends and interest: If rental income flows through a corporate structure (PT PMA), DTAs can reduce the withholding tax rate when profits are distributed as dividends to foreign shareholders.

How to Claim DTA Benefits

To access any DTA benefit, a non-resident must provide a Certificate of Domicile (Form DGT-1), certified by their home country’s tax authority. This certificate is valid for one year and must be renewed annually. Without a valid DGT-1, the standard 20% withholding rate applies regardless of whether your country has a DTA with Indonesia.

The DGT official page provides the full list of treaty rates. Key DTA rates for countries with significant Bali property investment:

These rates apply to dividends, interest, and royalties — not to rental income from immovable property. For rental income, Indonesia’s domestic rates apply in full.

Frequently Asked Questions

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