Bali Villa Rental Tax 2026: PB1, PPh and What Owners Actually Pay

Bali villa rental tax in 2026 comes in two main layers: a regional hotel tax of up to 10% (PBJT, still widely called PB1) that guests pay and the owner remits, and income tax on what the owner earns, which for many small owners is a 0.5% final tax on gross turnover. A third rule, a 10% final tax on rent, applies to long-term leases rather than nightly stays.

This guide is written for owners, especially overseas ones, who want to know what number to expect before they look at a net yield. It is a map, not tax advice: Indonesian tax depends on how you hold the villa and whether you are a resident, so use it to ask better questions of your accountant. Licensing comes first, so if you have not sorted that, start with our NIB and TDUP compliance checklist.

The short version: three taxes, three different payers

Most confusion comes from mixing up who pays what. A guest's bill, the owner's income and a tenant's lease payment are three different tax events.

PBJT (PB1): the regional hotel tax

Under the 2022 law on central and regional financial relations (UU 1/2022, known as HKPD), the old hotel and restaurant tax became PBJT, tax on certain goods and services. As Ortax's PBJT overview explains, hotel services are taxed at a rate of up to 10% on the payment made to the provider. Reporting from DDTC News adds that the hotel-services category covers villas, guest houses and even private homes used as hotels, and that Badung officials have been looking at luxury houses rented to tourists that currently pay no local tax.

The practical reading for owners: if you rent a villa to guests by the night, assume the regency expects you to be registered, to collect PBJT on the guest bill, and to file monthly returns. We work on the full 10% as a planning assumption, but the exact rate is fixed by each regency's own regulation, so confirm it with the local revenue office (Bapenda) for Badung, Gianyar, Tabanan or wherever your villa sits.

Two points catch people out. First, PBJT is a tax on the guest, so it must be added on top of your rate or built clearly into it; absorbing it quietly reduces your margin by up to a tenth. Second, the platforms may not remit it for you in every case, so do not assume Airbnb or Booking.com has handled it. Our comparison of Airbnb vs Booking.com for Bali villas covers how each channel presents taxes and fees.

Pro Tip: Ask your local Bapenda office, in writing if you can, which rate applies to your villa and how they expect monthly returns to be filed. Rules differ by regency, and a saved email beats a verbal answer if the question ever comes back.

Income tax: the 0.5% final rate versus regular rates

Income tax is the owner's own obligation, and the right regime depends on who owns the villa. Two broad paths exist.

The 0.5% UMKM final rate

Small taxpayers can pay a final tax of 0.5% on gross turnover rather than on profit. According to Hukumonline's summary of PP 23/2018 as amended by PP 55/2022, the rate is open to domestic taxpayers whose gross turnover does not exceed Rp4.8 billion in a tax year, for a limited period: up to 7 years for individuals, 4 for partnerships and 3 for limited companies (PT). Individuals also benefit from an exempt slice of turnover; DDTC covers this in its note that small-business turnover under Rp500 million is not taxed.

Regular income tax

If you do not qualify, or the time limit has run out, income is taxed on net profit: expenses such as staff, maintenance, utilities and management fees are deducted first, and the result is taxed at the progressive rates for individuals or the corporate rate for a company. This takes more bookkeeping but can be cheaper for a heavily costed villa. Our guide to a Bali villa P&L shows the cost lines you would be deducting.

The 10% final tax on rent

A different rule applies when a villa is leased as property. As DDTC's explainer on land and building rental tax sets out, the final tax is 10% of the gross rental value, which includes related charges such as maintenance, security and cleaning. The tenant withholds, pays and reports it, and the landlord still declares the income in the annual return. This is the logic behind long-term leases to a single tenant, and it is a separate matter from nightly guest stays. Which regime your arrangement falls under depends on its structure, so get it confirmed rather than assuming.

A worked example (illustrative only)

Take a villa that books Rp1.2 billion of room revenue in a year, owned by an individual using the 0.5% regime. These are round numbers to show the mechanics, not a forecast.

The lesson is the gap between the two taxes: the PBJT looks big but is a pass-through you collect and hand over, while the final income tax on turnover is small. The risk is not the rate, it is forgetting to collect or remit the first one. If you want to see how tax fits into the bottom line, the cost of Bali villa management guide breaks down the other deductions.

Pro Tip: Keep PBJT in its own ledger line from day one. Owners who mix it into revenue overstate income, understate yield, and then struggle to reconstruct what they owe when the regency asks for back months.

Who owns the villa matters

The same villa can carry different tax treatment depending on whether it is held personally, through a local PT or through a foreign-owned PT PMA. Resident status, the structure and the turnover all change the answer, which is why the ownership question belongs next to the tax question. Our overview of the cost of setting up a PT PMA for a Bali villa and the villa rental licence guide for investors cover the structures and permits that sit underneath the tax.

What I've seen with owners and tax

The expensive tax mistakes I see are rarely about the rate. They are about timing and paperwork: a villa that has been renting for a year without registering for the regional tax, an owner who assumed the booking platform was remitting it, or a PT that quietly outgrew the 0.5% regime and kept filing as if it hadn't. Each one is fixable, but fixing it later costs more than getting it right in month one.

What works is dull. One person owns the tax calendar, the PBJT has its own ledger line, and the numbers go to an accountant every month rather than once a year in a panic. When I set that up with a new owner, the tax stops being a surprise and becomes a line in the P&L they can plan around.

— Francesco, Manta Villas

Key takeaways

How Manta Villas handles tax and reporting

We collect PBJT through the guest bill, keep it in a separate ledger and report it as part of the monthly owner statement, so your accountant gets clean numbers for your own return. See what is included in our villa management services, or message us on WhatsApp for a free revenue projection with taxes included.

FAQ

What taxes do Bali villa owners pay on rental income?

Two layers apply to most short-term villa rentals. The first is the regional hotel tax (PBJT, previously called PB1), which is charged to guests and remitted to the local government. The second is income tax (PPh) on the owner's earnings, which can be the 0.5% final rate on gross turnover for eligible small businesses or regular income tax rates. Long-term leases can fall under a separate 10% final tax on rent.

Is PB1 still the right name for villa tax in Bali?

People still say PB1, but under Law 1/2022 (UU HKPD) the regional tax on accommodation is now called PBJT, tax on certain goods and services, covering hotel services. The rate is capped at 10% by the law, and your regency sets the exact rate in its regional regulation.

Can I use the 0.5% final income tax rate for my villa?

Possibly. The 0.5% final rate applies to gross turnover of up to Rp4.8 billion in a tax year for eligible domestic taxpayers, for a limited number of years: up to 7 years for individuals, 4 for partnerships and 3 for limited companies. Your structure and registration date decide whether you still qualify, so confirm with a tax consultant.

Who pays the 10% tax when a villa is leased long term?

Under the rules on land and building rental, the final income tax is 10% of the gross rental value. The tenant withholds, pays and reports it on the landlord's behalf, and the landlord still declares the income in the annual tax return. Short-term guest stays are usually treated as an accommodation business instead, so the structure of your arrangement matters.

Does a villa manager handle tax for me?

A good manager collects and reports the regional tax correctly, keeps clean revenue records and gives your accountant the numbers. Your own annual income tax return and choice of tax regime remain your responsibility, ideally with a licensed Indonesian tax advisor.

Recommended reading

• NIB and TDUP for Bali Villas — the licences that come before tax.


• What a Bali Villa P&L Should Look Like — where tax sits in your costs.


• Bali Villa Management Cost — fees and deductions explained.


• PT PMA Cost for a Bali Villa — structure and ownership.