Letting a villa to tourists in Bali counts as a licensed business: it needs registration in the government OSS system with an NIB number, a plot in a suitable zone, a building permit and, according to consultants, an Indonesian company with foreign capital (PT PMA), because a foreigner cannot carry on such activity in their own name. The regional accommodation tax (PBJT) does not exceed 10% of the cost of the stay and is included in the price for the guest. Income is taxed separately, and the management company and online platforms take a share of the revenue, so net profit is noticeably lower than gross. This article explains the permits, the taxes and the structure of costs, with a calculation on a hypothetical example.
How to think about a villa's yield and how to calculate it is described in the article on making money from property investment in Bali. What right you hold to the land under the villa is covered in the article on leasehold in Bali.
Contents:
- Long-term and short-term lets: what is the difference
- Which permits are needed
- Taxes
- The management company
- What the costs consist of
- A worked example
- Who letting a villa does not suit
- What has changed in the rules
- Frequently asked questions
- Find property in Bali
Long-term and short-term lets: what is the difference
The rules depend on how you let the villa.
| Feature | Long-term let | Short-term let to tourists |
|---|---|---|
| Term | Six months or more | By the night or the week |
| What it is | A lease of property | An accommodation service, a tourism business |
| Licence | No tourism licence needed | An NIB and accommodation permits are needed |
| Accommodation tax (PBJT) | No | Yes, up to 10% |
| Income tax | A final tax of 10% on the rent | Business income tax |
The final tax of 10% on rent for land and buildings is set by Government Regulation No. 34 of 2017. Letting to tourists for short periods falls under hospitality services and business taxation, so the taxes and permits are different.
Which permits are needed
Consultants name the following sequence. The exact set of documents is determined by the type of activity and the risk level in the OSS system, so it should be confirmed with a notary or a licensed consultant.
| Document | What it confirms | Where it is obtained |
|---|---|---|
| A PT PMA company | A legal entity with foreign capital that carries on the activity | A notary and the OSS system |
| An NIB number | The business registration and the type of activity (for villas, consultants name the code KBLI 55193) | The OSS system |
| Zoning conformity (KKPR) | That the plot is in a zone where accommodating tourists is permitted | The OSS system and the local administration |
| Building permit (PBG) and certificate of functionality (SLF) | That the building was built with a permit and is fit for use | The SIMBG portal |
| Registration as a regional taxpayer (NPWPD) | The right to collect and pay the accommodation tax | The regional tax office (Bapenda) |
| Standards certificate | That the business meets safety, health and environmental standards | An accredited certification body |
The rules for certifying tourism businesses are set by Tourism Minister's Regulation No. 6 of 2025. It replaced Regulation No. 4 of 2021 and determines whether a standards certificate is needed according to the risk level of the activity in the OSS system. The risk level for villas is stated differently in different sources, so check it in OSS.
Consultants warn about arrangements where permits are issued in the name of an Indonesian citizen (so-called nominee arrangements). Such arrangements are described as unlawful and risky.
Taxes
| Tax | Rate | Who pays | Basis |
|---|---|---|---|
| Accommodation tax (PBJT) | Up to 10% | The guest pays it as part of the price, and the operator remits it | Law No. 1 of 2022 on financial relations between the centre and the regions |
| Final tax for small businesses | 0.5% of turnover | An individual or a PT Perorangan with turnover up to IDR 4.8 billion a year | Government Regulation No. 55 of 2022 as amended by No. 20 of 2026 |
| Corporate profit tax | 22% | A company that is not entitled to the small-business relief | The law on income tax |
| Land and building tax (PBB-P2) | No more than 0.5% of the property's assessed value (NJOP) | The owner | Law No. 1 of 2022 |
What is important to know about the taxes:
- the PBJT rate is set by each region, and the law only sets a ceiling of 10%, so check the rate with the regional tax office;
- the 0.5% relief applies to turnover up to IDR 4.8 billion a year. Since 22 April 2026, Regulation No. 20 of 2026 has kept it for individuals and for "PT Perorangan" with no time limit, while ordinary PTs, according to reports, have lost it, with a transitional period;
- according to tax consultants, if turnover exceeds IDR 4.8 billion a year, you have to register as a value-added tax payer (PKP);
- a foreign owner who does not live in Indonesia pays tax under the rules for non-residents, which should be confirmed with a tax consultant.
The management company
If the owner does not live in Bali, the villa is usually handed to a management company. It handles bookings, cleaning, repairs, dealings with guests and taxes. For this, the company takes a share of the revenue, and may pass part of the villa's costs on to the owner.
What to set out in the contract with a management company:
- The size of the fee and the sum it is calculated on: revenue before or after platform commissions.
- What the fee includes and what the owner pays for separately: cleaning, the pool, the garden, repairs, consumables.
- The procedure and timing of payments to the owner, and the format of the report on each booking.
- Who pays the accommodation tax and who files the returns.
- A limit on the costs that the company may incur without the owner's approval.
- The terms for ending the contract and handing over the keys, guest data and platform accounts.
- Who is responsible for the villa having all its permits.
Each 10% of the management company's fee on annual revenue of $40,000 is $4,000 a year. So the fee is compared as an absolute sum, not only as a percentage.
"The owner looks at the percentage of the fee, but what matters is the sum it is calculated on. If the percentage is taken on revenue before the platform's commission is deducted, the management company's actual share is higher," says a villa manager in Bali.
What the costs consist of
| Item | Who pays | How it is calculated |
|---|---|---|
| The booking platform's commission | The owner | A percentage of each booking |
| The management company's fee | The owner | A percentage of revenue |
| Accommodation tax (PBJT) | The guest | Included in the price, up to 10% |
| Income tax | The owner or the company | At a rate that depends on the form of business and turnover |
| Land and building tax (PBB-P2) | The owner | Up to 0.5% of NJOP a year |
| Utilities | The owner | Electricity, water and internet by meter |
| Pool, garden, cleaning | The owner | Monthly, under the contract |
| Repairs and replacing furniture | The owner | A reserve for wear |
| Accounting and running the PT PMA company | The owner | Annually, under the contract |
A worked example
A villa brings in $50,000 of gross revenue a year. Suppose the platform takes 15% of bookings, the management company 25% of revenue, utilities, pool, garden and cleaning come to $6,000, repairs and furniture wear to $3,000, and accounting and fees to $2,000.
| Item | Amount |
|---|---|
| Gross revenue | $50,000 |
| Platform commission (15%) | −$7,500 |
| Management company (25%) | −$12,500 |
| Utilities, pool, garden, cleaning | −$6,000 |
| Repairs and furniture wear | −$3,000 |
| Accounting and fees | −$2,000 |
| Profit before income tax | $19,000 |
Income tax depends on the form of business. For a company paying corporate profit tax of 22%, it comes to $4,180 on a profit of $19,000, leaving $14,820 net. The final tax of 0.5% of turnover ($250) is not available to everyone, as described in the section on taxes. Yield is calculated on the sum you paid for the villa and the land, not on revenue.
Who letting a villa does not suit
- Those who want to earn income without licences and taxes: platforms and the authorities check for permits.
- Those who plan to register the villa in the name of an Indonesian acquaintance: consultants call such arrangements risky.
- Those whose plot is in a zone where tourist accommodation is not permitted: check before buying.
- Those who expect steady occupancy all year round: revenue depends on the season.
- Those who are not ready to share revenue with a management company: if the owner is not on the island, you cannot do without one.
What has changed in the rules
- In 2025, Tourism Minister's Regulation No. 6 came out, replacing Regulation No. 4 of 2021 and setting the procedure for certifying tourism businesses.
- According to consultants, in 2025 Law No. 18 on tourism and Government Regulation No. 28 were adopted, changing the licensing procedure. Consultants also report that from 31 March 2026, online platforms must show only accommodation with a valid licence.
- On 22 April 2026, Regulation No. 20 was adopted, changing the terms of the 0.5% relief for small businesses: individuals can use it with no time limit.
Frequently asked questions
Can a foreigner let a villa to tourists in Bali?
According to consultants, a foreigner may not carry on such activity in their own name: it needs an Indonesian company with foreign capital (PT PMA), a licence and registration.
What tax is paid on short-term lets?
Accommodation tax of up to 10% is included in the price for the guest, and income is taxed under business rules. The region sets the rate of the accommodation tax.
How much does a management company take?
The size of the fee is set by the contract. Compare it as an absolute sum and look at what sum it is calculated on.
Is a licence needed for a long-term let?
A tourism licence is not needed, but the landlord pays a final tax of 10% on the rent.
What happens if you let a villa without permits?
According to consultants, platforms remove such listings, and the authorities may apply fines and suspend the activity.
Find property in Bali
If you are considering a villa to let, browse the listings in the Bali.Realestate catalogue. Before buying, check the plot's zone and the permits, and when calculating yield, allow for all the costs in the list above.