Rental Property Income Tax Rumours for 2027, DGT: Not a New Tax

JAKARTA, DDTCNews - The issue of income tax on rental properties has remained a topic of public interest this week. The Directorate General of Taxes (DGT) affirms that the tax is not a new type of tax to be imposed in 2027.

Dian Anggraeni, a Senior Tax Instructor at the Central Jakarta DGT Regional Office, stated that income from the rent of land and/or buildings has been subject to final income tax under Government Regulation (Gov. Reg.) 34/2017, which has been in force since 2 January 2018.

"When we talk about tax on rental properties, it is nothing new. It has been in effect since 2018, regulated under Gov. Reg. 34/2017. Income from the rent of land and/or buildings is subject to final income tax," she claimed.

Dian confirmed that there is no special programme at the DGT to pursue rental property owners in 2027. Nevertheless, income derived from the rent of land and/or buildings has long been an income tax object.

Pursuant to Article 4 of Gov. Reg. 34/2017, income from the rent of land and/or buildings is subject to final income tax at a rate of 10% of the gross amount of the rent value. The gross amount of the rent value comprises the entire sum paid or recognised as a liability by the tenant.

That sum also includes maintenance, upkeep, security, service and other facilities costs, whether the agreement for these is entered into separately or consolidated with the rent agreement.

Given that income tax is levied on the gross amount and is final in nature, Dian added, costs incurred by the owner (for example, maintenance costs and land and building tax) cannot be deducted from the tax base.

Further, income from accommodation services together with their lodging facilities is excluded from the imposition of final income tax on the rent of land and/or buildings pursuant to Gov. Reg. 34/2017. This exclusion applies to, among others, hotels, lodging houses, dormitories and boarding houses.

Dian emphasised that the exclusion of boarding houses from the final income tax on the rent of land and/or buildings is not related to the imposition of certain goods and services tax (pajak barang dan jasa tertentu/PBJT in Indonesian) by local governments.

In her view, income tax and the certain goods and services tax operate under different tax regimes. Income tax is imposed on income received or accrued by a taxpayer, whereas the certain goods and services tax is imposed on the consumption of certain goods and/or services and is charged to the consumer.

"They should not be conflated. Boarding houses are not subject to the 10% final income tax not because they are objects of the certain goods and services tax. They are not. When we discuss Gov. Reg. 34/2017, we are discussing income tax," she remarked.

Therefore, exclusion from the 10% final rental income tax does not imply that income from boarding houses is exempt from income tax. Such income remains an income tax object as per the taxation scheme applicable to business income.

Dian also advised rental property owners to re-inventory all their rental income sources. Owners also need to ensure that final income tax has been withheld by the tenant or remitted via self-remittance if the tenant is not a withholding agent.

Should they receive a letter of inquiry (surat permintaan penjelasan atas data dan/atau keterangan/SP2DK in Indonesian), taxpayers may provide an explanation according to the actual conditions. The SP2DK is, in principle, a request for clarification regarding data held by the DGT.

Besides the tax on rental properties, several other tax issues also sparked public interest over the past week. These included projections for tax expenditures in 2027 and the possibility for online ride-hailing drivers to use the final income tax regime.

Here is a full review of the tax-related articles.

Ride-Hailing Drivers Eligible for 0.5% MSME Final Income Tax

The DGT has confirmed that online ride-hailing drivers may use the micro, small and medium enterprise (MSME) final income tax scheme at a rate of 0.5% as stipulated under Government Regulation (Gov. Reg.) 20/2026

DGT Director of Tax Dissemination, Service and Public Relations, Inge Diana Rismawanti, explained that the 0.5% final income tax is levied on the gross turnover earned by ride-hailing drivers. The fraction of gross turnover up to IDR500 million within a single tax year is not subject to income tax.

"Drivers may use the 0.5% final income tax scheme calculated on their turnover, provided they satisfy the applicable requirements," she said.

DGT: Taxpayer Attorneys Must Maintain Integrity

The DGT has affirmed that attorneys acting on behalf of taxpayers must maintain their integrity whilst exercising rights and/or fulfilling tax obligations. The requirements and procedures for taxpayer attorneys are now stipulated under MoF Reg. 44/2026.

Senior Expert Tax Instructor of the Directorate of Tax Dissemination, Service and Public Relations of the DGT, Eddy Triyono, cautioned that an attorney must not commit violations or even fraud and thereby face penalties. Penalties that may be imposed include the suspension or revocation of a tax consultant licence or a certificate of registration (surat keterangan terdaftar/SKT in Indonesian) for other parties.

"They [the attorneys] must maintain integrity. Because if there is fraud in the fulfilment of obligations and the exercise of rights, the certificate of registration may be suspended or revoked," he remarked.

Exchangers Must Now Request Self-Certification from Crypto Asset Users

The DGT has made it mandatory for crypto-asset reporting framework (CARF) reporting crypto asset service providers (penyedia jasa aset kripto/PJAK in Indonesian) to request a valid self-certification from crypto asset users.

This obligation constitutes part of the implementation of procedures for the identification of financial accounts (due diligence) pursuant to CARF provisions governed by MoF Reg. 108/2025.

"A CARF Reporting PJAK is required to: submit reports on financial account information automatically in the form of relevant crypto-asset information; and implement procedures for the identification of financial accounts (due diligence) pursuant to the provisions on the CARF," the DGT stated in Announcement No. PENG-5/PJ/2026.

Government Targets Tax Ratio of up to 12.45% by 2030

The government is seeking to keep tax buoyancy above 1 to raise the tax ratio gradually. According to the government, a tax buoyancy above 1 is an indication of the effectiveness of the tax system in collecting tax revenues from economic growth.

"Tax revenues are sought to have an elasticity (tax buoyancy) above 1 as an indicator of the increasing effectiveness of the tax system in capturing economic growth as state revenues," the government stated in the financial note of the draft state budget (rancangan anggaran penerimaan dan belanja negara/RAPBN in Indonesian) 2027

With tax buoyancy above 1, the tax ratio is expected to rise gradually and reach between 10.97% and 12.45% of GDP by 2030.

2027 Tax Expenditure Projected at IDR632 Trillion

Tax expenditure next year is projected to reach IDR632 trillion, rising by 9.6% compared with this year's projected tax expenditure of IDR576.4 trillion.

Tax expenditure itself arises from tax revenue foregone due to deviations from general tax provisions.

The development of tax expenditure values reflects the dynamics of national economic activity as well as the utilisation of various tax facilities provided by the government. Further, the development of tax expenditure is also influenced by changes in the tax base, the direction of tax policy as well as the level of uptake of incentives by the public and entrepreneurs.

DGT: Stamp Forgery Causes Loss to the State and Public

The DGT and the Jakarta Metropolitan Regional Police (Polda Metro Jaya) have uncovered a network producing and distributing illegal stamps in DKI Jakarta, West Java, Central Java, East Java and North Sumatra. This network of producers and distributors of illegal stamps, comprising counterfeit or used stamps, was exposed following a joint investigation implemented from 24 June to 2 July 2026.

"The act of counterfeiting or misusing stamps not only causes a loss to state revenues, but also harms the public, because documents bearing illegal stamps will affect the legal certainty of those documents. Documents on which stamp duty has not been paid or has been underpaid cannot be used as evidence in litigation before the courts," said Director General of Taxes, Bimo Wijayanto.

This syndicate is known to have sold 4 million counterfeit stamps. This activity has caused a loss to state revenues valued at IDR40 billion. (dik)