Government Clarifies No New Tax on Rental Properties, Existing Rules Apply

Finance Minister Purbaya Yudhi Sadewa has confirmed that the government has not issued any directive to impose a new tax on boarding houses or rental properties. Speaking at the Ministry of Finance in Jakarta on Wednesday (12/8/2026), he stated, “There is no such order to pursue tax on rental properties.” He explained that current taxation policy remains business as usual, and while income from property rentals is subject to Income Tax (PPh) under existing regulations, there is no new specific scheme being introduced to target landlords.

Echoing the minister’s remarks, Inge Diana Rismawanti, Director of Tax Dissemination, Services, and Public Relations at the Directorate General of Taxes, stated that there are currently no specific work programmes proposed for 2027 aimed at rental property owners. She clarified that the issue arose from a Public Communication Forum regarding the 2027 State Budget Bill, where rental income was merely cited as an example of an existing tax object. Income from land and building rentals has long been subject to PPh under current provisions, and its collection is part of ongoing tax compliance, not a new tax imposition. The government hopes these clarifications will alleviate public concern regarding the rumoured rental tax.