Purbaya Confirms No Directive to Collect Tax on Rental Properties

Minister of Finance Purbaya Yudhi Sadewa has confirmed there is no specific directive to pursue tax collection on house rentals or boarding houses. He stressed that all tax policies related to this matter are carried out in accordance with existing regulations and do not constitute a new tax being imposed. “There is no specific plan for us to go after boarding houses. It is business as usual, but normally if there is income, you pay tax,” he said at the Ministry of Finance office on Wednesday. Purbaya emphasised there was no special order to collect tax on rental properties. “Are we going to chase after boarding houses? There is no such order. So, it is not a new tax and it is business as usual,” Purbaya stressed.

The issue went viral following a narrative circulating on social media quoting the Director of Budget Formulation at the Directorate General of Budget, Rofyanto Kurniawan, during a Public Communication Forum on the 2027 State Budget Bill. In the forum, Rofyanto stated that the government was formulating a strategy to increase state revenue without raising tax rates. “If someone has more than one house, it is impossible for them to live in all of them. Surely some are rented out or leased,” Rofyanto said.

However, the Directorate General of Taxes has affirmed that the imposition of tax on property rental income is not a new type of tax to be introduced in 2027. The Director of Tax Dissemination, Services, and Public Relations, Inge Diana Rismawanti, stated that income from the rental of land and/or buildings has essentially been a tax object subject to Income Tax in accordance with applicable tax provisions. Inge explained that one of the general policy directions for taxation is to strengthen the tax base and improve compliance with existing tax obligations. In this context, income from property rentals was merely an example presented in the forum. “We need to clarify that income from the rental of land and/or buildings has essentially been a tax object subject to Income Tax in accordance with applicable provisions. Therefore, this is not the imposition of a new type of tax,” she said. The formulation of the Directorate General of Taxes’ 2027 work plan is carried out by considering various aspects, including work programme implementation parameters, risk analysis, system readiness, and economic and societal conditions. Inge explained that to date, there is no specific work programme proposal for 2027 that specifically targets owners of boarding houses or rental properties.