balivillacareLong-term letting against nightly
Key takeaways
- A let of more than one month is not an object of the regional accommodation tax under the explanatory memorandum to Pasal 54 of UU No. 1 Tahun 2022.
- A long let also sheds platform commission, most housekeeping and laundry, and most of the management intensity — so the gross gap overstates the net gap substantially.
- Final income tax at 10% of gross rent applies either way. It is the one line that does not move.
- Six or twelve months paid up front changes the working capital position, which is worth real money and never appears in a yield comparison.
The comparison everyone makes is gross against gross, and it is the wrong comparison by a wide margin.
How to read the numbers on this page. A figure with no marker is quoted from a primary source and linked at the foot of the page. reported means the company that charges it publishes no public rate card, so the range comes from trade reporting rather than from the charging party. modelled means it came out of the model set out on the methodology page, which you can disagree with line by line.
What changes, and what does not
Three of the six deductions in a nightly villa's fee stack either disappear or shrink dramatically on a long let. One does not move at all.
| Nightly | Let for more than one month | |
|---|---|---|
| Regional accommodation tax | Up to 10% of what the guest pays | Not an object of the tax |
| Platform commission | 14.2%modelled blended across the channel mix | Usually none — long lets are found locally, not on a booking platform |
| Housekeeping and laundry | Between every stay, plus mid-stay service | Usually the tenant’s own arrangement |
| Management intensity | A calendar, check-ins, guest communication, dynamic pricing | A tenant, a deposit, and maintenance |
| Utilities | Yours, and consumed hard by guests who are not paying for them | Usually the tenant’s, metered |
| Final income tax on rent | 10% of gross | 10% of gross — unchanged |
| Payment timing | In arrears, after each stay | Commonly six or twelve months up front |
The two walks, side by side
Here is a villa grossing USD 6,000 a month on a nightly calendar, against the same villa on a long let at USD 3,100 a month — roughly half the gross, which is a realistic shape for the trade even though the specific figures are modelled rather than measured.
| Line | Amount |
|---|---|
| What the guest pays | USD 6,000 |
| Accommodation tax (PBJT)Charged on what the guest pays. Not applicable to a let of more than one month. | −USD 600 |
| Booking revenue | USD 5,400 |
| Platform commissionWeighted across the channel mix at 14.2%. | −USD 768 |
| Management commission20% of booking revenue — charged on the booking, not on what is left after the platform. | −USD 1,080 |
| Channel manager and payment processing | −USD 108 |
| Housekeeping, laundry and grounds | −USD 540 |
| Markup on services bought for youZero if the contract says these are rebilled at cost. | −USD 54 |
| Transfer from the managerWhat lands in your account. Everything below this line happens outside their statement. | USD 2,850 |
| Utilities, repairs and replacement | −USD 378 |
| Final income tax on the rent10% of the gross rent, not of the profit. | −USD 540 |
| Reaches the owner | USD 1,932 |
| Share of the guest’s money that does not | 68% |
| Line | Amount |
|---|---|
| What the tenant pays | USD 3,100 |
| Management commission8% of booking revenue — charged on the booking, not on what is left after the platform. | −USD 248 |
| Channel manager and payment processing | −USD 62 |
| Housekeeping, laundry and grounds | −USD 310 |
| Markup on services bought for youZero if the contract says these are rebilled at cost. | −USD 31 |
| Transfer from the managerWhat lands in your account. Everything below this line happens outside their statement. | USD 2,449 |
| Utilities, repairs and replacement | −USD 217 |
| Final income tax on the rent10% of the gross rent, not of the profit. | −USD 310 |
| Reaches the owner | USD 1,922 |
| Share of the guest’s money that does not | 38% |
The gross gap is USD 2,900 a month. The net gap is USD 10. That is the finding. Halving the revenue does not halve the income, because most of what the extra revenue cost you disappears with it.
Two things that walk does not price, both of which favor the long let. The payment comes up front rather than in arrears, which is worth a real amount of working capital on an annual basis. And the owner's own attention — the messages, the escalations, the decisions — goes to near zero, which does not appear on any statement and is often the actual reason owners change models.
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Where the long let is worse
This page is not an argument for long letting, and the honest case against it is substantial:
- Concentration risk. One tenant rather than a hundred guests. If they leave or stop paying, occupancy goes to zero rather than to average.
- Wear without turnover. Nobody inspects the villa between guests, because there are no guests. Problems compound for months instead of being caught on Tuesday.
- No upside. A nightly calendar captures a strong season. A twelve-month lease signed in April does not.
- It is a different market to reach. Long-term tenants in Bali are found through local networks and listing sites, not through the platforms your manager is good at.
- Exit friction. A villa you want to sell, refurbish or move back into is easier to free up from a calendar than from a lease.
Which villas this actually suits
The nightly model is strongest where rate and occupancy are both strong, which in practice means close to the beach, close to the restaurants, in the bedroom counts the couples and small-group market wants. Those villas should stay nightly.
The long let gets interesting where nightly economics are weak for structural reasons: a location that needs a scooter for everything, a bedroom count that is awkward for groups, an area absorbing a lot of new supply, or a villa whose owner has found that the management relationship costs more attention than the margin justifies. A villa booking thirty-five per cent of nights at a soft rate is not a villa with a marketing problem, it is often a villa in the wrong model.
If that sounds like yours, the number to work out is not the gross, it is the net — and it is not the number your manager is incentivised to work out for you, because the long let is the version of your villa that needs much less of what they sell. Run both through the estimator.
Common questions
Does a long-term let really avoid the accommodation tax?
The explanatory memorandum to Pasal 54 ayat (1) of UU No. 1 Tahun 2022 states that a private residence let as accommodation for more than one month is not an object of the tax on hotel services. That is the published position. How it applies to a particular arrangement — and what else changes when the character of the letting changes — is a question for an Indonesian adviser, not for a website.
Do I earn less on a long-term let?
In gross, almost always, and by a lot. In net, much less than the gross difference suggests, because a long let sheds the platform commission, the accommodation tax, most of the housekeeping and laundry, and most of the management intensity. The question is not which produces more revenue, it is which produces more money after everything the revenue costs you.
What is a normal long-term arrangement in Bali?
Six or twelve months paid up front is the market norm and it is a significant working-capital advantage over a nightly calendar that pays in arrears. It is also the reason the risk profile is different: you are underwriting one tenant rather than a hundred guests.
Which villas suit a long-term let?
Ones where the nightly economics are weakest: away from the beach, larger than the couples market wants, or in an area with heavy new supply. A villa that books seventy per cent of nights at a strong rate in Seminyak is not a long-let candidate; a four-bedroom in the Gianyar hinterland that books thirty-five per cent probably is.
Can I mix the two?
Yes, and it is common: nightly through the high season, one long let across the quiet months. It is also the arrangement most likely to produce a tax question, because the character of the letting changes during the year. Take advice before structuring it, not after.
Do I still need a management company for a long let?
Less of one, and that is most of the point. There is no calendar to run, no check-in, no daily housekeeping and no guest communication. What remains is finding the tenant, holding the deposit, handling maintenance and dealing with problems — which is a much smaller job and should carry a much smaller fee.
Sources cited on this page
- UU No. 1 Tahun 2022 (HKPD) — Pasal 54, Pasal 58 (PBJT)
- PP No. 34 Tahun 2017 — final tax on land and building rental
- PMK No. 131 Tahun 2024 — VAT base adjustment
- Perda Provinsi Bali No. 6 Tahun 2023 — foreign tourist levy
- Love Bali — provincial levy payment portal
Every figure above was read from the source it is attributed to on 20 September 2026. How we check this.