Medan Property Investment: 20-Year Return Analysis
Last updated: July 6, 2026 · Written by the ASEAN Estates Investment Team
Full return calculation after management fees, maintenance, Indonesian rental income tax and capital gains tax on sale
Based on a $125,000 USD entry — Medan, North Sumatra — Hak Pakai title
Illustrative analysis only. Not financial advice. Growth rates are not guaranteed and past performance does not predict future returns. Indonesian tax rules may change. All figures are in USD at approximate exchange rates. Consult a licensed financial advisor and Indonesian notary (PPAT) before making any investment decision.
Interactive ROI Calculator
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Your Investment Parameters
Return Breakdown
Year-by-Year Projection
| Year | Property Value | Gross Rent | Net Rent | Cumul. Net Rent |
|---|
Illustrative only. Not financial advice. Past performance does not guarantee future returns. Consult a licensed financial advisor before investing.
Investment assumptions
Fixed inputs used across all calculations on this page
| Purchase price | $125,000 USD | Property management fee | 10% of gross rent |
| Annual capital growth | 5.0% per year | Maintenance & upkeep | 5% of gross rent |
| Gross rental yield (year 1) | 6.0% → $7,500/yr | Rental income tax (PPh Final) | 10% of gross rent |
| Annual rent inflation | 3.0% per year | Total rental deductions | 25% of gross rent |
| Hold period | 20 years | Sale disposal tax (PPh) | 2.5% of selling price |
20-Year Outcome Summary
After all fees, taxes and expenses — what an investor actually receives
Where Gross Rental Income Goes Each Year
Year 1: $7,500 gross rent split across four uses. The same percentages apply every year.
Property value & cumulative net income
Year-by-year growth over the 20-year hold period
Annual gross rent breakdown
Stacked view showing how gross rent is allocated each year as rent grows with inflation
Year-by-year breakdown
All figures in USD. Rent grows 3% per year with inflation. Property value grows 5% per year.
| Year | Property value | Gross rent | Tax (10%) | Mgmt (10%) | Maint (5%) | Net rent | Cumul. net rent |
|---|---|---|---|---|---|---|---|
| Year 1 | $131,250 | $7,500 | $750 | $750 | $375 | $5,625 | $5,625 |
| Year 2 | $137,813 | $7,725 | $773 | $773 | $386 | $5,794 | $11,419 |
| Year 3 | $144,703 | $7,957 | $796 | $796 | $398 | $5,968 | $17,387 |
| Year 4 | $151,938 | $8,195 | $820 | $820 | $410 | $6,147 | $23,534 |
| Year 5 | $159,535 | $8,441 | $844 | $844 | $422 | $6,331 | $29,865 |
| Year 6 | $167,512 | $8,695 | $870 | $870 | $435 | $6,521 | $36,386 |
| Year 7 | $175,888 | $8,955 | $896 | $896 | $448 | $6,717 | $43,103 |
| Year 8 | $184,682 | $9,224 | $922 | $922 | $461 | $6,918 | $50,021 |
| Year 9 | $193,916 | $9,501 | $950 | $950 | $475 | $7,126 | $57,147 |
| Year 10 | $203,612 | $9,786 | $979 | $979 | $489 | $7,339 | $64,486 |
| Year 11 | $213,792 | $10,080 | $1,008 | $1,008 | $504 | $7,560 | $72,046 |
| Year 12 | $224,482 | $10,382 | $1,038 | $1,038 | $519 | $7,786 | $79,832 |
| Year 13 | $235,706 | $10,693 | $1,069 | $1,069 | $535 | $8,020 | $87,852 |
| Year 14 | $247,491 | $11,014 | $1,101 | $1,101 | $551 | $8,261 | $96,113 |
| Year 15 | $259,866 | $11,345 | $1,135 | $1,135 | $567 | $8,509 | $104,622 |
| Year 16 | $272,859 | $11,685 | $1,169 | $1,169 | $584 | $8,764 | $113,386 |
| Year 17 | $286,502 | $12,036 | $1,204 | $1,204 | $602 | $9,027 | $122,413 |
| Year 18 | $300,827 | $12,397 | $1,240 | $1,240 | $620 | $9,297 | $131,710 |
| Year 19 | $315,869 | $12,769 | $1,277 | $1,277 | $638 | $9,577 | $141,287 |
| Year 20 | $331,662 | $13,152 | $1,315 | $1,315 | $658 | $9,864 | $151,151 |
| Sale at end of year 20 | Sell price: $331,662 | PPh 2.5% disposal tax: $8,292 | Net from sale: $323,370 | ||||
| Total net return (rental income + net sale proceeds − $125,000 investment) | $349,519 (279.6% ROI) | ||||||
Understanding the Indonesian taxes applied
Two separate taxes apply to this investment — one annual, one on sale
Annual: PPh Final (Rental Income Tax)
| Rate | 10% of gross rental income |
| Type | Final withholding tax (PPh Pasal 4 ayat 2) |
| Paid by | Property owner — or withheld by tenant |
| Filing | Final — no annual Indonesian tax return required |
How “paid by” works in practice:
If your tenant is a company or business (the most common scenario for quality rental properties), the tenant is legally required to withhold the 10% tax from the rent and pay it directly to the Indonesian tax authority on your behalf. If monthly rent is $625, the tenant pays you $563 and sends $62 to the government. You never handle the tax yourself.
If your tenant is a private individual, the property owner is responsible for paying the 10%. In practice your property manager handles this — they collect the full rent, set aside 10%, and pay it to the tax office before remitting the balance to you.
Why “Final” matters to a foreign investor: In most countries, rental income is added to your total income and taxed at your personal rate. In Indonesia, this 10% is a final tax — once paid, the obligation is completely settled. You do not need to file an Indonesian income tax return or pay any additional Indonesian tax on this rental income.
Important: “Final” means final in Indonesia only. You remain responsible for declaring this rental income to the tax authority in your own home country. Consult a tax advisor in your country of residence.
On sale: PPh on Land & Building Disposal
| Rate | 2.5% of the gross selling price |
| Type | Final income tax on disposal (PPh Pasal 4 ayat 2) |
| Paid by | Seller, before the deed of sale is signed |
| Applied to | Full selling price, not just the capital gain |
Indonesia does not apply a separate capital gains tax. Instead, this 2.5% flat rate on gross proceeds is the disposal tax mechanism. At a $331,662 selling price, this amounts to $8,292 — a known, predictable exit cost that can be factored into your investment calculation from day one.
This tax must be paid and the receipt presented to the notary (PPAT) before the deed of sale and purchase (AJB) can be signed. Your notary will guide you through this step at the time of sale.
Ready to explore Medan investment opportunities?
Read our full market guides or browse available properties in Medan and Melbourne.
All ROI figures on this page are illustrative only and do not constitute financial advice. Growth rates assumed are not guaranteed. Consult a licensed financial advisor and Indonesian notary before proceeding with any property purchase.
Frequently Asked Questions
What is the projected 20-year ROI on a $125,000 Medan property investment?
A $125,000 Medan property investment under Hak Pakai leasehold projects a 279.6% total return over 20 years, generating $349,518 in net profit — a 7.0% annualized return.
What is the gross rental yield on Medan investment properties?
The model assumes a 6.0% gross rental yield in year one, generating $7,500 in annual rent on a $125,000 property, with rent inflating 3.0% annually thereafter.
What costs are deducted from rental income in Medan?
Total deductions equal roughly 25% of gross rent: 10% rental income tax (PPh Final), 10% property management fee, and 5% for maintenance and upkeep.
What is the exit value of a Medan property after 20 years?
Assuming 5.0% annual capital growth, a $125,000 property is projected to reach an exit value of $331,662 after 20 years, subject to a 2.5% disposal tax on sale.