balivillacareProperty investment in Bali: every tax and rule, from purchase to sale
Key takeaways
- A foreigner can invest through a lease, a house on hak pakai, or a PT PMA holding HGB — not freehold.
- Taxes land at five points: purchase, each year held, each night let, each dividend paid out, and the sale.
- Nightly income is not taxed at the widely quoted 10%: PP 34/2017 excludes lodging. It is business income — 0.5% of turnover or 22% of a company's profit.
- Occupancy for non-star accommodation averaged 37.0% in January to August 2026 (BPS). Projections well above that need a reason.
- A PT PMA adds capital rules, quarterly reporting and a 20% layer on dividends to a non-resident.
Bali property is sold to investors on yield. The yield that reaches an investor is what is left after a set of taxes and rules that apply at every stage of the investment — most of them fixed by law, and several of them commonly misstated. This page puts them in order, with a link to the detail for each.
Stage by stage
| What applies | Rule | More | |
|---|---|---|---|
| Buying | Buyer: BPHTB 5% less IDR 80m; seller: 2.5% of the price | UU 1/2022; PP 34/2016 | detail |
| Holding | Annual land and building tax at 0.1–0.2% rates in Badung and Denpasar, on a taxable share of NJOP | Perda Badung 7/2023; Denpasar 5/2023 | detail |
| Letting nightly | Hotel tax up to 10%, paid by guests and filed by the supplier | UU 1/2022 Pasal 58 | detail |
| Income tax | 0.5% of turnover (PP 55/2022) or 22% of a company's profit; 10% only on a lease | PP 34/2017 Pasal 2(3) | detail |
| Taking profit out | 20% on dividends to a non-resident shareholder | UU PPh Pasal 26 | detail |
| Selling | Seller 2.5% of the price; buyer BPHTB | PP 34/2016 | detail |
Choosing how to hold it
Lease
The simplest route and the commonest: the right to use someone else's land for a building, for rent, with no statutory term. The investment is the contract. Leasehold explained.
Hak pakai
A foreigner with an immigration document may own a house on hak pakai — one plot, at most 2,000 m², above a minimum price, for residential use, which sits awkwardly with letting. The limits.
PT PMA
A foreign-owned company can hold HGB and run the letting, with at least IDR 2.5 billion paid up and more than IDR 10 billion invested including land for accommodation. The villa license code itself is allocated to cooperatives and small businesses. The PT PMA rules.
Nominee freehold
Void, with no recovery of payments made (UUPA Pasal 26(2)). Not a route.
Weighing a Bali villa investment?
Tell us which part of Bali you are looking at. Five questions, and your details are the last step.
The income side, and the exit
Occupancy
BPS Bali publishes occupancy for star hotels and for non-star hotels and other accommodation. For the latter, January to August 2026 ran from 32.70% to 43.16%, 37.0% on average. There is no villa-only figure. Month by month.
Deductions before the owner
Between the guest's payment and the owner sit the hotel tax, platform commission, management commission, running costs and any markup on them. The fee walk and the estimator.
The owner's income tax
Nightly letting is lodging, which PP 34/2017 Pasal 2(3) keeps out of the 10% final rate on rent. An eligible resident owner can pay 0.5% of turnover under PP 55/2022 for a limited number of years; a company otherwise pays 22% of profit, halved on the profit from the first IDR 4.8 billion of turnover. A company's income tax.
The exit
A sale costs the seller 2.5% of the price, final, paid before the deed; the buyer pays BPHTB. A company that sells and closes pays out the remainder as a liquidation distribution, taxed above paid-up capital as a dividend. Closing a PT PMA. A leasehold's exit is its assignment clause.
One villa, round trip
An illustration of the arithmetic, not a forecast: a PT PMA buys a villa on HGB in Badung for IDR 8,000,000,000 (a first acquisition there), lets it nightly with IDR 1,500,000,000 of turnover a year while inside PP 55/2022's three years, and later sells it for the same price.
| Amount | Rule | |
|---|---|---|
| Buyer's BPHTB at purchase | IDR 396,000,000 | 5% less IDR 80m, Perda Badung 7/2023 |
| Income tax per year, 0.5% of turnover | IDR 7,500,000 | PP 55/2022, Pasal 56 |
| Hotel tax per year, collected from guests | Up to 10% of what guests pay | UU 1/2022 Pasal 58 |
| Seller's tax at sale, 2.5% | IDR 200,000,000 | PP 34/2016, Pasal 2 |
| Dividend withholding, if profit is paid to a non-resident | 20% of the dividend | UU PPh Pasal 26 |
The two transfer taxes alone — one on the way in, one on the way out — take about 7.5% of the price before any year of income. A projection that ignores them overstates the return of a short hold.
What this page does not cover
- Running costs line by line. Every cost and its rule.
- Expected returns. We publish rules, not forecasts. Why quoted yields differ.
- Tax in the investor's home country. Outside Indonesian law. The Indonesian tax number: NPWP for foreign owners.
- Financing. Mortgages over a villa's title.
Common questions
What taxes does a Bali property investor pay?
At purchase, the buyer's BPHTB (5% less a first-acquisition allowance) and the seller's 2.5%. While holding, the annual land and building tax. While letting, the guests' hotel tax and the owner's income tax. Through a PT PMA, a 20% dividend withholding for a non-resident. At sale, 2.5% again.
Can a foreigner invest in Bali property?
Not in freehold. Through a lease, a house on hak pakai, or a PT PMA holding HGB — which needs at least IDR 2.5 billion paid-up capital and more than IDR 10 billion invested including land for accommodation.
What occupancy should I assume?
BPS published non-star accommodation occupancy of 32.7% to 43.2% in January to August 2026, 37.0% on average; star hotels averaged about 60%. A villa-only figure is not published.
Is rental income taxed at 10%?
Not for nightly letting: PP 34/2017 Pasal 2(3) excludes lodging from the 10% final rate. It applies when a house is leased to a tenant.
Should an investor use a PT PMA?
It is the structure that can hold HGB, but the villa license code is allocated to cooperatives and small businesses, and the company carries quarterly reports, capital rules and a second layer of tax on dividends.
Sources cited on this page
- UU No. 1 Tahun 2022 — BPHTB, PBB-P2, PBJT
- PP No. 34 Tahun 2016 — tax on transfers
- PP No. 34 Tahun 2017 — tax on rent, lodging excluded
- PP No. 55 Tahun 2022 — 0.5% of turnover
- Permeninves/BKPM No. 5 Tahun 2025 — PMA capital and investment
- BPS Provinsi Bali — tourism releases 2026
Every figure above links to the source it was read from. This page was last changed on 8 October 2026. How we check this.