Australians are Bali’s largest market. Almost one in four foreign visitors to the island in 2025 came from Australia, and many of the guests in a Canggu villa will be your own compatriots. For an Australian buyer the property rules on Bali are the same as for anyone else. What differs is what happens at home: the ATO taxes your worldwide income, so the villa appears on your Australian return as well.
23.4%
of Bali’s 6.95 million foreign arrivals in 2025 were Australian, the largest group
A$50,000
foreign assets at or above this value must be disclosed on your Australian return
3 currencies
price in US dollars, rent and costs in rupiah, tax and return in Australian dollars
Tax in Indonesia first
Rental income from a villa on Bali is taxed in Indonesia. For an owner who is not an Indonesian tax resident the rate is 20% of the gross rent, usually withheld by the operator before the income reaches you. We cover the Indonesian side in detail in our article on tax and costs. Under the 1992 tax treaty between Australia and Indonesia, Indonesia keeps the right to tax income from property on its territory, and Australia gives relief for the tax paid there.
Then in Australia
As an Australian resident you declare the net foreign rent: the gross rent, with the Indonesian tax added back, less the deductible expenses, all converted to Australian dollars. The Indonesian tax you actually paid can then be claimed as a foreign income tax offset. The offset has a limit, and it applies only to tax that has been paid, so the Indonesian withholding slips matter. Your tax agent can tell you how much of it you can use.
Two more points. If your foreign assets are worth A$50,000 or more at any time in the year, you disclose them on your return. And selling the villa, or the remaining term of a lease, is generally a capital gains event in Australia. The rules on how a Bali lease is treated, what costs count and which exchange rate applies are for your tax agent, not for a sales page, including ours.
The currency question
Most Bali villas are priced in US dollars. The rent comes in rupiah, and your return is measured in Australian dollars. Over a holding period of ten years or more, the movement of the Australian dollar against the US dollar can matter as much as a few points of occupancy. When we model a project, we show the result in the currency it is earned in, so you can apply your own view of the exchange rate.
The records you will need
- The purchase or lease contract and every payment, with dates and exchange rates.
- The Indonesian tax withholding slips for the rent. Without them the offset is hard to claim.
- Monthly statements from the operator: bookings, revenue, fees and costs.
- Invoices for the costs you deduct, such as maintenance and insurance.
- The terms of any sale, including what the buyer paid for the remaining lease.
What we do, and what we do not
We are not Australian tax advisers, and we do not structure purchases through super funds or trusts. What we can do is give you and your tax agent the documents in English, show where each number in our model comes from, and answer questions about the Indonesian side. Robert Csala, our director for Australia, works with our Australian clients.
Before you commit, take two things to your tax agent: our return model for the project and this list of records. Both are easier to settle before the purchase than after it.
This article is general information, not legal, tax or investment advice. Rules in Indonesia change, sometimes by administrative decision. Confirm your own position with a qualified adviser before you commit.