Search for Bali property investment from Australia and you find two kinds of page: agencies quoting 12–20% returns, and Reddit threads about money that disappeared. Both happen, project by project. This guide sets out, with numbers, what speaks for Bali today, what speaks against it, and the handful of questions on which a specific purchase turns.
1.63 million
visits to Bali by Australians in 2025, almost one in four foreign arrivals
No. 1
on Tripadvisor’s list of destinations for 2026, ahead of London and Dubai
53%
average occupancy of Bali rental villas in 2025, according to VillaAudit
Why investors look at Bali
Demand is broad and steady. Bali received 6.95 million foreign arrivals in 2025, 9.7% more than a year earlier, and passed its pre-pandemic peak (6.28 million in 2019) in 2024. In the first seven months of 2026 the airport handled 13.2 million passengers, 8.5 million of them on international flights.
For an Australian buyer the demand is familiar. Australia is the island’s largest market by a wide margin: 1,628,459 visits in 2025 and a quarter of all foreign arrivals in the first half of 2026. Many of the guests in your villa would be Australians.
Bali has no real off-season. In 2025 the strongest month, July, brought 697,000 foreign arrivals and the weakest, February, 451,000, a gap of roughly one and a half times. Spending is rising too. According to the provincial statistics, a foreign visitor spent USD 145 a day on the island in 2019 and USD 172 in 2025.
What the brochures leave out
Visitor numbers are at a record, but income per rental property has fallen. VillaAudit’s February 2026 review found that rental supply on the island grew by 107% over three years, while nightly rates fell by 14% and total rental revenue by 16%, with occupancy almost unchanged. Supply grew faster than demand. AirDNA shows the same: Bali’s average nightly rate is 17.6% lower than a year ago.
Prices do not only go up either. Measured in US dollars, Indonesian residential prices fell over one, five and ten years in Glopra’s data. VillaAudit found that over three years the median price of leasehold property on Bali fell by 5%, while freehold rose by 10%. The conclusion: a Bali villa has to work on rental income, not on capital growth.
Leasehold, not freehold
As a foreigner you cannot hold Hak Milik, Indonesia’s freehold title. Three routes remain: a lease (Hak Sewa), a right of use (Hak Pakai), which needs an Indonesian residence permit, or a building right held through a foreign-owned Indonesian company (PT PMA). Since July 2026 Bali has stopped issuing licences in 18 business lines to newly formed foreign-owned companies, accommodation among them. For most Australian buyers the lease is the practical route.
If a listing says “freehold”, ask whose name will be on the title. Buying in the name of an Indonesian friend, a nominee, is void by law: the land can fall to the state and the money cannot be reclaimed. An Indonesian civil coalition estimates that about 10,500 plots on Bali are held this way, and in 2026 the Bali police set up a task force on these cases.
The 2026 rules
- Rental licence. Since 1 August 2026 the booking platforms have been removing Bali listings without a verified licence.
- Zoning. Only a property in a suitable zone can be licensed for holiday rental. We checked 22,653 Canggu listings against the Badung zoning map: 23.6% of them sit in the tourism zone.
- Building approvals. A building approval (PBG) is needed before construction and a certificate of fitness for use (SLF) before the villa is used.
Realistic returns: 4 to 8% before tax
A well-run one-bedroom villa returns about 8% a year after booking commissions, running costs, maintenance and the operator’s fee, before tax. If the same villa only matches the market average, the figure drops to 4–5%. Indonesia then withholds 20% from a non-resident owner, and how much that takes depends on which amount it is applied to. We set out the full calculation, line by line, in a separate article.
The lease term is a cost as well. On a 30-year lease the price is used up at about 3.3% a year, because the villa returns to the landowner at the end unless the lease is extended. When you compare Bali with an investment property at home that you will still own in 30 years, take those 3.3% off the villa’s yield first.
The Australian side
The ATO taxes your worldwide income, so the villa also appears on your Australian return. Under the 1992 tax treaty Indonesia keeps the right to tax the rent, and Australia gives a foreign income tax offset for tax actually paid there. Foreign assets worth A$50,000 or more at any time in the year must be disclosed. The villa is priced in US dollars, the rent comes in rupiah, and your result is measured in Australian dollars, so over ten years the exchange rate can matter as much as a few points of occupancy.
Reviews and forums: how to test a promise
- Ask for the operator’s monthly statements from villas the developer has already finished, not a projected yield.
- Check whose name is on the land certificate and that every owner signs the lease.
- Ask which company holds, or will hold, the rental licence.
- If a return is “guaranteed”, ask who guarantees it and what stands behind the guarantee.
- Pay only to the company named in the contract, ideally against verified construction stages.
Who it suits, and who it does not
It can make sense if the money is part of your savings rather than all of it, if you can hold for ten years or more, and if you want rental income in US dollars rather than quick capital growth. It does not suit you if you may need the money back within a few years: buying and later selling together cost about 11.8% of the price on Glopra’s estimate, so short holding periods rarely work. Nor does it suit you if owning the land matters to you.
How to decide on a specific project
Before a project appears on our site, we review it in six areas: concept and zoning, legal title and owners, developer and construction, operation, the financial model, and risks and open questions. So far we have reviewed seven projects. The criteria are published, so you can apply them to other projects too.
If you are weighing up a specific project, Robert Csala, our director for Australia, can go through these questions with you in a 30-minute call. If we think Bali is not right for you, we will say so.
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.