Bali’s rental yields look high next to Europe. Glopra measured an 8.30% gross yield for Indonesia in its July 2026 data. The number that matters is what reaches your account, and Indonesian tax takes its share before a single cost is paid.
20%
tax withheld from gross rent paid to a non-resident owner, with no deductions
11.8%
of the price: Glopra’s estimate of buying and selling costs together in Indonesia
10%
regional accommodation tax in Badung, paid by the guest on top of the nightly rate
Why 20% and not 10%
The 10% quoted on most listing pages comes from Government Regulation 34/2017, a final tax on rent from land and buildings. That regulation expressly excludes accommodation services, which is what nightly villa rental is. For a non-resident who earns income from an Indonesian property, article 26 of the income tax law applies: 20% of the gross amount, withheld at source and final. Management fees, pool service, depreciation and loan interest do not reduce the base.
Tax treaties do not lower this for property income: the country where the property sits keeps the right to tax it. How your home country treats the income, as exempt or with a credit, depends on your treaty and your situation. Investors in Australia and Europe should ask their own accountant. We provide the income and cost figures they need.
One yield, three versions
- 8.30%: gross yield, Indonesia, Glopra data of July 2026.
- 6.64%: the same after the 20% withholding, before any operating cost.
- Lower again after the operator’s fee, maintenance, furniture replacement and empty nights. Glopra’s Bali market review puts realistic net yields for self-managed owners at 4–6%.
The cost of getting in and out
Glopra estimates the round trip, buying and later selling, at 11.8% of the price. It is not one tax. When a registered title is acquired, the buyer pays the BPHTB acquisition duty, 5% in Badung above an exemption threshold. The notary and the agent take most of the rest. On a sale the seller pays a 2.5% final income tax on the transfer value, charged on the price rather than the gain, so it applies even to a sale at a loss. Which items apply depends on the structure: a lease has different costs from a transfer of a right of use or a building right. Ask for an itemised cost sheet for your structure before you sign.
Only part of this is negotiable: the agent’s fee and the due diligence, not the duties. That is why short holding periods rarely work in Indonesia.
Do not build the case on price growth
Measured in US dollars, Indonesian property prices fell over one, five and ten years in Glopra’s data: −8.7%, −11.9% and −9.6%. Bali’s strongest micro-markets have moved differently, but the lesson holds. The investment has to work on rent, after tax, in the right zone and with a licence. Price growth is a bonus, not the plan.
What to ask for before you buy
- The yield before and after the 20% withholding, and after operating costs.
- Who operates the villa, what the fee is, and whose company holds the rental licence.
- An itemised list of purchase costs for this specific structure.
- Which costs apply on resale and on extending the lease.
- Whether you will spend more than 183 days a year in Indonesia. That changes your tax residence and needs advice.
On our project pages we show two return scenarios: the developer’s model and a more conservative one based on AirDNA data. Neither is a guarantee.
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.