Buying on Bali works differently from buying in Australia. Most problems start when a buyer expects what they know from home: a title in their own name on a public register, a conveyancer, settlement through a bank. On Bali a foreign buyer is protected first of all by the contract and the notarial deed. The order of the steps, and what you check at each one, matters more than the price.
0
freehold titles a foreign individual can hold in Indonesia, Australians included
25–35 years
the initial lease term in 86% of Bali apartment projects (Colliers)
20%
Indonesian tax withheld from gross rent paid to a non-resident owner
1. Choose the title
A foreigner has three routes: 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). If you do not live in Indonesia, the lease is in practice what remains. Buying in the name of an Indonesian friend, a nominee, is void and carries criminal risk. Your passport makes no difference: the rules are the same for every foreigner.
2. Check the zoning
Before you sign anything, check the plot’s zone on the official spatial plan. Only a property in a suitable zone, with a licence, can be let to tourists. Since 1 August 2026 the booking platforms have been removing unlicensed Bali listings, so a villa in the wrong zone earns no rent, however good it looks.
3. Check who owns the land
Start with the land certificate (sertifikat), checked at the land office (BPN) rather than from a copy the seller hands you. The lessor must be the person named on it, and if several people are named, all of them sign. If the land is marital property, the spouse consents in writing. Ask also whether there is a mortgage over the land or a court case about it.
4. Check the approvals and the developer
A building approval (PBG) is needed before construction and a certificate of fitness for use (SLF) before the villa is used. For an off-plan project, ask for the PBG, or at least the timetable for getting it. Look at the developer’s finished work, on site if you can, and check that the construction contract sets a completion date and a penalty for delay.
5. Reservation and preliminary agreement
Most developers take a deposit to take the property off the market. Ask whether it is refundable, and on what conditions. Client identification also happens here: Indonesian notaries must identify their clients under anti-money-laundering rules. If you wish, you can appoint your own Indonesian lawyer to review the documents.
6. The lease and the notarial deed
A lease is not entered on the land register, so the contract is what protects you. Sign the lease before an Indonesian notary, as a notarial deed. Check the term, the extension terms (a fixed price or an independent valuation), inheritance, your right to sell and to let, and what happens to the building at the end. A properly drafted lease does not end when the owner dies or sells the land. If you cannot travel, ask the notary whether the deed can be signed under a power of attorney and how it must be prepared.
7. Payment in stages
For an off-plan villa, tie payments to verified construction stages rather than to calendar dates. Pay only to the company named in the contract, never to a personal account. Pay from an Australian account in your own name, in US dollars if that is the contract currency, and keep every confirmation with the date and the exchange rate. Your tax agent will need them, and so will a future buyer.
8. Indonesian costs and taxes
On top of the price, allow for the notary and legal fees, VAT at 11% if it is not included, and, when a registered title is acquired, the 5% BPHTB acquisition duty. When the villa is let, the guest pays a 10% regional accommodation tax, and 20% is withheld from rent paid to a non-resident owner. Buying and later selling together cost about 11.8% of the price on Glopra’s estimate.
9. Handover, operation, letting
At handover, ask for a defects list and a handover report. To let the villa you need a licensed operator. Settle in advance which company holds the rental licence, what the operator charges, how often you receive statements, and how many nights a year you can use the villa yourself. Most of the return depends on the operation, not on the building.
What to keep for the ATO
As an Australian resident you declare the net foreign rent on your return and can claim a foreign income tax offset for the Indonesian tax actually paid, under the 1992 tax treaty. Foreign assets worth A$50,000 or more at any time in the year must be disclosed. A later sale, of the villa or of the remaining lease, is generally a capital gains event. Keep the contract, every payment with its exchange rate, the Indonesian withholding slips and the operator’s monthly statements. We cover the Australian side in more detail in a separate article.
One more point: buying a leasehold villa does not by itself give you the right to live in Indonesia, and property does not qualify for the golden visa for individual investors, which requires financial assets.
At EM Villas the lease is executed as a notarial deed on Bali, and payments are tied to verified construction stages. The process is set out step by step on our How it works page.
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.