Buying a house in Bali: The steps for a foreign Investor

Investing in Bali real estate yields an average return of 8-15% in 2026. This article explains how to achieve this return through a secure PMA structure and the right location choice.

Are you dreaming of your own villa under the sun, or are you looking for a solid investment with a high return? Buying a house in Bali is more popular than ever among Dutch entrepreneurs and investors in 2026. But how do you approach this safely? We explain exactly how the process works, from the legal structures to the tax implications in foreigns countries.

Performance

1. Why buy a house in Bali?

Bali has transformed from a mere holiday destination into a global investment hotspot. With consistent year-on-year tourism growth and a burgeoning digital nomad community, the demand for high-end luxury rentals has never been higher.

Average ROI (2026 Projection)

8-15% +12% YoY

Calculated based on average occupancy rates of 75%+ in premium zones.

Market Performance

High Growth +5% Stability

One of the most resilient real estate markets in Southeast Asia post-2020.

Here are Bali’s recent awards:

Destinasi Wisata Terbaik Dunia (2026): Peringkat #1 Travelers’ Choice Awards versi TripAdvisor.
The Best Island di Asia-Pasifik (2025): Penghargaan dari DestinAsian Readers’ Choice Awards.
Destinasi Bulan Madu Terbaik (2026): Honeymoon Destination terbaik versi TripAdvisor.
Top 10 Destinasi Budaya & Wisata Solo (2026): Peringkat atas untuk Cultural & Solo Travel Destination.

Legal Framework

2. Legal structures: Leasehold vs. PMA

We receive a lot of questions about ownership, can foreigners own land on Bali? Foreigners cannot technically “own” freehold land in Indonesia, but there are two secure methods commonly used by international investors to gain long-term control and ownership rights over property.

Leasehold (Hak Pakai)

Commonly used for residential and rental villas. Typically granted for 25-30 years with a pre-agreed extension option. Simple to set up and large opportunities for rental.

Ownership via PT PMA

The most secure way for serious investors is a PT PMA. By setting up a foreign-owned company (PT PMA), you can hold “HGB” titles, allowing full control and the ability to resell to other foreigners or locals.

Need a detailed roadmap?

Download our 2026 Guide to Indonesia Real Estate for Foreigners.

Hotspots

3. Popular regions for investment

Financial Planning

4. Tax implications: Strategy & Compliance

Local taxes

Understanding how your Indonesian assets affect your local wealth tax is critical for European investors.

Double Taxation

Indonesia has treaties with over 60 countries to prevent being taxed twice on the same income.

Exemptions

Certain reinvestment structures within a PT PMA can qualify for local corporate tax holidays.

Due Diligence

5. Location & Zoning (ITR) Explained

Before leasing land, it is highly recommended to have an investigation conducted (Due Diligence). Before buying land, you must verify its ITR (Tata Ruang) zoning. This determines what can be built.

Pink/Orange Zone (Tourist)

The "Gold Standard". Allows for commercial villa rentals, hotels, and tourist accommodation.

Yellow Zone (Residential)

Perfect for private homes. Rentals are possible but restricted to long-term leases only.

Green Zone (Agricultural)

Strictly no building allowed. Usually protected rice fields. High risk for investors.

Construction

6. Building Permits: IMB to PBG/SLF

When purchasing property in Bali, it is wise to thoroughly research the permits The Indonesian government recently transitioned from the old IMB system to the PBG (Persetujuan Bangunan Gedung) and SLF (Sertifikat Laik Fungsi). Ensure your developer has transitioned their documentation to avoid construction halts.

7. Conclusion

Investing in Bali is highly lucrative but requires localized knowledge. Bali Property Advisory acts as your bridge, ensuring legal compliance, tax optimization, and selecting properties with the highest potential for appreciation.