For many Australians, Bali is more than just a holiday destination, it's a second home. But behind the promise of rice-paddy views and infinity pools lies a complex legal landscape, and while buying a Balinese villa might sound simple, the reality is far more complicated.
“Bali has long been a favourite for Australians,” said Nathan Ryan, co-founder and owner of Bali Realty, a Seminyak-based agency established in 2009.
“But things really took off during and after Covid, when people realised remote working made island living a genuine option.
"Compared with Sydney or Melbourne, property here can look like incredible value — you can secure a quality villa for a fraction of the cost of an apartment back home.”
That dream, however, can unravel fast if you're not careful, warned Maria Rosey, founder of One Touch Finance, a company which helps international buyers navigate Indonesia’s property laws.
Buying a property in Bali is not as simple as it may seem. Picture: Getty
“Buying property in Bali is nothing like buying at home,” she said. "And the mistakes people make, they’re expensive.
"For every successful purchase I help close, I see several fall apart because the buyer didn’t grasp what they were actually buying into. The dream is absolutely achievable — if you go in with your eyes open.”
The land title reality
The single biggest hurdle for foreigners looking to buy property in Bali is the ownership structure.
Unlike Australia, where freehold ownership is standard, Indonesian law generally prohibits non-citizens from owning land outright.
“Foreigners can’t own freehold land directly here,” Mr Ryan said. “That doesn’t mean ownership isn’t possible — it just works differently.”
Luxury real estate lines Bali's rugged coastline. Picture: Getty
The most common pathway for foreign buyers is leasehold - called ‘Hak Sewa’ - which involves leasing the land for a fixed term, typically 25- to 30 years, under a private contract with the landowner.
“It gives you full legal rights to use, rent and even resell during the lease term. For most lifestyle buyers or investors, it’s perfectly practical,” he said.
While many leases include options to extend, those extensions are never guaranteed by law and are usually renegotiated at market rates when the initial term expires.
The other path is establishing a PT PMA — a foreign-owned Indonesian company. This structure can acquire property in its name and suits those running a serious commercial operation.
While it offers more security and time on paper, Ms Rosey warned that buyers must accept the higher cost and administration.
“Every structure for foreigners is effectively a workaround,” she explained. “Leasehold is simpler and cheaper, but the clock is always ticking and when the lease ends you’re negotiating with the landowner’s heirs with no guarantee of favourable terms.
"PT PMA buys you time and security on paper, but you inherit ongoing compliance, tax filings and corporate obligations.
While a PT PMA provides greater certainty, it does not grant permanent ownership. All foreign ownership structures in Indonesia are time‑limited and regulated.
"For a holiday home you’ll use a few weeks a year, leasehold can make sense. For a serious, larger-scale investment, PT PMA is often smarter — just accept the cost and administration.”
The need for due diligence
Plenty of Australians have learned the hard way that the most expensive mistakes start with misplaced trust.
“People meet a friendly local who offers them a ‘great deal’ and, before they know it, they’ve wired money without proper checks,” Ms Rosey said.
All foreign ownership structures for property in Indonesia are time‑limited and regulated. Picture: Getty
Both experts stress that professional advice is non‑negotiable. For a transaction as complex as a cross-border property deal, the only safe path is hiring a reputable property lawyer experienced in foreign property transactions, and an independent Indonesian notary (PPAT) who specialises in the local system.
“In Australia, you’d never buy without a conveyancer,” Mr Ryan said. “Here, you need that and more. A good notary verifies the land certificate, confirms zoning and building permits, and ensures everything is legally sound.”
Counting the hidden costs
Sticker price is only the beginning. Even with the paperwork watertight, many buyers underestimate the true cost of ownership.
The fluctuating Australian dollar against the Indonesian rupiah can impact your total investment overnight, making a clear money transfer plan crucial to avoid potentially losing tens of thousands on poor exchange rates.
The purchase price is only part of the equation. Picture: Getty
Beyond the exchange rate, buyers must budget for several often-overlooked expenses that can significantly inflate the final price.
Mr Ryan said Notary fees usually sit around 1% of the purchase price, depending on the complexity of the transaction. But the real sting comes later.
“When you sell or transfer a lease, the government’s lease-transfer tax applies — 10% for Indonesian taxpayers, 20% for foreigners. It’s a big bite if you haven’t planned for it.”
Ms Rosey added PT PMA buyers also face annual accounting and compliance costs in the thousands.
“People are shocked when those bills start arriving,” she said. “Plus, Bali’s tropical climate is hard on buildings. Maintenance here is far more intensive than in Australia. If you are renting it out, add property management fees, which can run to 15-20% of your gross income.”
Picking your postcode
When it comes to location, Mr Ryan said Australians still gravitate to the strongest markets.
“The southwest corridor from Seminyak through to Canggu and Pererenan, plus the Bukit region around Uluwatu and Bingin, remain the strongest for foreign buyers,” he said. “They’re lifestyle-driven and still deliver solid short-term rental demand.”
In these prime spots, he said entry-level apartments start around $150,000 and villas from $250,000 with lower prices further south.
Australians looking to buy in Bali often gravitate to the hottest property markets. Picture: Getty
Beyond that, Sanur is emerging as a serious contender.
“The new hospital, shopping precinct and harbour have completely revitalised it,” he explained. “It’s no longer the ‘sleepy’ side of the island.”
Ms Rosey believes the smart money is already shifting beyond the established hubs.
“Canggu and Seminyak are getting saturated,” she said. “Tabanan on the west coast, the east coast around Candidasa and Amed, and the southern Bukit near Bingin are where I’m seeing opportunity. Limited supply, new infrastructure and a more authentic vibe — that’s the next wave.”
The real estate outlook
Looking to the immediate future of buying in Bali, Mr Ryan described a massive development boom since 2021, with the first signs of oversupply emerging, particularly in new villas and apartments where sales volumes have slowed as much as 50% over the past year.
“Prime beachside land will always hold value, but in outlying areas we’re definitely in buyer’s-market territory," he said.
Purchasing a home in Bali is structured very differently to Australia. Picture: Getty
Despite short-term volatility, both remain confident in Bali as a long term prospect.
“If you buy smart, structure correctly, respect the culture and think long-term, Bali can absolutely be part of a solid portfolio,” Ms Rosey said.
“However, if you’re chasing guaranteed returns and quick profits, you’ll be disappointed.”
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