Can Australians buy property in Bali? Yes — and then there are two tax systems

Indonesian land law does not care that you are Australian. The Australian Taxation Office does, and that is the half of the question most Bali guides leave out.

Thirteen questions, and whose rules answer each one

An Australian buying in Bali is dealing with two tax systems and one land law. Most of the confusion comes from asking one country’s question of the other’s rules. The middle column sorts that out.

Four of the thirteen are answered by Indonesian land law, which does not care that you are Australian. The rest are answered by Australian tax guidance or by the treaty — and they are the part the Bali guides usually skip.

The Indonesian half is short, because nationality does not matter

PP 18/2021 article 1(14) defines Orang Asing — the category every foreign-ownership rule is written for — as anyone who is not an Indonesian citizen whose presence benefits, does business in, works in or invests in Indonesia. There is no Australian rule, no American rule, no British rule. There is the foreigner rule.

So everything the rest of this site says applies to you unchanged: freehold is closed (UUPA (Law 5/1960) art. 21(1)); what a foreign individual may own is framed as a home — a landed house, or a strata unit (Permen ATR/BPN 18/2021 art. 185); hak pakai needs a valid immigration document at every renewal; and a nominee arrangement is void. The full table of fourteen listing terms.

The Australian half: what the ATO says you owe at home

This is where being Australian actually changes the purchase. The source here is the Australian Taxation Office’s own guidance for Australian residents with foreign income, last updated 15 June 2026. We quote its wording rather than paraphrasing it, because its hedges are deliberate.

Rental income from a Bali property

As an Australian resident for tax purposes you must declare income earned anywhere in the world in your Australian tax return. The ATO’s list of what that covers includes, in its words, “rental income from real estate” held overseas. A villa let in Bali is not outside the Australian system because the property and the tenant are.

Selling it: capital gains tax

The ATO’s wording is that if you own an asset overseas, you may have to pay Australian capital gains tax when you sell it, and that you need to keep appropriate records. It describes this as a complex area where exemptions may apply — which is a reason to get advice, not a reason to assume one applies to you.

Changing residency with the property still in hand

Two rules in the same ATO guidance matter to people who move. If you acquired the overseas asset before becoming an Australian resident, you treat it as acquired on the day you became resident. If you stop being an Australian resident while holding it, you treat it as disposed of on the day you stopped. The second one catches people retiring to Bali: leaving Australia can be a tax event for the villa you are leaving to live in.

Tax already paid in Indonesia

Tax you pay in Indonesia may entitle you to a foreign income tax offset. The ATO sets three conditions: you paid the tax overseas, you have records to prove it, and the foreign country has taxing rights over the income. It also notes the offset will not always equal the tax you paid overseas. Keep the Indonesian tax documents from the start.

The treaty: which country may tax what

Treasury lists the Australia–Indonesia double tax agreement as signed on 22 April 1992 and in force since 14 December 1992, modified by the Multilateral Instrument with effect from 1 August 2020. Two of its articles do most of the work for a property owner.

Article 6 — income from real property

Income from real property may be taxed where the property is situated. Paragraph 2(a) defines real property to include a lease of land and any other interest in or over land, whether improved or not, so a leasehold villa is inside the article. Paragraph 4 applies it to income from the direct use, letting or any other use of the property — which is rent.

Article 13(1) — selling it

Gains derived by a resident of one country from the alienation of real property situated in the other may be taxed where the property is situated. On the Indonesian side, the seller of a land right bears final income tax of 2.5% of the gross transfer value (PP 34/2016 art. 2(1)(a)).

What “may be taxed” means

The treaty gives Indonesia the right; it does not take Australia’s away. That is why the ATO’s foreign income tax offset exists — to relieve the double charge where both countries tax the same income — and why its conditions matter.

What we have not covered, deliberately

This page quotes the ATO and the treaty. It does not quote the Income Tax Assessment Act itself, which we did not read, and it gives no Australian tax rates, discounts or thresholds. It says nothing about visas, which this site does not cover. And it is not tax advice: the ATO’s own guidance repeatedly says the answer depends on your circumstances, and that is a question for an Australian tax adviser with the Indonesian documents in front of them.

Before you buy, as an Australian

1. Settle the Indonesian structure first

Which right, for how long, and whether it fits a rental plan — the same questions any foreigner asks. The three routes compared.

2. Record the value on the day it matters

Purchase price, and its value at any change in your residency. The ATO’s rules on moving both turn on a value at a date.

3. Keep every Indonesian tax document

The offset depends on proving tax was paid. The seller’s final tax on sale and any tax on rent are the ones to keep.

4. Plan the move before the move

If retiring to Bali is part of the plan, ceasing Australian residency with the property in hand is itself an event.

We are not an agency or a tax adviser, and we are paid a fixed fee per enquiry whether you buy or not. That is why this page sends you to the ATO's wording rather than to a view.

Questions on this page