Published on and written by Cyril Jarnias
Investing in Overseas Real Estate: Bali vs. Its Neighbors
Investing in overseas real estate is a major decision, and when considering exotic appeal and growth potential, Bali in Indonesia naturally attracts ambitious investors. However, the real question is how Bali positions itself compared to its neighboring countries, particularly in terms of cost, profitability, and real estate market stability.
This article examines the specifics and distinctions between purchasing real estate in Bali and other popular destinations in the region, offering investors an informed perspective to make wise and strategic choices.
Advantages of Buying Real Estate in Bali Compared to Its Neighbors
Bali stands out distinctly among Southeast Asian real estate investment destinations thanks to a unique combination of specific advantages, both financially and qualitatively.
Advantages of the Local Real Estate Market and Growth Potential
- High Rental Yields: Villas and short-term rentals in Bali, particularly in areas like Canggu or Uluwatu, show annual rental yields of 8% to 12%, higher than averages seen in Thailand (5–7%) and Vietnam (4–6%).
- Resilient Market: Tourism strongly rebounded after the pandemic, supporting real estate demand. The rise of remote work is attracting a new wave of expatriates and digital nomads.
- Attractive Prices: In some still-emerging Balinese regions, real estate remains more affordable than in major Thai or Malaysian cities.
Foreign Investment Policies and Legal Framework
| Country | Property Access for Foreigners | Maximum Lease Duration |
| Bali | Long-term leases & corporate structures | Up to 80 years |
| Thailand | Direct purchase limited to apartments | Generally up to 30 years |
| Vietnam | Significant restrictions on direct purchase | Often short leases |
| Malaysia | Purchase possible but under high conditions | Variable |
- In Bali, foreigners can secure their investment through long-term leases (up to 80 years) or via structured local companies.
- This legal flexibility allows easier access without being subject to the restrictive constraints that exist in Vietnam or Thailand for certain property types.
Tourist Demand and International Appeal
- Globally recognized destination with a steady flow of international tourists.
- Strong demand in the seasonal rental market favoring high occupancy year-round.
- Balance between high-end tourism (private villas) and more accessible accommodations.
Exceptional Quality of Life
List of assets:
- Preserved natural setting: renowned beaches, iconic rice fields, majestic volcanoes.
- Rich cultural life blending unique Hindu traditions in the region.
- Varied culinary offerings (local organic/vegan cuisine), numerous wellness spas.
Modern infrastructure is developing rapidly: reputable international schools, high-performing private clinics, state-of-the-art coworking spaces. The dynamic expatriate community offers a stimulating social environment.
Unique Cultural Influences
Bali is marked by a strong cultural identity: colorful daily ceremonies, globally recognized local craftsmanship. Unlike its predominantly Buddhist/Muslim/Confucian neighbors—this uniqueness gives Bali a distinct style that appeals to both investors and long-term residents.
Accessibility & Local Infrastructure
Key points:
- Direct flights to major Asian/Australian capitals
- Regular development of main roads connecting tourist hubs
Continuous modernization significantly improves residential comfort while preserving authentic Balinese charm.
General Climate & Sustainable Regional Appeal
The temperate tropical climate with two clearly defined seasons guarantees mild weather year-round. This stable climatic factor enhances viability for both living and renting throughout the twelve months—where some neighboring countries experience more extreme weather uncertainties.
In summary, investing in real estate in Bali combines high yield, legal flexibility suited to foreigners, sought-after quality of life, and unparalleled cultural appeal compared to Thailand, Vietnam, or Malaysia. These elements make Bali a flagship destination both for living and for developing real estate assets in Southeast Asia today.
Good to Know:
Buying real estate in Bali offers several advantages over its neighbors like Thailand, Vietnam, or Malaysia. Bali’s local real estate market offers significant growth potential and better returns on investment, partly due to strong tourist demand supporting seasonal rentals. Indonesian foreign investment policies are more favorable, allowing foreigners to engage more easily in property purchases. Bali stands out for its quality of life and unique cultural influences, making it an attractive destination for expatriates. In terms of accessibility, the island has booming infrastructure, enhancing its convenience for investors. The tropical climate and scenic landscapes are also major assets. Finally, the Indonesian legal framework for foreign ownership, although complex, is manageable with good legal advice, providing additional security for buyers.
Comparison of Real Estate Tax Policies Between Bali and Its Neighboring Countries
| Country | Annual Property Tax (PBB/Equivalent) | Property Transfer Tax | Exemptions and Tax Incentives | Foreign Buyers: Conditions and Implications | Impact on Market/Local/Investors |
|---|---|---|---|---|---|
| Bali (Indonesia) | Pajak Bumi dan Bangunan: – 0.5% x 20% of NJOP* (taxable value) payable annually. |
– Freehold seller: PPH 2.5% – Buyer: BPHTB 5% of declared price – Leasehold seller: PPH 10-20% depending on tax status |
– Deductions for rental investment expenses – Possible exemptions for new projects |
– Foreigners can purchase via leasehold or local company. – Higher taxes if no Indonesian tax number. |
Reasonable taxation but complex process; attractive market for investors seeking rental yield. |
| Thailand | House & Land Tax: – 0.02%-1.2% depending on use (residential/commercial) |
– Transfer: approx. 2% of official price – Surtaxes for quick gains |
– Direct purchase prohibited except condos (moderate acquisition fees; low annual taxes. | Dynamic focus on Bangkok and tourist areas; strong appeal due to tax stability and local incentives. | |
| Malaysia | Cukai Tanah / Quit Rent: – Low annual amount based on size/use |
Real Property Gains Tax: degressive up to exemption after several years |
Foreigners can purchase under regional conditions/minimum price. | Market very open to foreign capital, especially Kuala Lumpur/Penang. |
|
| Singapore | Property Tax: Progressive between ~4-16% annual rental value |
– Buyer’s Stamp Duty (~1-4%), Additional BSD if foreigner (+60%) | Targeted aid for locals/first-time buyers; limited deductions otherwise. | Strict restrictions on non-resident purchases (+increased taxation). | Strict regulation limits foreign speculation; deterrence through heavy taxation for non-residents. |
*NJOP = Nilai Jual Objek Pajak (official value used as basis for calculation in Indonesia)
Summary List of Key Points:
- Bali applies a moderate annual tax based on cadastral value, a sales tax on the seller side (PPH), and an acquisition fee paid by the buyer (BPHTB). For investors without a local tax number, rates are significantly increased.
- Thailand favors low acquisition fees but imposes progressive taxation based on usage type and holding period.
- In Malaysia, a minimal land tax adds to a progressive tax on real estate gains that decreases over time—advantageous in a long-term perspective.
- Singapore displays high annual taxes and especially heavily surcharges foreign buyers via an “Additional Buyer’s Stamp Duty” that became prohibitive in April 2023.
Main Exemptions/Incentives:
- In Bali as in Malaysia or Thailand, there are various exemptions related either to primary residential status or to certain categories of investors or new real estate projects.
- In Singapore, however, these measures are very restricted outside the local population.
Market/Regional Impact:
Relatively favorable tax policies in Indonesia/Bali continue to stimulate international interest despite increased regulation in recent years aimed at avoiding excessive speculation. Thailand remains flexible with its local incentives while protecting its residential fabric through indirect foreign restrictions.
In Singapore, the recent tax increase deliberately slows foreign influx to preserve affordable access for local residents facing international speculative pressures.
For any regional real estate investor:
Bali still offers attractive prospects today thanks to its relative tax flexibility compared especially to the drastic tightening recently observed among its direct neighbors.
Good to Know:
In Bali, real estate investment is affected by a 5% property transfer tax and no annual property tax, while neighboring countries like Thailand and Vietnam impose respective annual taxes of 0.01% and up to 0.15%. In comparison, Malaysia offers tax incentives for foreign investments with rates of 3 to 4% on real estate transactions for non-citizens. Tax exemptions in Bali are rare, limiting potential tax benefits, unlike Malaysia where first-time buyers benefit from special exemptions. The impact of these policies on the real estate market is significant: in Indonesia, recent reforms aim to attract more foreign direct investment; however, regulatory complexity may deter some investors. Overall, higher sales taxes in some neighboring countries, such as up to 7% in Thailand, offset lower property taxes, influencing the purchase decisions of investors seeking optimized returns.
Analysis of Real Estate Market Trends in Bali and the Region
Real estate prices in Bali have seen a notable increase in recent years, driven by local and international demand. In 2025, the average price per square meter in the city reaches about €1,603 (27,188,117 IDR), with variations between €955 and €2,867, depending on location and property type. This evolution is explained notably by growing tourist appeal, the rise of remote work, and the settlement of expatriates seeking an attractive living environment.
| Neighborhood / Locality | Price/m² Apartments | Price/m² Houses |
| Denpasar | 67,179,124 IDR (+1%) | 29,136,966 IDR (+7%) |
| Dalung | 54,119,505 IDR (–1%) | 34,363,676 IDR |
| Tabanan | 46,104,948 IDR | 28,796,174 IDR (+2%) |
| Gianyar | 42,682,786 IDR (+1%) | 32,676,338 IDR (+2%) |
The most sought-after neighborhoods remain Denpasar for its urban dynamism, Badung for its beaches popular with expatriates and foreign investors, and Ubud, which increasingly attracts thanks to its cultural reputation and natural tranquility. High-end downtown apartments are particularly in demand, as are villas with pools in tourist areas.
Real estate growth in Indonesia shows an estimated compound annual rate of about +5.8% until 2029. The massive arrival of digital nomad workers helps sustain this expansion pace while international investments continue to flow into the island.
Regional Comparison
| Country | Estimated Annual Growth | Regulation/Foreign Investment |
| Bali | +5–6% | Restrictions on full ownership; long-term leases preferred |
| Thailand | +3–4% | Direct purchase prohibited for foreigners for land; condos possible; mature market but increased competition in major tourist areas |
| Philippines | +6% | Strict limitation on foreign ownership (up to max. 40% condo); strong urban demand |
| Malaysia | +4–5% | Facilitated access for foreigners under conditions (minimum thresholds); Kuala Lumpur remains main driver |
Factors Influencing These Markets:
Future Forecasts
Experts anticipate a continuation of rising Balinese real estate prices driven by:
However, this dynamic could be moderated if saturation appears in certain premium segments or if the regional macroeconomic context deteriorates abruptly.
The Balinese real estate market should therefore remain very attractive in the coming years despite some structural challenges related to land and its regulation.
Good to Know:
In recent years, the real estate market in Bali has seen a significant price increase, particularly in sought-after neighborhoods like Seminyak and Canggu, where luxury villas and tourist residences are highly sought after. Comparatively, the markets in Thailand, the Philippines, and Malaysia show differentiated trends, partially influenced by varying regulations on foreign investment—Thailand, for example, imposes stricter restrictions on land ownership for foreigners. In Bali, tourism plays a crucial role, stimulating demand for tourist housing, while international investments support growth, recording an average annual increase of 5%. In contrast, Thailand benefits from a stable market supported by well-developed infrastructure. According to experts, although Bali’s popularity seems limited by its existing infrastructure capacity, investments in urban development could outline promising prospects, with anticipated growth rates of about 4-6% annually for ASEAN, varying based on the impact of global and local economic factors.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
