Holiday letting is at the heart of most investment projects in Bali. Since 2026, it can no longer be improvised. Here is what it takes to rent legally.
Quick answer
- Check the NIB and the operator's authorisations before considering a holiday rental.
- A foreigner cannot personally hold a tourist accommodation licence.
- The licence is held by the Indonesian lessor, the development's operator or a PT PMA.
- Local taxes must be built into any return projection.
A villa project in Bali? Ask Mago your question on WhatsApp, in English.
Ask my question on WhatsApp1. Check that the accommodation is compliant
The Ministry of Tourism's press release of 26 May 2026 distinguishes between the removal of unauthorised accommodation and a future automatic verification system with the platforms. That system is to check, in particular, the NIB, the KBLI and the NKU; its launch is announced as a target for June 2027. This announced timetable does not allow anyone to claim that the system was already in general use on 31 March 2026.
A listing on a platform does not prove that it is compliant. Ask for the authorisations and the identity of the operator before settling on a rental scenario.
2. What you need
A villa legally rented to tourists generally combines:
- Compatible zoning: the plot must allow tourist activity.
- A building permit (PBG) that matches the actual use of the building.
- A certificate of conformity (SLF) confirming that the building meets the standards.
- A business registration (NIB) with the correct activity code.
- An accommodation licence suited to the holder.
- Tax numbers and regular filings.
3. Who can hold the licence?
This is the point many buyers are unaware of: a foreigner cannot personally hold a tourist accommodation licence in Indonesia. There are three scenarios:
- Leasehold with an Indonesian lessor: the licence can be held by the landowner, depending on the contract.
- Managed development: the operator or developer holds the licence and manages the villa on your behalf.
- PT PMA: your company holds the licence and operates directly.
In the first two cases, the contract must specify how income is shared, who is responsible for what, and what happens if the operator ceases trading.
4. Rental taxation
Villas operated as short-term rentals are subject to several levies, including a regional accommodation tax (around 10% of turnover), a rental income tax, the annual land tax and, above a certain threshold, VAT. Platforms do not always remit these taxes on your behalf.
A return simulation that ignores these amounts overstates the yield.
5. Penalties
Fines, removal of listings, demolition of buildings without a permit and, for foreigners, the risk of deportation and an entry ban. The authorities showed in 2025 that they enforce these measures.
What to ask for in writing before reserving
- The zoning of the plot
- The number and date of the building permit
- The entity that will hold the licence and the timeline for obtaining it
- The management model and the operator's fee schedule
Frequently asked questions
Is Airbnb banned in Bali?
No. Listings must, however, correspond to registered and licensed accommodation. Non-compliant listings can be removed.
Can I rent out my villa in my own name?
No, a foreigner cannot personally hold the licence. It is held by the lessor, the operator or a PT PMA.
Which taxes apply to rental income?
In particular a regional accommodation tax, a rental income tax and the land tax. Have the calculation validated by a local tax adviser.
Official sources checked on 4 October 2026
Mago Kitaev, licensed real estate broker in Dubai (RERA, BRN 82528), based in Business Bay. A former project manager in banking and IT, he has been advising French-speaking investors since 2024. See his background
This article is for information purposes and was updated on 28 September 2026. It does not constitute legal, tax or financial advice. Indonesian regulations change frequently: have every project checked by an independent PPAT notary and an independent lawyer.