Buying property in Bali and Phuket: a guide for Australians

Can foreigners buy property in Bali?

Bali and Phuket are two of the most popular places in Asia for Australians to buy a holiday home or an investment property. Both are a short flight away, both have strong tourism, and both have property that can look inexpensive next to the Gold Coast or Sydney. Both also have ownership rules that work very differently from Australia's.

I owned a resort in Bali from 2011 to 2014, I speak Indonesian, and Kinnara, the property platform I founded, has an office in Phuket. Below is the general picture I'd want any Australian buyer to understand before signing anything. Laws change and every property is different, so treat this as background for a conversation with an independent local lawyer.

Indonesia doesn't allow foreigners to hold freehold land title, known as Hak Milik. That title is reserved for Indonesian citizens. Foreign buyers generally use one of three routes.

Leasehold (Hak Sewa)

Leasehold is the most common route in Bali. You lease land, or land with a villa on it, from an Indonesian owner for an agreed term, commonly measured in decades. The lease should be prepared and notarised through an Indonesian notary.

• A leasehold loses value as the remaining term shortens. A villa with ten years left is worth far less than the same villa with thirty.
• Extension terms matter. Get the price and conditions of any extension written into the lease rather than agreed verbally.
• Check that everyone with an interest in the land has signed, and understand what happens if the owner dies or sells.

Hak Pakai (right to use)

Hak Pakai is a right-to-use title that foreigners holding an Indonesian residence permit may be able to hold for a house or apartment. It runs for an initial term that can be extended and renewed, and minimum purchase prices apply, which vary by region. It generally suits people who live in Indonesia rather than occasional visitors.

PT PMA (foreign investment company)

A foreign-owned Indonesian company, known as a PT PMA, can hold a right-to-build title called Hak Guna Bangunan for business purposes, such as running villas as a rental business. A PT PMA is a genuine company with licences, capital requirements, tax filings and reporting obligations. It makes sense for a real business, and rarely for a single holiday home.

Avoid nominee arrangements

Some buyers are offered freehold land held in an Indonesian friend's or partner's name, backed by side agreements. Indonesian law does not recognise foreign ownership through nominees, and those side agreements may be unenforceable. If the nominee dies, falls out with you or sells, you could be left with nothing. I'd walk away from any deal that relies on one.

Can foreigners buy property in Phuket?

Thailand also restricts foreign land ownership. Foreigners generally can't own land in their own name, but there are established routes.

Condominiums and the foreign quota

Foreigners can own a condominium unit freehold, in their own name, as long as total foreign ownership in the building stays within 49% of the total unit floor area. That makes a condo the simplest route for most Australians. Check two things early:

• Whether units are still available within the building's foreign quota.
• That your purchase funds are sent into Thailand in foreign currency and documented properly by the receiving bank. The Land Office needs this paperwork to register a foreign-quota transfer.

Leasehold villas and land

For villas and houses, foreigners commonly lease the land. Thai law currently caps a registered lease at 30 years. Contracts often include options to renew for further terms, but renewal promises can be hard to enforce, particularly against a new owner or the owner's heirs.

Register the lease at the Land Office. An unregistered lease longer than three years is generally enforceable for three years only. Foreigners can own the building itself separately from the land, and a lawyer can explain how that ownership is recorded and protected.

Company structures and nominees

A Thai company that owns land must be majority Thai-owned. Using Thai shareholders as nominees to hold land for a foreigner breaches Thai law, and these structures attract scrutiny from the authorities. The advice is the same as in Bali: don't rely on them.

Due diligence for overseas property

The checks Australians take for granted at home, like a title search and a contract drafted by their own solicitor, still need to happen overseas. They just look different.

In Bali

• Verify the land certificate with the National Land Agency (BPN) and confirm the person leasing or selling is the registered owner.
• Check zoning. Some land in Bali is zoned for agriculture or green space, where villas or tourist accommodation aren't permitted.
• Confirm building approvals and that the building actually matches them.
• Check road access, water, power, and any disputes over boundaries or ownership.

In Phuket

• Check the title type. A Chanote is the strongest form of land title in Thailand, with surveyed boundaries. Other title types carry more risk.
• For a condo, review the building's juristic person accounts, common area fees and sinking fund.
• For an off-the-plan purchase, research the developer's completed projects and ask how your deposits are protected.

In both places

• Use your own lawyer, not one introduced by the seller, developer or agent.
• Get contracts in English and the local language, and know which version prevails if they differ.
• Walk the property and the neighbourhood in person, ideally more than once and in different seasons.

Good listings help at the search stage. I've written about how AI property search in Asia is changing that part of the process, but no search tool replaces legal checks on the ground.

Rental management and holiday letting rules

Many Australians buy planning to rent the property out when they're not using it. The numbers can work, but only if the property is legally allowed to be let short-term and someone reliable manages it.

Check the rules first. Thailand restricts short-term rentals in buildings that don't hold a hotel licence, so find out how a condo or villa is licensed before you count on nightly income. Bali requires licences for tourist accommodation, and unlicensed rentals carry real risk.

When choosing a manager:

• Understand the fee structure. Managers often charge a percentage of rental revenue plus costs, so know exactly what's included.
• Ask for sample monthly owner statements and speak to owners they already manage for.
• Plan for tropical wear. Humidity, salt air and heavy rain mean ongoing work on pools, timber, air conditioning and roofs.
• Expect seasonality. Build your plan on a realistic full year, not your best month.

Be cautious with guaranteed rental return schemes. A guarantee is only as strong as the company giving it, and the cost is often built into the purchase price. Read carefully what happens when the guarantee period ends.

Through Australasia Marketing, I've worked in high-end property development and holiday rentals across Asia since 2017. My view is that the quality of management shapes a rental property's results as much as the building itself.

Currency, tax and moving money

You're buying in rupiah or baht with Australian dollars, so exchange rates affect the price you pay, your rental income and your eventual sale proceeds. A weaker Australian dollar makes the purchase dearer. A weaker local currency cuts the value of your income when you bring it home. Compare rates and fees from banks and specialist transfer providers before moving large sums.

Australian tax residents are generally taxed on their worldwide income, so foreign rental income and capital gains need to be declared here. You may be able to claim a foreign income tax offset for tax paid overseas. Indonesia and Thailand also tax property income, transfers and sales under their own rules. Use an accountant who understands both sides, and read the ATO's guidance on foreign income.

Think about succession as well. Leases, titles and company shares overseas may need local wills or specific arrangements so they pass smoothly to your family.

Why independent local legal advice is essential

Almost every point above has exceptions, conditions or recent changes. Property law in Indonesia and Thailand is detailed, it changes over time, and it can be applied differently from one region to another. An Australian lawyer, however good, generally can't advise you on it.

An independent local lawyer should:

• Check title, zoning and approvals with the right government offices.
• Draft or review the contract to protect you, not the seller.
• Explain what you actually own, for how long, and what happens on a sale, a dispute or a death.
• Structure payments so funds are released at the right stage.

Independent means they act only for you. Agents and developers often recommend lawyers they work with regularly, and that's a conflict you don't need.

On Kinnara, listings are verified and our concierge service helps buyers with matching and finance. I'd still tell every buyer to have their own lawyer check the deal before any money moves. If you're also thinking about doing business in the region, I've shared what I've learned about doing business in Indonesia.

About the author

Adrian Campbell is an Australian entrepreneur based in Indonesia and the founder and CEO of Kinnara, a global property marketplace. He speaks Indonesian and has worked in property development and holiday rentals across Asia since 2017. Read his biography.

This article is general information only and is not financial or legal advice.