New rules in rental business in Bali

Following news of a potential Airbnb ban in Bali, the Indonesian Ministry of Tourism has officially confirmed: there are no plans to shut down online booking platforms.

However, the government is tightening oversight. The primary goal is to ensure that villa and apartment owners operate legally, pay their taxes, and obtain the necessary licenses. For investors, this is a crucial signal: the market is not closing, but it is becoming more regulated.

How Many Bali Properties Operate Legally?

There are approximately 378 officially registered hotels on the island. Meanwhile, Airbnb and other platforms list around 16,000 properties, including villas, guesthouses, and apartments.

A significant portion of this market operates in the “grey zone”—lacking a full set of permits and failing to comply fully with tax requirements. This is precisely the segment now under the government’s microscope.

Deadline: March 31, 2026

The government has set a firm deadline: by March 31, 2026, all accommodations listed on online platforms must comply with legal requirements.

If a property is not properly registered:

• Listings may be removed from Airbnb, Booking.com, and other platforms.
• Owners may face significant fines.
• The risk of tax audits and claims increases.

For tourists, nothing changes for now—villas remain available for booking. But for property owners, the rules are getting much tougher.

Why Just Opening a PT PMA is Not Enough

Many investors believe that registering a company and opening an Airbnb account is sufficient. In practice, this is not the case.

While business registration requires:

• Constitutional documents (Deed of Establishment, SK).
• Registration via the OSS system.
• Obtaining a Business Identification Number (NIB).

Short-term rental is classified as “accommodation services,” not merely “property operation.” If a property is registered as residential real estate, you cannot rent it out daily via a PT PMA without a specific hotel license.

Requirements for Legal Short-Term Rentals

Once a villa enters the short-term rental market, it must meet accommodation facility requirements. Depending on the business model, you may need:

• Sertifikat Standar (Standard Certificate).
• PBG (Building Approval for commercial use).
• SLF (Certificate of Fitness for Occupation and Safety).
• Registration with local authorities.
• Enrollment for PHR tax payments. Choosing the correct activity code (KBLI) is critical here.

PHR Tax: 10% of Turnover

Almost all short-term rentals in Bali are subject to the local Hotel & Restaurant Tax (PHR) at a rate of 10% of revenue.

Important to note:

• Airbnb does not withhold this tax.
• The platform is not a tax agent.
• The owner is responsible for self-registration and paying PHR. The Airbnb commission is not a tax and does not replace your obligations to the state.

Working Strategies for Investors

In practice, several legal models are commonly used:

1. Commercial Property Registration: The villa is officially categorized for guest accommodation with a full suite of licenses. The company pays PHR, and Airbnb acts as a sales channel.
2. Indonesian Company (PT PMDN): The PT PMDN acts as the owner or official lessor, legally renting the property short-term. This scheme is often used in partnership models.
3. Management Company (The most popular model): The owner is an individual or a PT PMDN. The PT PMAacts as the management structure handling marketing, Airbnb listings, booking management, and guest support. The PT PMA’s income is generated as a management fee, rather than rental income, reducing legal risks for foreign entities.

What This Means for the Bali Market

This is not negative news, but rather a sign of market maturation.

• ✅ Online platforms are not banned.
• ✅ Short-term rentals remain legal.
• ❌ The “grey” model is gradually disappearing.

In 2026, the winners will be owners who have built transparent business structures in advance.

Key Takeaway for Investors

If you plan to buy a villa in Bali for rental purposes:

• Consider not only the yield but also the legal model.
• Ensure the correct KBLI.
• Focus on licensing and taxation.

Regulation is increasing, and properties with transparent structures will be more liquid and resilient to risks.

What are the Consequences?

If restrictive measures are enforced, investors operating “in the white” will benefit. They will no longer have to compete with properties that offer lower prices by evading taxes.

However, looking at the bigger picture, this could potentially reduce the tourist flow to the island. Such a trend could negatively impact small and medium-sized businesses, which are typically owned by the local population.

About the Author

My name is Daniel, and I am a real estate broker in Bali with over 15 years of experience. I see how many people dream of living on this beautiful island, combining an active lifestyle with comfortable living. If you have any questions or would like to share your experience in managing property in Bali, feel free to leave comments. I’ll be happy to answer your questions and help you in your search for the perfect home! Follow for more on our Instagram.