Home Tips 9 Tax Benefits of Investing in Bali Real Estate

9 Tax Benefits of Investing in Bali Real Estate

Source: bali-home-immo.com

Reallocating your finances and investing in certain fields is the best way to make money today. Real estate is especially a good option since it does not lose in value but is constantly growing. While you can rent the property in the meantime, it is surely a great way to make it pay for itself.

As a destination that attracts a large number of tourists every year, Bali is one of the best options for investing in real estate. With strong and constantly rising tourism, you can surely expect high returns and big profits.

In this article, we’ll talk about the tax benefits of investing in Bali’s real estate. In addition, you will learn why is Bali a great destination to invest in property and have an opportunity to earn a lot. Keep reading and find out.

Why is Bali a great area for property investments

To understand why should you consider investing in this destination, besides the tax benefits there are other things as well. For that reason, we prepared a short list of things that makes this investment such a great idea.

1. Popular destination

Source: endlesslyjetlagged.com

As one of the destinations that are on the bucket list for many individuals, you know what benefits come with that fact. While your property will constantly rise in value, you have unlimited opportunities to rent it whenever you are not using it.

Depending on the location you select, as well as the luxury of the property, the renting value can be significant. With that, you can repay the investment which is surely a great thing.

2. The market is stable and offers great returns

With great locations where you can combine nature and the busy nightlife, there are many properties you might consider. Depending on your goals, whether you want something busy and in a popular location, or something quieter for great relaxation periods, Bali can offer that.

The market is stable, and you can expect to return the initial investment in less than six years. However, if you plan on keeping the property as your paradise spot where you can go whenever you want, that is surely an option as well.

According to www.penidaland.com, finding the Bali Real Estate spot you desperately wanted is not easy without working with domestic professionals. With knowledge of all the laws needed for secure purchase and all the areas where the property is being sold, you will surely find the best deals.

3. The costs are less than in other parts of the world

Source: fau.edu

The costs for property in Bali are usually less than in other exotic parts of the world. With that being said, you can expect to purchase a larger land or a more luxurious property for a significantly smaller financial amount.

This makes you enjoy the luxurious lifestyle better and more affordable, especially when you get to return the investment that quickly. That is why most people are quick to purchase another property as soon as they get the returns of the first estate.

By investing in Bali’s real estate, you are a step closer to reaching financial stability. Not only that you get your wealth up, but you can enjoy your time inside your investment, unlike investing in something that you cannot feel or touch.

4. The politics are adjusted for businessmen

To gain the attention of foreign investors, the government did everything to ease the investment process in Bali. Since investing in their country helps economically, promoting real estate investments is one of their politics.

Bear in mind that you cannot own the property unless you are a citizen. However, with various methods, such as purchasing in the name of your company you can purchase and use the land without problems. Just be sure you are working with established Indonesian companies to maintain the security and satisfaction of your purchase.

5. Minus the expenses

Source: cekindo.com

What makes investing in property great is that you can constantly minus the tax expenses. To deduct, you will have to gather all the expenses collected during the year such as insurance, interest from the mortgage, and certain taxes.

In addition, the expenses of reparation and maintenance are also included, so you can combine them in the deduction process as well. Although these were common expenses, many people do not know they can minus the expenses of the office lease, advertisements, and equipment. Since you are planning on purchasing property in Bali, you can deduct the traveling expenses as well.

This makes the tax costs significantly less, which means more finances in your account. It is rare to find another field that offers such an option, so keep this in consideration.

6. The costs are depreciating with time

With a time of using the property, it loses in value because of the assumed damages of use. Although the loss is not significant, you should use the depreciation to lower your tax expenses. Depending on the initial value of the property, as well as its age, you can save more than ten thousand dollars in a year.

However, when you consider selling the estate, bear in mind that you will have to pay taxes for income due to the depreciation. However, that can be avoided by the use of certain strategies and methods.

7. Minus the costs of using a business

Source: forbes.com

Since you are purchasing land by using a business located in Indonesia as the legal owner. You are not receiving a personal return, but that is described as the profit of the business. Because the rates for the business are lower, you can expect tax cuts of more than five thousand dollars.

However, be sure to consult with your accountants as well as people from Indonesia to interpret the laws properly to avoid certain situations.

8. Use the capital gains in your favor

Sometimes you might have no other choice and have to sell the property in less than а year. This is described as short-term or quick gain and is calculated as regular income. Depending on the value, it can put you in the next bracket so you’ll have to pay more in taxes than now.

For that reason, be sure to wait at least a full year to describe your gain as a long-term. This has better rates and you’ll need to pay significantly less in taxes which is always beneficial.

9. Use certain programs

Source: entrepreneur.com

The use of certain programs can help you avoid paying the tax expenses. For example, there is a program where if you sell the initial property and replace it with a larger and more expensive one, you don’t have to settle the taxes.


When there is an option to settle smaller tax amounts, while keeping your income you should not think a lot. Especially when it comes to a destination such as Bali, which everyone tends to visit at least once, the returns are extremely quick.

However, investing as a foreign person brings certain challenges, so be sure to work with an established Bali firm. That will help you minimize the risks, and enjoy your property purchase to the fullest.