Buying property in Bali from Malaysia: ownership, Bank Negara rules and tax

What a Malaysian buyer can hold in Bali

ASEAN membership doesn't open Indonesian freehold. The Basic Agrarian Law (5/1960) keeps Hak Milik for Indonesian citizens, so a Malaysian buys like any other foreigner: a registered leasehold, Hak Pakai after moving to Indonesia with a residence permit, or a PT PMA, a company with foreign shareholders that can hold a right to build.

Leasehold dominates, and it's the structure behind almost every listing we carry. Any extension needs a clause in the contract, with a price. The registered Hak Pakai title is only open to houses worth Rp 5 bn or more, a floor set in 2022. Our page can foreigners buy property in Bali? sets the three routes side by side.

Treat any nominee offer as a warning sign. Indonesian courts treat land held for you by a local as never transferred, and the money is gone.

Bank Negara's rules on investing abroad

Whether you face a limit depends on your borrowing. A resident individual with no domestic ringgit borrowing can invest abroad in any amount under Bank Negara Malaysia's Foreign Exchange Policy. With such borrowing, conversions for investment abroad are capped at 1 million a year in Malaysian currency, about Rp 4.37 bn at the rate Bank Indonesia set on September 24, 2026.

Two details decide most cases. One housing loan and one car loan don't count as domestic ringgit borrowing. A Bali villa bought as an investment counts toward the limit, while property bought for your own or your immediate family's accommodation abroad for study, work or migration falls outside it. Ask your bank how it classifies your purchase before the first transfer.

Source: Bank Negara Malaysia, Foreign Exchange Policy Notice 3, Part A; HSBC Malaysia, FEP FAQ; StashAway, What is domestic ringgit borrowing; Bank Indonesia, kurs transaksi, September 24, 2026

Sending money: ringgit to rupiah without a third currency

Bank Indonesia's rupiah rule applies to every payment made inside the country, so each stage of the price is wired and converted before it reaches the seller's Indonesian account. Malaysia has a shortcut. Under the Local Currency Settlement framework between Bank Negara and Bank Indonesia, running since December 11, 2017, appointed banks convert ringgit to rupiah directly. Since August 2, 2021 it has covered individuals and direct investment too.

For small payments on the island, a Malaysian banking app with DuitNow can pay any QRIS code in Indonesia. The link has run commercially since May 8, 2023. Use it for bills, not a deposit. Leaving Malaysia with cash worth more than 10,000 in US currency, roughly Rp 179 million, requires a customs declaration. Indonesia's own threshold on arrival is Rp 100 million.

Once the withholding is done, you can send the rent out without limits. Our transfer guide compares wire fees and how long each route takes to deliver.

Source: PBI 17/3/PBI/2015; Bank Negara Malaysia, Expansion of the LCS framework with Bank Indonesia, 2021; Bank Indonesia press release on the LCS framework; Bank Negara Malaysia and Bank Indonesia, cross-border QR payment linkage, May 8, 2023; BNM, currency declaration requirement; Law 24/1999

Tax on the rent: 20% in Indonesia, exempt in Malaysia

Indonesia collects first. It withholds PPh 26 at 20% from what guests pay, before costs, if the owner lives abroad. The Indonesia–Malaysia tax agreement, signed September 12, 1991, gives Indonesia that right in Article 6. On nightly lets, guests also pay a 10% regional tax.

Since January 1, 2022, Malaysia has exempted resident individuals from tax on foreign-sourced income they bring home. Budget 2025, presented on October 18, 2024, extended the exemption from 2026 to December 31, 2036. The condition is that the country the income came from has taxed it, which Indonesia always does with rent, and you still declare it as exempt income on your return.

Companies follow other rules, so a Malaysian company receiving the rent needs its own advice. Our rental income tax guide explains who withholds and by when.

Source: Indonesian Income Tax Law, Article 26; Indonesia–Malaysia DTA, 1991, Article 6; KPMG GMS Flash Alert 2024-237, December 4, 2024; The Edge Malaysia, Budget 2025 coverage; EY, FSI exemption orders gazetted, July 20, 2022

Selling the villa, and what happens to your estate

Malaysia's capital gains tax, in force since January 1, 2024, applies to companies, LLPs, trusts and co-operatives, not to individuals. Real property gains tax covers only property in Malaysia. A Malaysian individual selling a Bali villa owes nothing at home on the gain.

Indonesia taxes the sale at the notary: a final 2.5% on the price of titled property (PP 34/2016), with separate rules for a leasehold assignment. Malaysia has had no estate duty since November 1, 1991, but the villa still passes under Indonesian rules, so your will and the lease both need to name what happens to it. We itemize exit costs on our page about selling a Bali villa.

Source: EY Malaysia, Malaysia's new CGT regime, January 24, 2024; BDO, Malaysia CGT; PwC Worldwide Tax Summaries, Malaysia, other taxes; PP 34/2016; The Edge and The Star on estate duty, 2024

A three-hour flight to your shortlist

Malaysian passports get 30 days in Indonesia without a visa, and that stay can't be extended or converted. Every visitor also pays Bali's Rp 150,000 tourist levy. With around 108 direct flights a week from Kuala Lumpur and about three hours in the air, Malaysians made 251,160 trips to Bali in 2025, according to BPS Bali.

Use a first trip to compare two or three areas. Our area guides explain where nightly rentals work and where quieter long stays do, and every property in the catalog comes with a lease term and an estimated net return. For a managed villa, our model gives 6–10% net a year after Indonesian tax.