What does it cost to own a villa in Bali each year?
On a rented villa, running costs take 40 to 50 percent of gross income before income tax. The biggest cost never appears on a bill: the value a lease loses every year.
What does it cost to own a villa in Bali each year? On a villa you rent out, running costs take 40 to 50 percent of gross income before income tax. On top of that sits the cost almost nobody budgets: the value a lease loses every year.
Here is the full list. For the one-off costs when you buy, see the hidden costs of buying.
The yearly costs of a rented villa
| Cost | Typical size |
|---|---|
| Management | 15 to 25 percent of gross, up to 35 percent full-service with staff |
| Platform commission | around 15.5 percent on Airbnb's host-only fee, on top of management |
| Regional accommodation tax (PB1) | 10 percent |
| Income tax on rental | 10 percent final for a resident individual |
| Maintenance | 10 to 15 percent of gross, more on an older villa |
| Capital reserve | 10 to 15 percent of gross, for pools, roofs, aircon and furniture |
| Pool | around USD 100 to 200 a month before anything breaks |
| Staff | cleaner, pool and garden as a minimum, all year round |
| Utilities | electricity with aircon and a pool pump runs higher than most models |
| Land and building tax (PBB) | roughly 0.1 to 0.5 percent of assessed value, small |
| Insurance | building, contents and liability, more expensive than buyers expect |
Some of these overlap depending on what your management agreement includes. Read what to check in a management agreement before you compare quotes.
What that looks like on a real villa
A typical two-bedroom villa grosses roughly USD 20,000 to 22,700 a year at island-average occupancy. Running costs of 40 to 50 percent take USD 8,000 to 11,000 of that, before income tax.
That is why an advertised 8 to 15 percent gross yield usually lands at 4 to 6 percent net on average stock. Prime, well-run villas do better. See the real yield numbers.
Free PDF
The Bali Rental Income Guide
What a Bali villa really earns: the licences you need to rent it out, the tax on rental income, management fees, occupancy, and the yield that is left at the end.
- Licences you need to rent legally
- Tax on rental income, explained
- Management fees and occupancy
- Net yield, not the brochure number
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The cost that never appears on a bill
Every title a foreigner can hold runs for a fixed term. When it ends, the land and the building go back to the owner.
So the term itself is a yearly cost:
- USD 300,000 on a 25-year lease: about USD 12,000 a year
- USD 300,000 on a 30-year lease: about USD 10,000 a year
It never shows on a statement, and on many villas it is the largest single cost of ownership. A strong, priced extension clause reduces it. A weak one does not.
If you do not rent it out
A villa used only as a holiday home carries most of the same costs, staff, pool, utilities, maintenance, insurance, tax and the cost of the term, with no income to offset them. Buildings here also deteriorate faster when they stand empty. If you will not rent, budget the running costs as a fixed yearly amount and decide whether that beats renting when you come.
The first year costs more
Expect the first year to return well below the steady state: defects the inspection missed, fit-out gaps, and a new listing that ranks below villas with hundreds of reviews. See what happens in your first year.
How to keep running costs down
- Buy newer or renovate properly before renting. Older stock costs more every year.
- Put a performance clause in the management agreement, with reporting and notice terms.
- Fund the capital reserve from the first booking, so repairs never get deferred.
- Compare your rate and occupancy with four similar villas every quarter.
- Visit unannounced in the first six months.
Common questions
How much does it cost to maintain a villa in Bali?
Budget maintenance at 10 to 15 percent of gross rental income, plus a capital reserve of another 10 to 15 percent for pools, roofs, aircon and furniture. A pool alone costs roughly USD 100 to 200 a month to run before repairs.
What are the running costs of a villa in Bali?
On a rented villa, management, platform commission, regional tax, staff, utilities, maintenance, insurance and a reserve take around 40 to 50 percent of gross income before income tax.
How much is property tax on a villa in Bali?
The annual land and building tax, PBB, is roughly 0.1 to 0.5 percent of assessed value. Rented villas also charge the 10 percent regional accommodation tax on stays, and rental income is taxed separately.
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