Bali vs Spain Property for Foreign Investors

Spain allows any foreign buyer, including US and UAE nationals, to own residential property as full freehold in perpetuity. No leasehold term, no company structure, and no residency permit is required. In Bali, the Basic Agrarian Law reserves Hak Milik (freehold title) for Indonesian citizens only. Foreign buyers must use a leasehold arrangement (typically 25 years with an optional renewal) or set up a PT PMA company to hold a Hak Guna Bangunan title. Spain's ownership model is simpler and more liquid.

Entry prices differ sharply. Marbella property averaged roughly EUR 4,400 to EUR 5,500 per square metre by early 2026, up 8.1% in 2025 according to Knight Frank's PIRI 100 index. A modest villa on the Costa del Sol starts around EUR 1 million. Bali off-plan villas can be acquired for far less in US dollar terms, with leasehold product in the Tabanan area priced from around USD 200,000. Purchase taxes in Andalusia run 7% ITP on resale property, or 10% IVA plus 1.2% stamp duty on new builds. In Bali, the buyer pays BPHTB at 5% of the acquisition value while the seller covers PPh Final at 2.5%.

Rental yield is where Bali holds its clearest advantage. Prime villa areas such as Canggu typically produce gross yields of 7% to 15% depending on occupancy, management, and season. Marbella and the wider Costa del Sol deliver more in the range of 4% to 7% gross for villas, with the luxury segment at the lower end. Net returns in both markets fall after management fees, local taxes, and vacancy. These are illustrative ranges, not guarantees. This is general information, not financial advice.

Annual taxes are higher in Spain for non-EU owners. Rental income from Spanish property is taxed at 24% of gross income for non-EU residents with no expense deductions, per Spain's tax authority AEAT. Owners of vacant Spanish property also pay an annual imputed income tax. IBI council tax runs 0.4% to 1.1% of the cadastral value each year. A progressive wealth tax applies to Spanish-situs assets above EUR 700,000. In Bali, rental income is taxed at a flat 10% final withholding tax, PBB land tax is minimal, and there is no wealth tax on foreign-held property.

On short-term rentals, Malaga city froze new tourist rental licenses until August 2028 under a 2025 municipal moratorium. Marbella continues to issue licenses but now requires a 3/5 majority approval from the building's community of owners alongside a national registry registration. Bali requires a Pondok Wisata permit and local zoning compliance, but the licensing path remains open across most areas including the Tabanan corridor near OMA Townhouse. A local lawyer in each market is essential before signing.