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Bali Villas - Holiday Homes?





Bali villa holidays are becoming increasingly popular as they offer a more individual, bespoke, tailored vacations with a lot more perceived status. But often the so-called villas of Bali are nothing more then private houses or holiday homes being unlawfully masqueraded as legitimate rentals.

Many foreigners have bought into the Balinese "villa" dream and built a holiday home on the island, and then rent it out to paying guests. The problem is that simply offering your own private holiday home out for rental is unlawful, as you need an Indonesian accommodations permit to offer accommodations legally. The problem is that it takes a foreigner a lot to get such a permit; they need to form a company for one and the only type of companies foreigners can be directors of in Indonesia are expensive to set up and operate; public companies! So foreigners either have to get local people they trust to own the private company that manages their "villa", or simply rent it out unlawfully. While BLTF genuinely sympathizes with foreign holiday home owners who want to rent their properties out, there are increasing problems and risks involved with that, especially for the guests. Plus the fact unlicensed villas do not pay tax and other charges which gives them a substantial unfair operational cost advantage over legal villas.

If a holidaymaker rents an unlicensed villa, there is a risk that the accommodations will be shut down by the authorities. Recently a large Indonesian workers union made its desire to have such businesses dealt with. There is also the risk of fraud. One holiday home owner in Bali, a nasty British citizen by the name of Paul Harvey, took 1000 dollars from a poor Australian woman enjoying "respite" (she has to care for her sick child all year which limits her earnings / wealth and means she only has once a year to live as other people do without having to care for her child, as her child is cared for by others during that respite period) as a deposit on a stay at his "villas"; Canggu Sunset Villas. Actually it is not clear if Paul Harvey was actually still the legal owner of Canggu Sunset Villas when he took this lady's deposit money. Unfortunately when she turned up for her holiday even though she had never been informed of an ownership change, the new owner of Canggu Sunset Villas would not let her stay. A lady who truly needed her holiday and did not have the resources to absorb such theft was left well and truly in the lurch. Despite being confronted at his new "villa" near Jimbaran, Paul Harvey refused to refund this lady's deposit and told her to "go away" using profanities. We have since been advised Mr. Harvey also cheats his builders so staying at any property connected with him and people like him in Bali may well be fraught with all kinds of risk.

Unlicensed and potentially dodgy villas are not just the domain of foreigner owners either, many unethical Indonesians own holiday homes on Bali they unlawfully rent out to tourists, even though it is much easier for them to get licence. Unfortunately the Indonesian middle class have possibly the worst reputation in the world when it comes to how they operate in business. By not licensing their private residences as villas, both foreign and Indonesian owners avoid having to charge tax thus making their rates unfairly more competitive then licensed villas; they also save on registration, accounting, etc. fees. If holiday home owners rent out rooms without licenses, they probably do not have tourism licenses for their vehicles either. All of this makes it unfair competition for the legal businesses and increases the risk to the guests as people who cheat in one respect are very likely to cheat in other respects too; be warned.

Having said that many foreign and some Indonesian private holiday home owners who rent their unlicensed properties out actually offer superb vacations and are very honest with people's money. BLTF believes it is unfair that foreign villa owners are at such a huge disadvantage in becoming fully legal in comparison with Indonesian owners of properties in Bali. BLTF has seen a suggestion that foreign owners of private holiday homes who feel unable to trust any Indonesians sufficiently to hand over control of their properties to private companies in Indonesia could consider forming holiday friends clubs in their home country, a kind of one-off fee based become the friend of the Bali holiday home owner club, where the owner allows their friends to stay at their home on holiday. Perhaps taking payments by Paypal (personal credit card processing) to help safeguard both themselves and their guests, and their guest's money. But even if this is legal, and we believe it is, it still means unlicensed villas have an unfair 20% cost advantage over licensed villas, as the former can not collect / pay Indonesian sales tax. So the ultimate solution has to be with the Indonesian government to help foreigners easily license their villas and pay taxes.

How do you spot an unlawful / unlicensed Bali villa?

It is easy, just ask them for their Pondok Wisata or Melati Hotel license number. If you walk into a villa in Bali they should display their licenses in clear view in their entrance, office or reception. If they tell you they are legal but do not have an Indonesian accommodations license, they are deceiving you, period. If you are booking through an agent they should be able to get that information for you; if they can not, we suggest you give them a wide berth! We have a list of villa agents on our Bali Reservations page who we are reliably informed offer only properly licensed villas and / or allow you to ask the villas directly to make sure first.

Properly licensed villas in Bali

Villas Subaliku
Apartments and villas at very reasonable prices bearing in mind the quality and location (very near the beach in Seminyak). These villas are fully licensed and 100% of the service charges paid by guests actually goes to the staff.

Villas Agung Bali Nirwana
Some of the very few true beachfront villas in Bali with something even rarer, a living coral reef offshore. True villa accommodation (these villas have their own western kitchens) but also offering beachfront restaurant and spa so guests can choose either self-catering or resort style services as they please. Part of the Indonesian Ministry of Fisheries "Biorock" project to protect and improve Bali's coral reefs; therefore excellent for divers and snorkellers alike. 100% licensed, environmentally friendly, the staff get 100% of any service charges paid (equally divided and nothing going to management), they work with and fund the local village on temple, etc. projects and their guest book (comments / reports made by guests) leaves you in no doubt they are very guest friendly too. If you book into their private villa resort using our sponsor site the price is the same and you contribute to a fund for free rooms at Agung Bali Nirwana for Bali's bomb victims and their families: Agung Bali Nirwana Reservations.

Please, if you know any more villas that should be listed here (please check the criteria on our Featured Bali Sites page), let BLTF know!