Bali Officials Cracking Down On Illegal Holiday Villas

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Officials from the Badung Indonesian Hotel and Restaurant Association (PHRI) have confirmed that they are working in partnership with the Bali Tourism Office to crack down on illegally operating holiday villas in the Canggu and Berawa areas.

Officials in Bali affirmed last month that tourists must stay at accommodation that is a legally registered business.

Whether a hotel, hostel, guesthouse B&B, or private villa, tourists in Bali are only permitted to stay at premises that are operating as legal accommodation businesses. 

In late May, Governor Koster called a meeting to discuss with regency leaders their responsibility to crack down on illegally operating accommodation businesses on the island.

Koster was concerned that a rise in illegally operating accommodation businesses would result in tax losses for the regency and provincial government.

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Governor Koster told regency leaders and invited reporters that “there are many illegal villas in Bali, there are even homestays where many tourists stay, and the hotel-restaurant tax is not imposed.”

He continued to say, “This is detrimental. That’s why the regents and mayor have been asked to file records of illegal villas and homestays.”

At the time of the accountant, it was speculated that officials, including the civil service (Saptol PP) and the likes of the PHRI and Tourism Office, could conduct raids on properties suspected of operating outside the law.

Regency leaders have given instructions to village leaders and business owners, as well as a short grace period to get their paperwork in order. Now, it seems officials in Badung are ready to investigate any businesses operating outside the law and hold them to account. 

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There are nine regencies in Bali; Badung Regency is the most popular tourist area of the island, home to resorts like Canggu, Seminyak, Kuta, and Uluwatu. 

Speaking to the press, the Head of PHRI Badung I Gusti Ngurah Rai Suryawijaya has revealed that a special team will be deployed in the coming days and weeks to crack down on fraudulently operating villas, guesthouses, and hotels in the regency.

Suryawijaya confirmed that the target areas are Canggu and neighboring Berawa and Pererenan and down on the Bukit, Uluwatu and neighboring Pecan.

It is worth noting that both these areas are in the midst of a development boom, with new holiday villas opening up for booking every week. 

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According to Suryawijaya, as much as 30% of the villas and guesthouses in Badung Regency are thought to be operating without permits.

He confirmed that the team will conduct spot checks on those properties suspected of breaking the law.

He added, “We will go sweeping. There is a schedule, but it’s a secret. Later we will [clarify] it with a special team.”

Part of the reason why officials in Bali want to crack down on illegally operating villas on the island is due to ‘tax leakage’, but it is also part of their mission to keep a closer eye on foreigners on the island.

Suryawijaya shared his suspicion that many of the long-stay foreigners, like digital nomads and those ‘living’ on the island on temporary socio-cultural visas, may be staying at these unregistered villas.

While it is fundamentally the responsibility of the villa and guesthouse owner to have their paperwork in order, officials need to have a paper trail as to where each tourist on the island has stayed or is staying. 

Tourists who stay at a formally registered hotel or accommodation will have their passport details recorded and available for the authorities to review on request.

Long-stay visitors, like digital nomads, who are renting a private villa from a business or local family should be registered with the local authorities so that should there be any issue with the police or immigration, the auditories know where to find the individual.

If in doubt or concerned, tourists check with the hotel staff or villa owner/manager/support staff and ask to see business permits which in most accommodation outlets will be visible at the reception already. 

For the vast majority of tourists and even long-stay visitors staying in Bali, these upcoming raids are nothing to worry about.

The raids, or spot checks, appear to be focused on business owners not paying taxes, though if a special operation team comes to visit, they may wish to check passports, visas, and travel plans.