Buying Property in Bali: What Foreigners Can (and Can't) Do
Let's start with the hard truth: foreigners cannot own freehold land in Indonesia. This includes Bali. No exceptions, no workarounds that are fully legal and risk-free.
But this doesn't mean foreigners can't invest in Indonesian real estate. There are legitimate pathways—each with trade-offs. This guide explains your options honestly, covering the risks most agents won't tell you about.
Information Confidence
Land Rights Types
%
Source: Agrarian Law (UUPA) & PP 18/2021
Foreign Ownership Rules
%
Source: Government Regulations 2024
PT PMA Property Rules
%
Source: BKPM & Investment Regulations
Leasehold Practices
%
Source: Market practices + notary input
Current Market Prices
%
Source: Market data, varies by area
80-100%: High
60-79%: Good
40-59%: Moderate
0-39%: Low
The Fundamental Truth
Critical Legal Fact
Under Indonesian Agrarian Law (UUPA 1960), only Indonesian citizens can hold Hak Milik (freehold ownership) of land.
This is not a rule that can be bypassed with clever legal structures. Any arrangement claiming to give a foreigner "effective freehold" is operating in a legal gray area with significant risks.
Understanding this foundation is essential before exploring your options.
Understanding Indonesian Land Rights
UUActive
Indonesian Land Title Types
UU 5/1960 (UUPA) & PP 18/2021
Indonesia has multiple land right types with different ownership rules, durations, and transferability.
Your Legal Options
Find Your Property Pathway
Progress0%
What is your primary goal?
Option 1: Hak Pakai (Right to Use)
Hak Pakai
is the most legitimate way for foreigners to hold property rights in
Indonesia.
Who Can Get Hak Pakai?
Foreigners with:
KITAS (work, investor, spouse, retirement)
KITAP (permanent resident)
Second Home Visa (5-10 year)
Diplomatic/consular status
How It Works
Find property with clean Hak Milik certificate
Negotiate purchase with owner
Convert from Hak Milik to Hak Pakai (landowner releases Hak Milik; you receive Hak Pakai)
Register at local Land Office (BPN)
Hak Pakai Terms
Duration and extension rules for Hak Pakai
Feature
Initial Term
First Extension
Second Extension
Total Maximum
Duration
30 years
+20 years
+30 years
80 years
Requirements
Valid visa, property min. values
Valid visa, land still in use
Valid visa, land still in use
Must maintain valid visa status
Process
Registration at BPN
Apply before expiry
Apply before expiry
Multiple extensions
Hak Pakai Minimum Values
Government regulations set minimum property values for foreign Hak Pakai:
Location
House/Villa
Apartment
Bali
IDR 5 billion
IDR 2 billion
Jakarta
IDR 5 billion
IDR 3 billion
Other major cities
IDR 3 billion
IDR 1 billion
Other areas
IDR 2 billion
IDR 750 million
Values as of PP 18/2021 - verify current requirements
Pros and Cons
Advantages:
Legitimate, legally recognized
Can mortgage property
Can sell or transfer
Long term (up to 80 years)
Registered at Land Office
Disadvantages:
Requires valid long-term visa
Minimum value requirements
Conversion costs
Not true freehold
Must extend periodically
Option 2: Leasehold (Hak Sewa)
Leasehold is a contractual arrangement where you rent land from an Indonesian owner for an extended period.
How Leasehold Works
Find landowner with Hak Milik willing to lease long-term
Negotiate lease (typically 25-30 years)
Pay lease upfront (common practice)
Build or buy the building on the land
Notarize contract and optionally register
Leasehold Property Process
Steps to acquire a leasehold villa in Bali
2-4 months
Rp 0
6 steps
1
2
3
4
5
6
Leasehold Tips
Good leasehold contracts include: - Clear term and extension options
(e.g., 25+25+25 years) - Building ownership clause (you own structures) -
Compensation formula if not renewed - Prohibition on owner selling during
lease - Right to sublease (for rental business) - Clear exit/buyout provisions
Pros and Cons
Advantages:
No minimum investment
No visa requirement
Simpler than Hak Pakai
Can build your own villa
Lower entry cost
Disadvantages:
Weaker legal protection
Contract-dependent rights
Landowner keeps Hak Milik
Renewal not guaranteed
Harder to sell/transfer
Option 3: PT PMA Ownership
A PT PMA (foreign investment company) can hold property rights through HGB (Building Rights).
When PT PMA Makes Sense
Villa rental business
Property development
Commercial property needs
Multiple property investment
Estate planning (company shares easier to transfer)
How It Works
Establish PT PMA with appropriate KBLI codes
Company acquires HGB on land
Build or buy property through company
Company operates rental or development business
You control through shareholding
PT PMA Property Investment Calculator
Estimate total costs for PT PMA property structure
Default Inputs
Property Value
8,000,000,000 IDR
Property Type
Existing villa/building
Already have PT PMA?
No
Location
Seminyak/Canggu (premium)
Estimated Result
Property AcquisitionRp 8.000.000.000
PT PMA EstablishmentRp 65.000.000
Legal & Notary (2.5%)Rp 200.000.000
BPHTB Transfer Tax (5%)Rp 396.000.000
HGB RegistrationRp 15.000.000
Pros and Cons
Advantages:
Strongest foreign structure for business
Clear legal ownership through company
Can operate rental business legally
Shares transferable (exit strategy)
Multiple properties possible
Disadvantages:
High setup cost (IDR 10B+ investment)
Ongoing compliance requirements
Corporate tax on rental income
Annual reporting obligations
More complex structure
What to Avoid: The Nominee Trap
ILLEGAL: Nominee Arrangements
A "nominee" structure is where an Indonesian holds Hak Milik in their name, but you're the "real" owner through side agreements.
This is ILLEGAL under Indonesian law. Article 26(2) of the Agrarian Law voids any arrangement designed to circumvent foreign ownership restrictions.
Risks:
The nominee legally owns everything
Side agreements are unenforceable
Nominee can sell without your consent
You have no legal recourse
Criminal penalties possible for both parties
No matter how much you trust someone—don't do this.
Every year, foreigners lose properties because:
The "trusted" nominee dies and family claims property
The nominee divorces and spouse claims property
The nominee has debts and property is seized
The nominee simply decides to keep it
There is no safe nominee structure. Anyone telling you otherwise is either uninformed or dishonest.
Due Diligence Checklist
Property Due Diligence
0 of 14 completed0/11 required
Costs and Taxes
Cost Item
Rate
Notes
BPHTB (Transfer Tax)
5% of (sale price - IDR 80M)
Paid by buyer
PPh (Income Tax)
2.5% of sale price
Paid by seller
Notary/PPAT Fees
0.5-1%
Negotiable
Legal Fees
1-2.5%
Depends on complexity
PBB (Annual Property Tax)
0.1-0.3% of NJOP
Paid yearly
HGB/HP Conversion
IDR 10-20M
At Land Office
Negotiate Costs
In practice, who pays what is negotiable: - BPHTB is technically buyer's
responsibility - PPh is seller's responsibility - Notary/legal can be split -
Always clarify in advance
Have Questions?
Property investment in Bali is complex. If you have specific questions about your situation:
This guide is for informational purposes only and does not constitute legal
advice. Property law is complex and individual circumstances vary. Always
engage qualified legal professionals before making property investments. Last
updated: January 2026.
Due Diligence
Rp 10.000.000
Estimated total
Excludes renovation, furniture, and ongoing operational costs
Rp 8.686.000.000
Buying Property in Bali as a Foreigner: 2026 Legal Guide
