Buying property in Bali can be confusing between all different articles you can read. This article sheds light on how to buy a property in Bali and Indonesia and how to proceed.

Key Takeaways

  • Foreigners can securely invest in Bali real estate through leasehold, Hak Pakai, and HGB titles, with each option offering unique benefits.
  • Investors must navigate legal aspects diligently, such as setting up a PT PMA company for legal entity status, performing due diligence, understanding taxes and fees, and working with real estate professionals to ensure a secure and profitable purchase.

Understanding Property Ownership Options in Bali

villa for property investment in Bali

Understanding the property ownership in Bali can seem confusing, but a clear grasp of the different opportunities available is key for those looking to purchase property.

Foreign investors have access to several types of property titles like leasehold, Hak Pakai (right to use) and HGB (right to build), each presenting distinct advantages and constraints.

In contrast, owning land on a Hak Milik is an option that only Indonesian citizens are entitled to. It’s crucial for foreign buyers to comprehend these nuances in order to make informed choices regarding their investments in property.

1. Leasehold Properties for Foreigners

Leasehold properties provide foreigners with a reliable and stable option for investment. Individuals, Foreigners or companies can lease a property. The party selling the leasehold is called Lessor while the buyer is called Lessee.

  • A leasehold has no maximum duration as a court in Jakarta has recognized a leasehold for 100 years. Historically buyers are looking to buy a leasehold for a period of 25 to 30 years despite some can request a shorter or longer duration.
  • A leasehold can be signed in front of a notary or between 2 parties without a notary
  • A leasehold is a private contract between two parties. The clauses have to respect the Indonesian regulation
  • A leasehold contract should be reviewed by a legal or lawyer to make sure all clauses are protecting your rights

On a leasehold, the buyer doesn’t become the owner. The owner is still responsible for the land and building tax. The buyer has to make sure each clause on the contract cannot be used for a cancellation of the agreement.

2. Hak Pakai: Right of Use for Foreigners

The “right of use” or Hak Pakai title offers a path to property ownership in Bali for foreign nationals. Such individuals can own property under this legal framework if they hold a KITAS, KITAP.

It is important to note that for Hak Pakai the property must have an existing building. Bare land is not eligible for sale to foreigners using this title. The property must have a minimum value that is depending on the province.

It is a perfect solution for people willing to buy an apartment as a second home under a Second home visa.

Originally granted for a term of 30 years, the tenure of Hak Pakai can be extended by an additional 20 and 30 years.

3. HGB Title for Commercial Use

The HGB is the highest title that foreigner can get. A foreign investment company (PT PMA) can buy a freehold property under a Hak Guna Bangunan (HGB) title.

At the difference with the leasehold, the company becomes the owner and has responsibilities on the land such as the land and building tax. The purchase of a freehold is a Sales and Purchase agreement and not a leasehold. The company has the right to resell the property to another individual or company as a freehold (by upgrading the land title to Hak Milik) and transfer the land title.

At the difference with the leasehod, the land office changes the name of the owner on the land title and raise the name of the previous owner. The company can even apply for a mortgage on it.

While it commences with a 30-year term, this period can be extended by successive extensions of 20 or 30 years each, culminating in a total tenure of up to 80 years. These titles come with the convenience of being transferrable through sales or inheritance processes.

Legal Aspects of Buying Property in Bali

Real Estate

Navigating through the legal intricacies of acquiring property in Bali requires adherence to crucial procedures for people looking to secure their property purchase in Bali.

  • Secure a proper offer with a proper contract
  • Undertaking thorough due diligence
  • Establishing a PT PMA enterprise if you want to make business with your property
  • Sign a leasehold or purchase agreement and review your contract with a third party to ensure the contract is not favoriting one side. It is crucial step specially on a leasehold.

Secure your contract

Most of issues come from a wrong contract and misunderstanding. The initial offer is the base of the relation and the rest of the process. Reviewing a leasehold contract is crucial. The language barrier even with a notary can lead to unpleasant situation.

Optimize your tax exposure

Creating a PT PMA (Perseroan Terbatas Penanaman Modal Asing) helps you to acquire a leasehold or HGB but it also helps you to optimize your tax exposure and make your business and investment legal.

  • The inclusion of no less than two shareholders
  • An allowance for entirely foreign-owned enterprises in the domain of real estate
  • A director and a commissioner

Setting a PT PMA company helps you to optimize your taxation and get a better Return on Investment (ROI) and secure your property.

Due Diligence and Property Verification

Conducting due diligence and confirming the validity of property are essential components in acquiring real estate. This includes:

  • Ensuring that the seller has a legal right to sell
  • Determining if there are any liens or burdens on the title
  • Confirming that there is no outstanding litigation concerning land disputes
  • Verifying clear and lawful ownership
  • Ensuring that the size of the land is correct as on the land title
  • Proceed with a soil test to ensure you can build on the land without hassle
  • Ensure you have a road access agreement
  • Ensure you will not have any issue surrounding

Indonesia classified the land and properties on different zoning. Checking the zoning can influence how you can build and licenses you can get, specially if you are willing to have a license for Airbnb or a restaurant, Hotel etc.

Taxes and Fees Involved


Understanding the various taxes and fees that come with buying or selling property is crucial to avoid unexpected expenses.

In freehold property deals, sellers are responsible for a 2.5% PPH tax while buyers must cover a 5% BPHTB tax.

Every year, owners pay a Property Tax (PBB) which varies between just about0.1-0.2%, based on the government’s valuation of their Bali properties.


The lessor has to pay a 20% lease tax if the lessor is non resident. KITAS holder pays a flat tax at 10%.

Other sporadic expenses might include notary charges—these can be negotiated but typically range from around 1-2% of the transaction value—and legal costs related to preparing necessary documentation as well as potential complications stemming from declaring lower than actual sale prices during transactions.

Working with Real Estate Professionals

Working with real estate experts significantly eases the process of buying property within the Bali real estate market. These professionals, including agents and property management firms, can help you find and secure properties in Bali, offer informed advice, and help you optimize your investment outcomes.

Choosing a Reliable Real Estate Agent

Choosing a reliable real estate agent is a critical part of the process when purchasing property. It’s important to ensure that agents in Bali are credible by checking for an authentic property broker certificate and verifying their membership with AREBI, as this attests to their legitimacy and professional conduct.

When navigating the complexities of the Bali property market, it’s beneficial to work with an agent who has demonstrable experience and local knowledge. They can offer valuable advice throughout the acquisition of a Bali property.

It is important to double check that the agents are legit and have the right to practice in Indonesia. You can ask them their company profile or their AREBI license if they are individuals. AREBI provide training to property agent and broker and ensure a better system to protect buyer and seller.

Using a non legit agent can turn to an hassle if a problem occurs.

Property Management Services

The significance of adept property management cannot be overstated for investors who do not permanently reside in Bali, ensuring their properties are well-maintained. A Balinese property management firm delivers an all-encompassing range of services that covers:

  • Around-the-clock support for guests
  • Comprehensive oversight involving the hiring and training of staff members
  • Management of financial outlays
  • An array of promotional activities including website creation and expert media production.

To maintain clarity and record every transaction meticulously, these property management firms furnish villa proprietors with monthly statements detailing profits and losses. The superior level of service they provide enhances guest satisfaction which leads to better occupancy rates thereby augmenting rental income—a direct economic advantage for those owning villas.

Risks and Precautions When Buying Property in Bali

luxury villa in Bali investment opportunities. Optimize property tax

Avoiding Nominee Systems

Property ownership for foreign investors in Bali can be attractive when using nominee systems, but such arrangements come with substantial legal hazards. The actual legal owner — the nominee — may impede sales or exert control over the property, potentially resulting in the investor losing their property and savings if complications arise from the nominee arrangement.

Nominee agreement is illegal in Indonesia

The involvement of a nominee system adds complexity to property dealings due to necessary cancellation of these agreements. This introduces extra layers of difficulty and expense. Despite these challenges, expats frequently gravitate towards nominee systems captivated by freehold ownership’s promise which conveys an enduring sense of possession and authority over Indonesian real estate investments.

Pre-Owned Properties vs. Off-Plan Projects

As an investor, one of your key decisions will be to determine whether to invest in second-hand properties or new off-plan projects. In Bali, opting for off-plan properties can present the advantage of lower initial prices and opportunities for personalization that pre-owned homes may not offer. Investing early in these projects could also result in significant appreciation by their completion, influenced by regional development and inflationary trends.

Conversely, established rental properties come with the benefit of immediate income through rent and a more predictable investment landscape compared to their off-plan counterparts, which are reliant on construction schedules. When it comes time to sell leasehold rental property though, this task may prove difficult because buyers often hesitate over limited-term leases.

Cultural and Environmental Considerations

Investing in Bali property involves more than just the financial aspects; cultural and environmental factors are also of significant importance. For instance, local cultural norms such as the prohibition of development near temples or on religious pilgrimage routes must be taken into account. Respecting sacred lands and adhering to building codes reflect the importance of being culturally mindful when investing in properties in Bali.


Investing in Bali’s property market offers exciting opportunities for foreign investors. From understanding the various property ownership options and navigating the vibrant property market to dealing with legal aspects and working with real estate professionals, informed decisions are the key to success. Being mindful of cultural and environmental aspects and understanding the risks and precautions can lead to a harmonious and sustainable investment experience. With the right planning and guidance, your dream of owning a slice of paradise can become a reality.

Frequently Asked Questions

Can a foreigner buy property in Bali?

Indeed, a foreign-owned company known as PT PMA is required to be established by foreigners for the purpose of owning property in Bali prior to making any purchase.

It is feasible for individuals to own property via leasehold or secure it through freehold ownership (HGB)

How much does it cost to buy house in Bali?

House prices in Bali fluctuate considerably, with the cost being dependent on the specific village where one is looking to purchase.

Is buying property in Bali a good idea?

Indeed, acquiring property in Bali may be considered a wise choice owing to its affordability relative to other sought-after locales. This position it as an excellent spot for investors operating on a modest budget when looking into purchasing property.

What are the popular areas for property investment in Bali?

Seminyak, Canggu, Ubud, Sanur, Nusa Penida, Cemagi, Kedungu, and Munduk are sought-after regions for property investment in Bali due to their promising prospects for investors.

Contact us if you are looking to invest in a property in Bali or book an online meeting with us.