Authored by the expert who managed and guided the team behind the Indonesia Property Pack
Yes, the analysis of Bali's property market is included in our pack
Buying property in Bali is generally safe for foreigners when using proper legal structures, but direct land ownership is prohibited under Indonesian law.
Foreigners must rely on legal alternatives like Hak Pakai (right to use) titles or leasehold agreements, which can provide secure long-term rights for up to 80 years when properly structured and registered with Indonesian authorities.
If you want to go deeper, you can check our pack of documents related to the real estate market in Indonesia, based on reliable facts and data, not opinions or rumors.
Foreigners can legally buy property in Bali through Hak Pakai or leasehold structures with proper residency permits. Avoid nominee arrangements as they offer no legal protection and frequently result in disputes.
Expect total acquisition costs of 6-8% of property value, annual yields of 8-16% for well-located villas, and resale recovery rates of 60-80% depending on location and remaining lease duration.
| Ownership Type | Duration | Requirements |
|---|---|---|
| Hak Pakai | Up to 80 years (30+20+30) | KITAS/KITAP residency permit |
| Leasehold | 25-30 years, renewable | Notarized contract |
| PT PMA Company | Up to 80 years | Foreign investment company |
| Nominee Structure | Illegal/High Risk | Not recommended |
| Annual Property Tax | 0.1% of assessed value | All ownership types |
| Purchase Tax | 5% after threshold | Freehold-style transactions |
| Rental Income Tax | 10% residents, 20% non-residents | Gross rental income |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What visa or residency status do I need to legally buy and stay in a property in Bali?
You need a KITAS (limited stay permit) or KITAP (permanent stay permit) to secure Hak Pakai property rights in Bali.
Tourist visas and business visas are insufficient for property ownership structures that grant long-term living rights. The investor KITAS is particularly popular among foreigners who want to invest in or run a business from their Bali property.
As of September 2025, the investor KITAS requires a minimum investment of $130,000 USD and allows you to stay in Indonesia for one year, renewable for up to five years. This residency permit is essential for accessing the most secure property ownership structures available to foreigners.
Without proper residency status, you're limited to leasehold arrangements that may offer less security and shorter terms than Hak Pakai titles.
It's something we develop in our Indonesia property pack.
What types of property ownership structures are available to foreigners, and which ones actually grant secure long-term rights?
Hak Pakai (right to use) is the most secure option for foreigners, offering rights for up to 80 years through renewable 30+20+30 year segments.
| Ownership Structure | Security Level | Maximum Duration |
|---|---|---|
| Hak Pakai | High (requires KITAS/KITAP) | 80 years total |
| Leasehold (Hak Sewa) | Medium (notarized contracts) | 25-30 years, renewable |
| PT PMA Company | High (commercial focus) | 80 years via Hak Guna Bangunan |
| Nominee Structure | None (illegal, high risk) | Uncertain, no protection |
| Freehold (Hak Milik) | Not available to foreigners | N/A |
What are the exact costs and taxes I should expect when purchasing, holding, and selling property in Bali?
Total acquisition costs typically range from 6-8% of the property value, including taxes and legal fees.
Purchase tax (BPHTB) is 5% of property value after a non-taxable threshold, applicable in freehold-style transactions. Notary and legal fees add another 0.5-1.5% of the property value for registration and documentation.
Annual holding costs include property tax (PBB) at approximately 0.1% of the cadastral (assessed) value. If you rent out the property, expect rental income tax of 10% of gross rental for residents or 20% for non-resident foreigners.
Additional ongoing costs include property management (5-25% of rental income), maintenance (1-2% of property value annually), and insurance premiums that vary based on coverage and property value.
How long can foreign ownership contracts such as leaseholds or Hak Pakai titles really last, and can they be renewed?
Hak Pakai titles offer the longest duration at up to 80 years total through a 30+20+30 year renewal structure.
Leasehold contracts commonly run 25-30 years initially, with contractual renewal options for another 20-30 years depending on the agreement. The key is ensuring renewal terms are clearly defined in the original contract.
Renewals must be negotiated and registered in advance to ensure uninterrupted rights. For Hak Pakai, your residency permit must remain valid throughout the entire period, and renewals are subject to compliance with Indonesian regulations.
PT PMA companies holding Hak Guna Bangunan titles also enjoy up to 80 years of rights, making them suitable for commercial property investments.
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What legal protections exist if there's a dispute with the landlord, developer, or local authorities?
Legal protection depends entirely on having properly registered, notarized contracts that clearly define your rights including use, rental, resale, and inheritance.
Hak Pakai and leasehold contracts must be registered with Indonesian authorities to ensure enforceability in court. Only formal legal title structures receive court protection - nominee arrangements have no legal standing.
Indonesian courts will uphold properly structured agreements, but the burden is on you to ensure all documentation is complete and compliant with local regulations. Working with qualified Indonesian lawyers rather than just notaries tied to agents or developers is essential.
Disputes with local authorities typically arise from improper zoning, unpaid taxes, or missing building permits - all preventable through proper due diligence before purchase.
What are the risks of using a local nominee to hold the property, and how common are disputes or losses in such cases?
Nominee structures carry extremely high legal risk with no real protection, as foreigners cannot enforce rights in court if challenged.
Using an Indonesian citizen to hold Hak Milik (freehold) title on your behalf is illegal under Indonesian law. If disputes arise or the nominee refuses to honor agreements, you have no legal recourse.
Instances of loss and dispute are common in nominee arrangements, with Indonesian authorities viewing such arrangements as void. Many foreigners have lost their entire investment when nominees decided to claim the property as their own.
The risks include complete loss of investment, inability to sell or transfer the property, and potential legal issues for attempting to circumvent Indonesian property laws.
It's something we develop in our Indonesia property pack.
How reliable are property developers and agents in Bali, and how can I verify their track record before buying?
Developer and agent reliability varies widely in Bali, making thorough verification essential before any transaction.
- Check business licenses with Indonesian authorities and verify they're current and legitimate
- Request prior client testimonials and contact references directly to verify their experiences
- Research the developer's project history, including completion rates and delivery timelines
- Verify all permits and land rights independently through the National Land Agency (BPN)
- Cross-check land status and zoning with local authorities rather than relying on agent claims
What restrictions apply if I want to rent the property out as a villa or Airbnb, and how much do permits and licenses cost?
Renting property as a villa or Airbnb requires a commercial license, with the property zoned for commercial or mixed-use purposes.
Licenses such as Pondok Wisata for small rental operations typically require local company (PT PMA) involvement and incur fees that vary by region and property size. Expect licensing costs to range from $2,000-10,000 USD depending on the scope of operations.
Properties in residential zones may face restrictions on short-term rentals, and operating without proper licenses can result in fines or forced closure by local authorities.
Additional requirements may include tourism taxes, regular inspections, and compliance with local safety and environmental standards.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Indonesia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What kind of due diligence should I perform on land zoning, building permits, and local regulations before signing anything?
Comprehensive due diligence is critical to avoid investment losses or legal blockades by local authorities.
- Confirm the seller's legal right to sell by verifying ownership documents with the National Land Agency
- Check zoning status (residential/commercial) and ensure it matches your intended use
- Verify all building permits (IMB/PBG) are current and cover existing structures
- Review past unpaid taxes or liens that could transfer to new owners
- Investigate any pending legal disputes or development restrictions on the land
- Work with an independent lawyer, not just a notary connected to the agent or developer
What are the average rental yields and resale values for foreign-owned properties in different areas of Bali?
Well-located villas in prime areas can generate annual rental yields of 8-16%, with some premium properties appreciating up to 20% per year.
| Area | Average Price per m² | Rental Yield Range |
|---|---|---|
| Canggu/Seminyak | $6,000-10,000 | 10-16% |
| Ubud | $3,000-5,000 | 8-12% |
| Sanur | $2,500-4,000 | 6-10% |
| Jimbaran | $4,000-7,000 | 8-14% |
| Entry-level areas | $2,500 | 8-12% |
How easy is it to sell a property as a foreigner, and what percentage of value can I realistically expect to recover?
Leasehold and Hak Pakai titles can be sold, but market interest depends heavily on remaining lease duration and location quality.
Expect to recover 60-80% of remaining lease value in average locations, though prime locations like central Canggu or Seminyak may maintain better resale values. Properties with longer remaining lease terms naturally command higher prices.
PT PMA companies holding Hak Guna Bangunan properties often have more flexibility in transactions, especially for commercial properties. The sale process typically takes 3-6 months in normal market conditions.
Leaseholds often resell at a discount, with the discount increasing as the lease term shortens, making initial lease length crucial for long-term investment returns.
What insurance, maintenance, and ongoing management costs should I budget for each year to keep the property safe and profitable?
Annual operating costs typically total 3-8% of property value depending on management level and property type.
Property insurance premiums vary based on coverage and value but are highly recommended for protection against natural disasters common in Bali. Maintenance costs typically run 1-2% of property value annually, higher for managed villas with pools and tropical gardens.
Full property management for rental villas costs 5-25% of gross rental income or a fixed monthly fee, covering guest services, cleaning, repairs, and marketing. Self-managed properties require significant time investment but keep costs lower.
Additional costs may include security services, landscaping, pool maintenance, and periodic renovations to maintain competitiveness in Bali's dynamic rental market.
It's something we develop in our Indonesia property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Buying property in Bali as a foreigner is safe when using proper legal structures like Hak Pakai or legitimate leasehold agreements, avoiding nominee arrangements entirely.
Success requires thorough due diligence, working with qualified Indonesian lawyers, and understanding that while foreign ownership is restricted, legal alternatives can provide secure long-term property rights for up to 80 years.
Sources
- Neginski Legal - Foreigners Buying Property in Bali
- Emerhub - Land Ownership in Bali
- WithASA - Complete Guide to Bali Property Ownership
- Cekindo - Buying Property in Bali Essentials
- Exotiq Property - Bali Visa Requirements for Property Investors
- Emerhub - Buying Property in Bali as Foreigner
- Mercury Estate - Indonesia Real Estate Taxes
- Bali Home Immo - Bali Property Taxes