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 as a foreigner requires navigating complex legal restrictions and ownership structures that differ significantly from most Western countries.
The purchase process involves specific steps including choosing between leasehold and corporate ownership structures, working with Indonesian notaries, and understanding local regulations that can make or break your investment.
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 cannot own freehold property in Bali and must choose between leasehold agreements (25-99 years) or purchasing through an Indonesian PT PMA company structure.
The purchase process requires working with an Indonesian notary, verifying property titles at the local land office (BPN), and paying approximately 5% in acquisition taxes plus additional fees.
| Purchase Aspect | Foreign Individual | Through PT PMA Company |
|---|---|---|
| Ownership Type | Leasehold (Hak Sewa) or Hak Pakai | Hak Guna Bangunan or Hak Pakai |
| Maximum Lease Period | 25-99 years | 30 years (renewable) |
| Land Rights | Use rights only | Building and use rights |
| Transfer Restrictions | Limited by lease terms | Can sell company shares |
| Total Costs | Purchase price + 5% tax + fees | Purchase price + company setup + taxes |
| Required Documentation | Passport, lease agreement | Company documents, board resolutions |
| Legal Complexity | Moderate | High |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What type of property should you consider buying in Bali?
The Bali property market offers three main options for foreign buyers: villas, apartments, and land parcels.
Villas represent the most popular choice among international investors, particularly in areas like Seminyak, Canggu, and Ubud. These properties typically range from $200,000 to $2 million depending on location and luxury level. As of September 2025, villa investments in prime tourist areas generate rental yields between 6% to 12% annually.
Apartments and condominiums are becoming increasingly available, especially in Denpasar and newer developments in South Bali. These units start around $100,000 for basic properties and can exceed $500,000 for luxury oceanfront units. Apartment ownership often comes with different legal structures compared to villas.
Land purchases require the most complex legal arrangements since foreigners cannot directly own land in Indonesia. Raw land prices vary dramatically from $50 per square meter in rural areas to $2,000 per square meter in prime beachfront locations.
What budget do you need for purchasing property in Bali?
Your total budget should include the purchase price plus additional costs that typically add 10% to 15% to the final amount.
Purchase prices vary significantly by location and property type. Entry-level properties start around $80,000 for basic apartments, while luxury villas in prime areas can exceed $3 million. Mid-range villas suitable for investment or personal use typically cost between $300,000 to $800,000.
Additional costs include the 5% acquisition tax (BPHTB), notary fees ranging from $1,500 to $5,000, legal fees of $2,000 to $8,000, and property registration costs. If purchasing through a PT PMA company structure, add $3,000 to $10,000 for company establishment and annual compliance costs.
Budget an extra 2% to 3% of the purchase price for due diligence, property inspections, and potential renovation costs that often arise after purchase.
What legal restrictions apply to foreign property ownership in Indonesia?
Indonesian law prohibits foreigners from owning freehold property titles (Hak Milik) under any circumstances.
Foreigners can legally hold property through three main structures: Leasehold agreements (Hak Sewa) for terms of 25 to 99 years, Right to Use titles (Hak Pakai) under specific conditions with Indonesian sponsors, or through Indonesian PT PMA companies that can hold building rights (Hak Guna Bangunan).
The 2023 Job Creation Law maintained these restrictions while clarifying that foreign individuals can hold Hak Pakai for residential purposes for up to 30 years, renewable for another 20 years. However, this requires meeting specific investment thresholds and obtaining proper permits.
Violation of ownership laws can result in property confiscation, criminal charges, and deportation. The Indonesian government actively monitors foreign ownership compliance, particularly in tourist areas like Bali.
Should you purchase as an individual or through a company structure?
| Aspect | Individual Purchase | PT PMA Company |
|---|---|---|
| Legal Ownership | Leasehold/Hak Pakai only | Hak Guna Bangunan possible |
| Initial Setup Costs | $2,000 - $5,000 | $8,000 - $15,000 |
| Annual Compliance | Lease renewal fees only | $2,000 - $4,000 annually |
| Property Transfer | Subject to lease terms | Sell company shares |
| Tax Implications | 5% acquisition tax | Corporate taxes apply |
| Control Level | Limited by lease agreement | Full management control |
| Risk Level | Moderate - lease dependent | Higher - compliance required |
How do you choose the right location in Bali for property investment?
Location selection in Bali requires understanding distinct regional characteristics, price points, and development regulations that vary significantly across the island.
South Bali areas including Seminyak, Canggu, and Jimbaran offer the highest rental yields but come with premium prices ranging from $1,500 to $5,000 per square meter for land. These areas provide established tourism infrastructure and consistent rental demand throughout the year.
Central Bali locations like Ubud attract different investor profiles, with property prices 30% to 50% lower than beachfront areas. Ubud properties focus on wellness tourism and longer-term stays, generating different rental patterns compared to beach destinations.
East and North Bali regions offer the most affordable entry points, with land costs starting at $200 per square meter. However, these areas require careful consideration of accessibility, infrastructure development, and future tourism growth potential.
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What ownership types are legally available for foreigners in Bali?
Foreigners in Bali can legally acquire property rights through three distinct ownership structures, each with specific advantages and limitations.
- Leasehold (Hak Sewa): The most straightforward option allowing foreigners to lease property for 25 to 99 years. Lease terms are negotiable and can include renewal options, but the underlying land remains owned by Indonesian citizens.
- Right to Use (Hak Pakai): Available to foreign individuals meeting specific investment requirements, typically $130,000 minimum. This provides 30-year initial terms renewable for 20 additional years.
- PT PMA Company Ownership: Indonesian companies with foreign investment can hold Hak Guna Bangunan (building rights) for 30 years, renewable. This requires minimum investment of $2.5 million for property-focused companies.
- Nominee Arrangements: While historically common, using Indonesian nominees to hold freehold titles is illegal and carries significant risks including property loss and legal prosecution.
- Mixed-Use Developments: Some newer projects offer strata title arrangements that provide more security than traditional leasehold, particularly in apartment complexes.
What's the difference between freehold and leasehold, and why does it matter?
Understanding the distinction between freehold and leasehold ownership is critical for any foreign property buyer in Bali, as it fundamentally affects your rights and investment security.
Freehold ownership (Hak Milik) provides absolute property rights including the land and any structures built on it. Only Indonesian citizens and eligible legal entities can hold freehold titles. This ownership type offers perpetual rights, full control over the property, and unrestricted transfer abilities.
Leasehold arrangements grant you use rights for a specified period, typically 25 to 99 years in Bali. While you can build, renovate, and rent the property during the lease term, the underlying land ownership remains with the Indonesian freeholder. Lease agreements should include clear terms about renewal options, transfer rights, and property improvements.
The practical implications affect your investment in several ways: leasehold properties typically cost 20% to 40% less than equivalent freehold properties, lease terms impact property values as they approach expiration, and banks rarely provide mortgages for leasehold properties with less than 20 years remaining.
How do you navigate the sale and purchase agreement process?
The sale and purchase agreement (SPA) process in Bali follows Indonesian legal requirements and involves multiple stages that must be completed in the correct sequence.
The process begins with a preliminary agreement or memorandum of understanding (MOU) that outlines basic terms including price, payment schedule, and key conditions. This document typically requires a deposit of 10% to 30% of the purchase price and establishes timelines for due diligence completion.
Due diligence must be completed before signing the formal SPA, including property title verification at the local BPN (National Land Agency) office, building permit validation, tax payment confirmation, and environmental compliance checks. This process typically takes 2 to 4 weeks with proper legal representation.
The formal SPA signing requires the presence of an Indonesian notary (PPAT) who ensures legal compliance and manages the document registration process. Payment typically occurs in stages: initial deposit, second payment upon SPA signing (often 50% to 70% of total), and final payment upon title transfer completion.
Final settlement includes title transfer registration, payment of all applicable taxes, and property handover with all relevant documentation including certificates, permits, and utility transfers.
What role does the notary play in property transactions?
Indonesian notaries (PPAT - Pejabat Pembuat Akta Tanah) are government-appointed officials who play an essential and legally required role in property transactions.
The notary's primary responsibilities include verifying the legal status of both buyer and seller, ensuring all documentation meets Indonesian legal requirements, preparing and witnessing the signing of all transfer documents, and registering the transaction with the appropriate government agencies including BPN and local tax offices.
Notary fees are regulated by government tariffs and typically range from 0.5% to 1% of the property value, with additional administrative costs. The notary must be licensed to operate in the specific regency where the property is located, so properties in Badung Regency require a Badung-licensed notary.
The notary also handles tax calculations and payments, including the 5% acquisition tax (BPHTB) and ensures proper tax clearance certificates are obtained. They maintain legal responsibility for the transaction's compliance with Indonesian law, making their role both crucial and legally protected.
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.
How do you verify property title and legal status?
Property title verification in Bali requires checking multiple government databases and conducting thorough due diligence to ensure clear ownership and legal compliance.
The verification process starts at the local BPN (Badan Pertanahan Nasional) office where you can obtain an official land certificate copy and verify the current legal status. This certificate shows the property's exact boundaries, current owner, title type, and any encumbrances or restrictions.
Additional verification steps include checking with the local village office (Kelurahan) for any community disputes or customary land claims, reviewing building permits (IMB) with the local building authority, confirming tax payment status with the local tax office (Dispenda), and verifying environmental compliance certificates if required.
Professional legal assistance is essential for this process, as title issues can be complex and costly to resolve after purchase. Common problems include overlapping titles, unpaid taxes creating liens, building permit violations, and customary land disputes that may not appear in official records.
The verification process typically costs $500 to $2,000 depending on property complexity and should be completed before making any substantial payments or signing binding agreements.
What taxes and fees should you budget for when buying property?
Property acquisition in Bali involves multiple taxes and fees that buyers must pay in addition to the purchase price.
| Fee Type | Rate/Amount | Who Pays |
|---|---|---|
| Acquisition Tax (BPHTB) | 5% of transaction value | Buyer |
| Land Transfer Tax (PPh) | 2.5% of transaction value | Seller (often negotiated) |
| Notary Fees | 0.5% - 1% of property value | Buyer |
| Certificate Registration | $200 - $500 | Buyer |
| Legal Fees | $2,000 - $8,000 | Buyer |
| Survey and Mapping | $300 - $800 | Buyer |
| Administrative Costs | $500 - $1,500 | Buyer |
Why should you consult a local lawyer for your property purchase?
Engaging a qualified Indonesian property lawyer is essential for navigating the complex legal landscape and avoiding costly mistakes that frequently trap foreign buyers.
Indonesian property law differs significantly from Western legal systems, particularly regarding foreign ownership restrictions, land rights classifications, and transfer procedures. Local lawyers understand these nuances and can structure transactions to comply with current regulations while maximizing your legal protections.
Common legal issues that lawyers help prevent include invalid nominee arrangements that can result in property loss, improper lease agreements with unfavorable terms, title defects that emerge after purchase, and building permit violations that require expensive corrections. Legal fees of $2,000 to $8,000 are minimal compared to potential losses from these issues.
A qualified property lawyer also provides ongoing support for lease renewals, property transfers, tax compliance, and dispute resolution. They maintain relationships with notaries, surveyors, and government officials that can expedite transactions and resolve issues more efficiently.
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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.
Successfully purchasing property in Bali requires understanding complex legal structures and working with qualified professionals throughout the process.
The key to a secure investment lies in proper due diligence, choosing the right ownership structure for your situation, and maintaining strict compliance with Indonesian property laws that continue to evolve.
Sources
- Indonesian National Land Agency (BPN)
- Ministry of Law and Human Rights Indonesia
- Indonesia Investment Coordinating Board
- Indonesian Tax Authority
- Bank Indonesia
- Bali Provincial Legal Database
- Bali Provincial Government
- Real Estate Indonesia Association
-Bali Property Taxes and Fees: Complete Guide for Foreign Buyers
-Should You Buy Property in Bali? Investment Analysis 2025
-How to Buy a House in Bali: Step-by-Step Legal Process
-Average House Prices in Bali: Market Analysis by Area
-Average Price per Square Meter in Bali: 2025 Property Data
-Average Rental Prices in Bali: Complete Market Overview