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
Foreigners can legally buy property in Bali, but cannot own land outright and must use leasehold, right-to-use permits, or company structures to acquire real estate. While Indonesian citizens enjoy freehold ownership rights, foreign buyers face specific legal restrictions and procedures that require careful navigation to ensure secure property acquisition in Indonesia's most popular island destination.
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 in Bali must purchase property through leasehold agreements (25-30 years), Hak Pakai rights (up to 80 years with residency), or PT PMA company structures, as freehold land ownership is restricted to Indonesian citizens only.
Property acquisition costs typically include 5% transfer tax, 1-2% notary fees, and ongoing annual land taxes, with rental yields ranging from 6-10% in prime areas like Canggu and Seminyak.
| Ownership Type | Duration | Requirements |
|---|---|---|
| Leasehold | 25-30 years (renewable) | No residency required |
| Hak Pakai (Right to Use) | Up to 80 years | KITAS/KITAP residency permit |
| PT PMA Company | Hak Guna Bangunan (30 years) | Foreign-owned company setup |
| Freehold (Hak Milik) | Indefinite | Indonesian citizens only |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What can foreigners actually buy in Bali compared to locals or other nationalities?
Foreigners cannot own freehold land (Hak Milik) in Bali, while Indonesian citizens enjoy unrestricted freehold property ownership rights.
Foreign buyers can legally acquire property through three main structures. Leasehold properties allow foreigners to buy and control residential or commercial property under long-term lease agreements, typically lasting 25-30 years with renewal options.
The Right to Use (Hak Pakai) option grants foreigners with long-term residence permits the right to use and occupy residential land for up to 80 years, though this doesn't constitute freehold ownership. Additionally, foreigners can establish a PT PMA (foreign-owned company) to acquire Hak Guna Bangunan (right to build) for business or investment purposes.
Indonesian citizens and legal entities can own freehold land indefinitely, giving them complete ownership rights that foreigners cannot access except through company structuring or long-term leases. This fundamental difference means foreign investors must carefully consider their long-term plans and legal structure when entering the Bali property market.
Do I need to be a resident or have a special visa to own property in Bali?
Residency status is not required for leasehold property purchases, but acquiring Hak Pakai rights requires either a KITAS (temporary) or KITAP (permanent) residency permit in Indonesia.
The "Investor KITAS" specifically caters to property investment purposes and allows access to Hak Pakai rights. As of September 2025, the Indonesian government offers a "Second Home Visa" that permits property investors to reside in Bali for 5-10 years with proof of substantial funds or real estate ownership.
This visa doesn't grant freehold land ownership rights but provides legal residency for property investors. Foreign buyers without Indonesian residency can still purchase leasehold properties or establish PT PMA companies to acquire property rights, making residency helpful but not mandatory for most property transactions.
It's something we develop in our Indonesia property pack.
Do I need to be physically present in Indonesia to complete the purchase process?
Physical presence in Indonesia is not mandatory to complete property purchases, though remote transactions require proper formalization through legal channels.
Foreign buyers can complete transactions remotely using power of attorney arrangements or working with local notaries who handle the formalization process. All property transactions must be formalized before a government-registered notary in Indonesia, but this can be accomplished through legal representatives.
Remote buyers should ensure their power of attorney is properly executed and their legal representative is qualified to handle Indonesian property law. While physical presence isn't required, many buyers prefer to visit the property and meet their legal team in person to ensure proper due diligence and transaction security.
What is the exact step-by-step process to legally acquire property and which documents are required?
Property acquisition in Bali follows a structured 10-step legal process that typically takes 4-8 weeks to complete from initial agreement to final registration.
| Step | Process | Timeline |
|---|---|---|
| 1-2 | Property search, negotiation, Letter of Intent | 1-2 weeks |
| 3 | Legal due diligence and certificate verification | 1-2 weeks |
| 4-5 | Sales Purchase Agreement and lease agreement drafting | 1 week |
| 6-7 | Payment transfer and notary deed execution | 1 week |
| 8-10 | Building permit verification, tax confirmation, registration | 1-2 weeks |
Essential documents include the Land Certificate (Sertifikat Hak Milik or Hak Pakai), lease agreement or Right of Use certificate, Sales and Purchase Agreement, Notary Deed, IMB/PBG building permit, proof of tax payment (PBB), and a comprehensive due diligence report. Each document must be verified and properly executed to ensure legal compliance and secure ownership rights.
Is hiring a lawyer mandatory or just recommended for foreigners buying property in Bali?
Hiring a lawyer is not legally mandatory but strongly recommended for foreign property buyers in Bali due to complex regulations and potential legal pitfalls.
A government-registered notary must formalize all property transactions, but lawyers provide crucial services including due diligence, contract review, and buyer protection that notaries don't offer. Legal experts help verify land certificates, check for outstanding debts or disputes, ensure proper contract terms, and navigate the complex Indonesian property law framework.
Foreign buyers face higher risks of fraud, unclear lease terms, and regulatory non-compliance compared to local buyers. Professional legal representation typically costs 1-2% of the purchase price but can prevent costly mistakes that could result in property loss or legal complications worth far more than the legal fees invested upfront.
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What taxes, fees, and ongoing costs should I expect when buying and later reselling property in Bali?
Property acquisition costs in Bali typically total 7-10% of the purchase price, including transfer taxes, notary fees, and registration charges.
Acquisition costs include a 5% transfer tax, 1-2% notary fees, registration charges, and due diligence/legal review costs. Annual ongoing costs include land and building tax (PBB) and applicable provincial or local taxes that vary by property value and location.
When reselling property, sellers face capital gains tax of approximately 5% on the appreciation value, broker commissions (typically 3-5%), and additional notary and transfer fees. Foreign owners should budget for these costs when calculating investment returns and exit strategies.
Properties used for rental income may incur additional business taxes and permit fees depending on the rental structure and local regulations. It's something we develop in our Indonesia property pack.
Are mortgages available to foreigners in Bali, and if so, what are the typical rates, conditions, and best practices?
Mortgage availability for foreigners in Bali is extremely limited, with most Indonesian banks refusing to lend to non-residents unless using PT PMA company structures.
Foreign buyers who qualify for mortgages face interest rates of 8-12% annually, significantly higher than rates offered to Indonesian citizens. Banks require strict approval conditions including local income verification, strong credit history, and substantial down payments typically exceeding 50% of the property value.
Best practices for foreign buyers seeking financing include maintaining verifiable Indonesian income sources, working with reputable financial intermediaries, and considering alternative financing options such as developer financing or international lending. Most foreign property buyers in Bali use cash purchases due to limited mortgage access and high financing costs.
What are the classic mistakes and pitfalls foreigners make when buying property in Bali and how to avoid them?
The most common and costly mistake is purchasing property without properly verifying land certificates or seller ownership rights, leading to disputes or property loss.
Foreign buyers frequently fail to clarify lease extension options, leaving them vulnerable to unfavorable renewal terms or property loss when leases expire. Skimping on legal due diligence or avoiding professional legal representation saves money upfront but creates massive risks for substantial losses later.
Many buyers neglect to confirm tax payment history (PBB), creating future liability for unpaid taxes that become the new owner's responsibility. Additionally, foreigners often assume that property purchase or residency permits grant land ownership rights or unrestricted property use, leading to legal complications.
To avoid these pitfalls, always conduct comprehensive due diligence, hire qualified legal representation, verify all documentation thoroughly, and understand the exact nature and limitations of your property rights before completing any purchase.
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.
Which areas in Bali are most popular among foreigners to settle in and why?
Seminyak, Canggu, Ubud, Sanur, and Jimbaran represent the five most popular areas for foreign property buyers, each offering distinct lifestyle and investment advantages.
Canggu and Seminyak attract investors seeking high rental yields and growth potential due to their global popularity, beach access, luxury amenities, and strong tourism infrastructure. These areas command premium prices but offer excellent short-term rental income potential with yields often reaching 6-10% annually.
Ubud and Sanur appeal to retirees and long-term residents prioritizing liveability, tranquility, and cultural immersion over pure investment returns. These areas offer more affordable property prices, established expat communities, and steady long-term appreciation potential.
Jimbaran provides a middle ground with its premium beachfront location, proximity to the airport, and mix of luxury resorts and residential properties. Each area offers different advantages depending on investment goals, lifestyle preferences, and budget considerations.
Which regions currently rank best for liveability, rental demand, capital appreciation, and how do the latest data compare?
Canggu and Seminyak lead in rental yields and tourism-driven growth, consistently delivering 6-10% annual rental returns due to global popularity and high short-term rental demand.
| Region | Rental Yield | Capital Appreciation | Liveability Score |
|---|---|---|---|
| Canggu | 8-10% | High | High (surfers/young professionals) |
| Seminyak | 6-9% | High | High (luxury lifestyle) |
| Ubud | 4-7% | Moderate | Very High (culture/wellness) |
| Sanur | 5-8% | Moderate | High (families/retirees) |
| Jimbaran | 5-8% | High | High (luxury beachfront) |
| Nusa Dua | 4-6% | High | Moderate (resort area) |
North and South Kuta, along with Nusa Dua, show strong capital appreciation driven by infrastructure development, international schools, resort expansion, and ongoing tourism growth. These areas may offer lower immediate rental yields but stronger long-term appreciation potential as Bali's tourism infrastructure continues expanding.
What is the current breakdown of property prices per city and region in Bali?
Property prices in Bali vary significantly by location, with premium beachfront areas commanding 3-4 times higher prices per square meter than inland or northern regions.
Seminyak and Canggu represent the highest-priced markets, with leasehold villas ranging from $2,000 to $4,000 per square meter for standard properties, while premium beachfront properties command significantly higher rates. Ubud and Sanur offer more affordable options, typically ranging from $1,200 to $2,500 per square meter for comparable properties.
Jimbaran and Nusa Dua fall into the mid-to-high-end market range, with prices typically spanning $2,000 to $3,500 per square meter depending on proximity to beaches and amenities. Non-tourist areas in West and North Bali offer the lowest prices, sometimes below $1,000 per square meter, but with significantly less rental demand and slower appreciation potential.
As of September 2025, prime beachfront properties in Canggu and Seminyak continue experiencing strong price growth, while inland areas show more moderate appreciation rates. It's something we develop in our Indonesia property pack.
How do fiscal implications work for foreigners, including income tax on rental earnings and capital gains when selling?
Foreign property owners in Bali must pay up to 10% Indonesian non-resident income tax on rental earnings, or corporate tax rates if the property is owned through a PT PMA company structure.
Rental income tax obligations apply regardless of where the rental income is received, and foreign owners must report and pay taxes on all Indonesian-sourced rental income. Capital gains tax of approximately 5% applies to property sale proceeds, calculated and collected at the time of transaction regardless of the owner's nationality.
Additional fiscal obligations include annual PBB (land and building tax), VAT for certain property types, and additional costs if properties are sublet or operated as commercial businesses. Properties generating rental income may require business licenses and additional tax registrations depending on the rental structure and local regulations.
Foreign investors should consult with qualified tax professionals to understand their complete tax obligations and optimize their structure for both Indonesian tax efficiency and their home country tax implications when investing in Bali real estate.
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.
Foreign property ownership in Bali requires navigating complex legal structures, but offers attractive investment opportunities for those who understand the regulations and choose the right locations.
Professional legal guidance, thorough due diligence, and realistic expectations about ownership rights are essential for successful property investment in this popular Indonesian destination.
Sources
- Exotiq Property - Can Foreigners Buy Property in Bali
- Bali Exception - Thailand vs Bali Investment Laws
- Neginski - Foreigners Buying Property in Bali 2025
- Emas Estate - Buying Leasehold Property in Bali
- Cekindo - Buying Property in Bali Essentials
- Bali Exception - PT PMA Property Ownership
- Ilot Property Bali - Second Home Visa
- Nomad Tax - Living in Bali Tax Guide