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 involves navigating complex legal structures that differ significantly from Western property markets. While foreigners cannot directly own freehold land, leasehold agreements and company structures provide secure pathways to property ownership with proper legal guidance and due diligence.
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 acquire property in Bali through leasehold agreements (25-30 years) or company structures, with acquisition costs including 5% BPHTB tax and 1-2% legal fees.
Popular areas like Seminyak and Canggu offer rental yields up to 15%, but buyers must navigate strict ownership laws and conduct thorough due diligence.
| Ownership Type | Legal Structure | Typical Duration | Key Benefits |
|---|---|---|---|
| Leasehold | Direct lease agreement | 25-30 years (renewable) | Simple, lower costs, clear legal framework |
| Right to Use (Hak Pakai) | Long-term residence permit required | Up to 30 years | Stronger rights, transferable |
| PT PMA Company | Indonesian company ownership | Indefinite (company-dependent) | Right to Build, commercial use possible |
| Apartments/Condos | Strata title ownership | Freehold equivalent | Direct ownership of unit (not land) |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
How easy is it compared to buying property in Western countries?
Buying property in Bali presents a mixed picture compared to Western markets - it's significantly more affordable but considerably more complex legally.
The entry costs are much lower than most Western cities, with decent properties starting around $100,000 in popular areas like Canggu or Ubud. Property taxes are also more favorable, typically around 0.5% annually compared to 1-3% in many Western countries.
However, the legal complexity is substantially higher since foreigners cannot directly own freehold land. You'll need to navigate leasehold structures or company formations, which require specialized legal expertise. The paperwork is more extensive, involving multiple government agencies and notarizations that don't exist in most Western property transactions.
The positive aspect is that over 80% of foreign property purchases in Bali are completed remotely, which offers more flexibility than many Western markets where physical presence is often required for closing.
What can foreigners legally buy and what is strictly off-limits?
As of September 2025, foreigners have several legal options but face clear restrictions on what they can purchase in Bali.
| Allowed for Foreigners | Legal Structure | Key Limitations |
|---|---|---|
| Leasehold Property | 25-30 year lease agreements | Limited duration, renewal dependent on landowner |
| Apartments/Condominiums | Strata title ownership | Own unit but not underlying land |
| Right to Use (Hak Pakai) | Requires KITAS/KITAP visa | Up to 30 years, visa-dependent |
| PT PMA Company Structure | Indonesian company ownership | Right to Build only, ongoing compliance costs |
| Villa Developments | Developer leasehold programs | Limited to approved developments |
Strictly off-limits for foreigners include direct freehold land ownership (Hak Milik), agricultural land, forest land, and properties in certain protected cultural zones. Nominee ownership structures, while sometimes offered, provide no legal protection and are strongly discouraged by legal experts.
Can buying property in Bali lead to residency or even citizenship down the road?
Property ownership in Bali does not automatically grant residency rights, but it can facilitate the visa application process for long-term stays.
Investors who purchase property worth over $130,000 through a PT PMA structure may qualify for an investor KITAS (stay permit), which allows residence for up to one year and is renewable. After holding a KITAS for several years and meeting additional requirements, you may be eligible to apply for KITAP (permanent residence).
However, property ownership alone never leads to Indonesian citizenship. The path to citizenship requires renouncing other citizenships, demonstrating Indonesian language proficiency, proving financial stability through income rather than assets, and typically requires 10+ years of continuous residence.
It's something we develop in our Indonesia property pack.
Where do foreigners typically buy the most and why?
Foreign buyers concentrate heavily in specific areas of Bali, driven by rental income potential and lifestyle factors.
- Seminyak: Premium beachfront location with luxury dining and shopping, offering rental yields of 12-15% annually
- Canggu: Popular with digital nomads and surfers, strong Airbnb demand with yields reaching 15%
- Ubud: Cultural heart of Bali, attracts wellness tourism with steady 8-12% rental returns
- Nusa Dua: Upscale resort area with established tourist infrastructure and reliable 10-12% yields
- Sanur: Family-friendly beach town with lower yields (6-8%) but stable long-term appreciation
These areas dominate foreign investment because they offer the best combination of tourist demand, infrastructure development, and regulatory clarity for foreign ownership structures.
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What is the actual step-by-step process for a foreigner to purchase a house in Bali?
The property purchase process in Bali follows a structured sequence that typically takes 6-12 weeks to complete.
- Property Selection and Reservation: Choose property and pay 5-10% refundable reservation deposit
- Legal Due Diligence: Independent lawyer verifies title, ownership history, zoning compliance, and tax clearance
- Structure Decision: Determine ownership method (leasehold, PT PMA company, or Right to Use)
- Company Formation (if applicable): Establish PT PMA with minimum $67,000 investment for Right to Build
- Purchase Agreement: Draft and notarize sale and purchase agreement with payment schedule
- Land Office Registration: Submit documents to National Land Agency (BPN) for title transfer
- Final Settlement: Complete remaining payments and receive property certificates
- Handover: Receive keys, management documents, and execute power of attorney if needed
Each step requires specific documentation and compliance with Indonesian property law, making legal representation essential throughout the process.
Which documents are mandatory, and which are optional or just "nice to have"?
Document requirements vary depending on the ownership structure chosen, but certain papers are universally required for any property transaction in Bali.
| Document Type | Mandatory/Optional | Purpose |
|---|---|---|
| Seller's Title Certificate | Mandatory | Proves legal ownership and title type |
| Seller's KTP (Indonesian ID) | Mandatory | Identity verification and legal capacity |
| PBB Tax Receipts (3 years) | Mandatory | Confirms tax compliance |
| NPWP (Tax Number) | Mandatory | Required for transaction registration |
| Zoning Certificate | Mandatory | Confirms permitted land use |
| Building Permit (IMB) | Optional but recommended | Verifies construction legality |
| Soil Survey Report | Optional | Important for new construction |
Additional documents may be required for specific ownership structures, such as PT PMA articles of incorporation or KITAS documentation for Right to Use arrangements.
Is it possible to complete the purchase without physically being in Bali?
Yes, remote property purchases are not only possible but have become the standard practice for foreign buyers in Bali.
Over 80% of foreign property transactions are completed entirely remotely through power of attorney arrangements. Virtual property tours, digital document signing, and video notarization have streamlined the process significantly since 2023.
The key requirements for remote purchase include appointing a trusted local representative with power of attorney, using a reputable law firm for document verification, and ensuring all funds are transferred through proper banking channels with full transaction records.
Many established developers and agencies now offer comprehensive remote purchase services, including virtual viewings, digital contract management, and post-purchase property management setup.
How reliable are real estate agents in Bali and can you trust them fully?
Real estate agent reliability in Bali varies significantly, making careful selection crucial for successful property transactions.
Trustworthy agents should hold AREBI (Indonesian Real Estate Brokers Association) licensing and demonstrate verifiable track records with foreign clients. Check their physical office location, online reviews, and ask for references from previous international buyers.
Warning signs include agents who push nominee ownership structures, demand upfront fees before showing properties, or discourage independent legal review. Reliable agents welcome third-party legal scrutiny and maintain transparent communication throughout the process.
Never rely solely on agent recommendations for lawyers or notaries - always engage independent legal counsel to protect your interests, as agents may have financial relationships that create conflicts of interest.
It's something we develop in our Indonesia property pack.
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.
Will the legal system actually protect a foreign buyer if something goes wrong?
The Indonesian legal system can protect foreign property buyers, but only when transactions strictly follow established legal frameworks and proper procedures.
Properties purchased through legitimate leasehold agreements, PT PMA structures, or Right to Use arrangements receive full legal protection under Indonesian law. Courts will enforce properly notarized contracts and registered ownership rights.
However, disputes involving nominee ownership arrangements or properties purchased outside legal frameworks receive minimal court protection. The legal system tends to favor Indonesian citizens in cases involving improperly structured foreign ownership.
Success in legal disputes depends heavily on having complete documentation, proper contract registration with relevant authorities, and compliance with all Indonesian property laws from the initial purchase through ongoing ownership.
What are the classic mistakes or pitfalls foreigners often make?
Foreign buyers in Bali repeatedly fall into predictable traps that can result in significant financial losses or legal complications.
- Nominee Ownership: Using Indonesian friends or partners as legal owners provides zero protection and frequently leads to property loss
- Skipping Due Diligence: Failing to verify clear title, ownership history, or zoning compliance
- No Independent Legal Review: Relying solely on agent or seller recommendations for legal counsel
- Green Zone Purchases: Buying agricultural land without proper conversion permits
- Developer Research Neglect: Investing in off-plan projects without verifying developer financial stability
- Overpaying Premium Areas: Paying Bangkok or Singapore prices for properties in areas with limited infrastructure
- Ignoring Lease Renewal Terms: Not securing favorable renewal options in leasehold agreements
These mistakes are entirely preventable with proper legal guidance and thorough market research before committing to any property purchase.
What taxes, fees, and extra costs should you expect, with a full breakdown?
Property acquisition in Bali involves multiple fees and taxes that typically add 8-12% to the purchase price, depending on the ownership structure chosen.
| Fee/Tax Type | Rate/Amount | Who Pays |
|---|---|---|
| Land and Building Acquisition Tax (BPHTB) | 5% of property value | Buyer |
| Notary and Legal Fees | 1-2% of transaction | Buyer |
| Real Estate Agent Commission | 2-5% of sale price | Usually seller |
| Annual Property Tax (PBB) | 0.5% of assessed value | Owner (annually) |
| PT PMA Company Setup | $2,000-$4,000 | Buyer (if applicable) |
| VAT on New Construction | 11% of value | Often included in price |
| Stamp Duty | Fixed amount (~$50) | Buyer |
Additional ongoing costs include annual company maintenance for PT PMA structures ($1,000-$2,000), property management fees if using rental services (8-15% of rental income), and potential lease extension costs that should be negotiated upfront.
Can you pay in cash, or do mortgages exist for foreigners—and if so, under what rates and conditions, and what are the best tips to secure one?
Cash payments dominate foreign property purchases in Bali, as mortgage options for non-residents are extremely limited and often impractical.
Indonesian banks rarely offer mortgages to non-resident foreigners, and when available, terms are typically unfavorable with interest rates of 9-12% annually, requiring 40-50% down payments and extensive income documentation. Banks prefer lending to foreigners with established Indonesian businesses or long-term residence permits.
For foreigners seeking financing, the most viable options include securing a mortgage against property in your home country, establishing a PT PMA company with significant paid-up capital to improve bank relationships, or partnering with specialized international lenders who understand Indonesian property law.
The most practical approach remains cash purchase, given the relatively lower property prices compared to Western markets and the complexity of securing favorable financing terms as a non-resident.
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 requires navigating complex legal structures but offers significant opportunities for both investment returns and lifestyle enhancement.
Success depends on using proper legal ownership structures, conducting thorough due diligence, and working with qualified professionals who understand Indonesian property law and foreign buyer requirements.
Sources
- Coco Development Group - Bali Real Estate Investment
- Bali Real Estate - Foreign Buyer Guide
- Golden Bee Estate - Bali Property Analysis
- Exotiq Property - Legal Framework Guide
- Neginski - Foreign Property Ownership 2025
- Emerhub - Bali Property Purchase Process
- Ilot Property Bali - Buying Guide
- Coco Development - Legal Regulations Guide
- ILA Global Consulting - Property Purchase Guide
- Investing in Bali - Remote Purchase FAQ