Buying property in Bali

Leasehold (Hak Sewa): a right of use for a fixed term

• The land or villa is taken for a set term under a long-term lease with its owner; the price is mostly paid once, up front.
• The term is written in the lease and differs from property to property (from a few years up to 30). When it ends, the property goes back to the owner.
• An extension is not automatic: the right to extend, its term and its price (or how it is set) must be written in the lease, as must the terms for transfer, subletting and inheritance.
• The lease is made before a notary (notaris) in Indonesia.

Freehold (Hak Milik): for Indonesian citizens only

Full ownership (Hak Milik) is only for Indonesian citizens (Basic Agrarian Law, UU 5/1960 art. 21). A Hak Milik passed to a foreigner is void by law (art. 26(2)). A foreign buyer cannot take a property listed as "freehold" as Hak Milik in their own name; they can acquire it by one of the routes below.

Routes for foreigners

• Hak Pakai (right of use): a foreigner with a valid Indonesian residence permit can acquire a home to live in under Hak Pakai. The term is at most 30 years, extendable by 20 and renewable for 30 (PP 18/2021). Limits such as a minimum price apply and differ by region.
• HGB through a PT PMA: an Indonesian company with foreign capital (PT PMA) can hold Hak Guna Bangunan (right to build); HGB is also granted for 30 + 20 + 30 years (PP 18/2021). A company brings capital, licence and yearly reporting duties, and the property must fit the company's business.

Nominee arrangements are not legal

Agreements that hold a property or company shares in an Indonesian citizen's name while saying they really belong to a foreigner are void: for shares under the Investment Law (UU 25/2007 art. 33), for land under the Basic Agrarian Law (art. 26(2)). This route risks losing both the money and the property.

Notary / PPAT and the checks before buying

• Land rights pass before a PPAT (land deed official) and are registered at the land office (BPN); a leasehold is made before a notary.
• Certificate check at the land office: the real owner, any mortgage or dispute.
• Zoning: whether the area allows living in or renting out a villa.
• Building permit: PBG (formerly IMB) and the certificate of fitness for use, SLF (PP 16/2021).
• For a leasehold: the term left, extension and transfer terms, and the consent of all the landowner's heirs.
• Taxes and costs should be set out in writing before paying. We advise asking your own lawyer and the notary.