Buying property in Bali as a foreigner

Foreigners cannot own land in Bali outright. They can still hold property for decades, through a lease, a right of use, or a company. The structure decides what the buyer can do with the villa, how long they keep it and what happens if things go wrong. This is what a broker must explain in October 2026.

The short version

1. Hak Milik, the Indonesian freehold, is reserved for Indonesian citizens. Foreigners cannot hold it.
2. Most foreign buyers in Bali use a leasehold (Hak Sewa), usually 25 to 30 years with options to extend.
3. A foreigner with a residence permit can hold a house under Hak Pakai, the right of use. In Bali the house must cost at least Rp5 billion, or Rp2 billion for an apartment.
4. Investors who will rent commercially often use a PT PMA, a foreign-owned company that can hold Hak Guna Bangunan (HGB).
5. Nominee deals, where an Indonesian holds title for a foreigner, are void in court. The nominee is treated as the owner.
6. Buyers pay BPHTB (up to 5%) on a transfer. Sellers pay 2.5% final income tax on a transfer, and lessors pay 10% on lease income.
7. Check zoning before anything else. Since September 2025, Bali has stopped new villas and hotels on productive farmland.

Why there is no freehold for foreigners

The 1960 Basic Agrarian Law (UUPA) allows only Indonesian citizens to hold Hak Milik. Hukumonline cites Articles 21(1) and 26(2) of that law as barring foreign nationals. What foreigners domiciled in Indonesia can hold is Hak Pakai (right of use) and Hak Sewa untuk Bangunan (a right to lease land for building), under Articles 41, 42 and 45 of the same law and Government Regulation 18 of 2021 (PP 18/2021).

Option 1: leasehold (Hak Sewa)

This is the most common structure in Bali. The foreigner leases the land, and often a villa on it, from an Indonesian owner who keeps the Hak Milik title.

• Emerhub (June 2026) says leases typically run 25 to 30 years with options to extend, and that extensions can take the total up to about 80 years.
• The lease must be in writing and notarised by a licensed Indonesian notary.
• At expiry, the property reverts to the landowner unless an extension has been agreed. Ask for a written extension clause with the price or the formula fixed now.
• Global Investments notes that the lease is usually paid as a lump sum, so check there is no ongoing ground rent.
• No residence permit is needed for a leasehold, according to Neginski.

Tax on leases. The lessor pays a final income tax of 10% of the gross rent (Emerhub). When a leaseholder later sells the remaining term, Rumavi explains that the assignment is taxed as rental income, not as a property transfer: 10% for Indonesian tax residents, and 20% for non-residents unless a tax treaty reduces it, on the gross price, even at a loss.

Option 2: Hak Pakai for a home

A foreigner who holds an immigration document can own a house or an apartment under Hak Pakai. Hukumonline sets out the rules under PP 18/2021 and Minister of ATR/BPN Regulation 18/2021:

• Houses must be in the luxury category, limited to one plot per person or family, and the land may not exceed 2,000 m². The ministry can allow more if the investment brings economic or social benefits.
• Hak Pakai on state land runs up to 30 years, extendable by 20 and renewable by 30. On Hak Milik land, it is granted by a PPAT deed for up to 30 years and can be renewed by a new deed.
• If a Hak Milik or HGB house is bought, the right converts to Hak Pakai.
• Foreign heirs can inherit, provided they hold immigration documents.

Minimum prices in Bali under Kepmen ATR/BPN 1241/2022 (Hukumonline):

Property type	Minimum price in Bali
House (rumah tapak)	Rp5 billion
Apartment unit (sarusun)	Rp2 billion

For members of the Indonesian diaspora, the minimum is 75% of these figures.

Hukumonline found no specific sanction for buying below the minimum, but the land office will not register a right that does not meet the rules, so treat the threshold as a hard floor.

A long stay permit is the usual way to qualify. The second home visa, launched in Bali in October 2022, allows stays of five to ten years for applicants who show at least Rp2 billion in funds (Tempo).

Option 3: a PT PMA holding HGB

A foreign-owned company (PT PMA) can hold Hak Guna Bangunan, the right to build. Neginski describes HGB as granted for 30 years, extended by 20 and renewed by 30, each step needing a formal application. This route fits investors who will rent the villa commercially.

• Infiniti reports that BKPM Regulation 5/2025 lowered the minimum paid-up capital for new PT PMAs to Rp2.5 billion, while the declared investment must still exceed Rp10 billion.
• The company needs the right KBLI codes, a tax number, monthly tax filings and an office.
• In February 2026, the Ministry of Investment flagged misuse of the real estate code KBLI 68111 for short-term villa rentals, nominee shareholders and virtual offices in Bali, and proposed stricter checks (Bali Villa Realty).

A PT PMA is a real business with running costs. It is not a shortcut to freehold.

Nominee deals: why they fail

A nominee arrangement puts Hak Milik in the name of an Indonesian, while side agreements give the foreigner control. Hukumonline reports a Supreme Court judge describing these as an evasion of the law that fails the “lawful cause” requirement of the Civil Code, so they are void. The Supreme Court has annulled such agreements in several cases and recognises the nominee as the legal owner, free to sell or mortgage. The foreigner can at most sue the nominee for compensation.

Hukumonline also notes that the 2007 Investment Law prohibits agreements stating that company shares are held on behalf of someone else, so nominee shareholders in a PT PMA carry the same risk. In February 2026, the Ministry of Investment named nominee shareholders among the abuses it wants to stop in Bali (Bali Villa Realty). A broker who arranges a nominee deal exposes the buyer to losing everything.

Taxes and costs on a purchase

Cost	Who usually pays	Rate	Source
BPHTB (acquisition duty)	Buyer	Up to 5% of the value above a tax-free threshold of at least Rp80 million	Hukumonline
PPh final on the transfer	Seller	2.5% of the gross value	Directorate General of Taxes
VAT on new builds from a developer	Buyer	12% headline, about 11% effective on non-luxury property, 12% on luxury	DJP, Global Investments
Notary and PPAT	Usually shared	Up to 1%, often 0.5% to 1%	Global Investments
Independent lawyer	Buyer	Rp20 million to Rp60 million	Global Investments

Worked example: Hak Pakai house at Rp5 billion

• BPHTB: (Rp5,000,000,000 minus an Rp80,000,000 threshold) × 5% = Rp246 million
• Seller’s PPh: Rp5,000,000,000 × 2.5% = Rp125 million
• Notary and PPAT at 0.75%: Rp37.5 million

The threshold differs by regency, so the notary confirms the exact figure. Global Investments notes that BPHTB on leases may be assessed differently, so ask the notary which base applies.

The 2026 VAT incentive. Under PMK 90/2025, the government pays the VAT on the first Rp2 billion of a new, ready-to-occupy house or apartment priced up to Rp5 billion, for handovers from January to December 2026 (Katadata). The report does not say whether foreign buyers qualify, so check with the developer’s tax adviser.

Due diligence

• Title. Get a copy of the land certificate, usually an SHM for Hak Milik, and have the lawyer check it at the BPN land office for charges, disputes and the registered owner.
• The signatory. Make sure the person signing owns the land, and that every co-owner or heir consents.
• Zoning. See the next section.
• Building permit. Check for a PBG (or an old IMB) and an SLF certificate of fitness for use.
• The deed. Transfers of land rights can be registered only with a deed by an authorised PPAT, under PP 24/1997 (Hukumonline). A PPJB is a preliminary agreement and does not by itself transfer ownership.
• Rental licences. If the buyer will rent the villa, check the licences and tax registration for tourist accommodation.
• The local community. CNA Indonesia (February 2026) reports that investors also need a working understanding with the banjar and the customary village, or operations can be disrupted even with all permits in hand.

Zoning and the 2025 halt on farmland

Bali’s spatial plans divide land into zones. Bali Exception describes green zones as agricultural land where construction is heavily restricted, yellow for housing, pink for tourism, red for commercial and orange for mixed use. The Gistaru map of the Ministry of ATR/BPN shows zoning across Indonesia, and Badung has its own app. Neginski says HGB for a PT PMA is generally possible only in tourism, commercial or mixed zones.

In September 2025, after floods that hit six of Bali’s eight regencies, Governor Wayan Koster announced that Bali would issue a regional regulation barring the conversion of productive farmland into villas, hotels and restaurants. Homes would be allowed only for owners who live in them (The Jakarta Post). TravelMole reported that projects already under construction were not affected and that no end date was set. Tirto reported in July 2025 that the governor had already signed an instruction barring permits for tourism facilities on productive farmland, and ordered the demolition of 48 unlicensed buildings at Bingin beach.

We could not confirm in October 2026 that the final regional regulation had been passed. Treat any plot in a green zone, or on rice fields, as unbuildable for a villa until a planning office confirms otherwise in writing.

What a broker must explain

• That the buyer will not own the land outright, and which right they are getting.
• How long the right lasts, how it is extended, and what that costs.
• That nominee structures are void.
• The taxes on purchase, on rental income and on a later sale.
• That zoning and building permits decide whether the villa can be built and rented.
• That the buyer should instruct an independent lawyer, separate from the seller’s notary.

Indonesian land and tax rules change often, and Bali’s zoning rules changed in 2025. This guide was checked on the date shown above. It is general information, not legal or tax advice. CloserPass is not affiliated with any authority or agency.

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