How off-plan villas work in Bali

Off-plan villas are a large part of what foreign buyers see in Bali: renders on Instagram, a plot in Canggu, Uluwatu or Ubud, and a payment plan stretched over construction. Indonesia has rules for developers who pre-sell homes, but many Bali deals sit outside them because they are leaseholds. A broker needs to know which protections apply, and which do not.

The short version

1. Most off-plan villas sold to foreigners in Bali are leaseholds or are held through a PT PMA. Foreigners cannot buy the land freehold.
2. When a developer pre-sells houses, the PPJB (preliminary sale agreement) must be made before a notary, and only once five conditions are met, including at least 20% of construction.
3. The developer needs a PBG (building approval) before building, and an SLF (certificate of fitness for use) before anyone can use the villa. The PBG replaced the old IMB.
4. We found no compulsory bank guarantee on off-plan payments for Bali leasehold villas, unlike Spain’s. The buyer’s protection is the contract, milestone payments and the developer’s track record.
5. Rental guarantees are only as good as the operator, and since 2026 unlicensed rentals are being removed from booking platforms.
6. Zoning comes first. Since September 2025, Bali is stopping new villas on productive farmland.

The legal framework

PP 12/2021 on housing. Hukumonline explains that a PPJB is the preliminary agreement made before a notary ahead of the final deed. For landed houses it is signed during construction, and for apartments it can be signed before construction. Under Article 22I(5), a developer can sign a PPJB only after it has certainty on:

1. The status of land ownership.
2. What is being sold.
3. The building approval (PBG).
4. Public infrastructure, facilities and utilities.
5. Construction of at least 20%.

A PPJB does not transfer ownership on its own. The transfer happens through a deed before a PPAT (land deed official), which the land office then registers (Hukumonline, February 2025). If the developer breaks the PPJB, the buyer’s remedy is a civil claim for breach of contract at the district court where the developer is based.

Leasehold off-plan is different. When a foreigner buys an off-plan villa on leased land, the paperwork is usually a notarised lease of the land plus a construction or sale agreement for the villa. The PPJB conditions above are written for developers selling houses and apartments. Ask the buyer’s lawyer which rules, if any, protect the payments in the specific deal.

Building permits: PBG and SLF

Government Regulation 16 of 2021 (PP 16/2021) reorganised building permits. Hukumonline sets out the three documents:

• PBG (Persetujuan Bangunan Gedung): the approval to build, alter or extend a building, which must meet the technical standards. It replaced the IMB, the old building permit, which is no longer issued.
• SLF (Sertifikat Laik Fungsi): issued by the regional government to confirm the building is fit for its function. It is required before the building can be used. It is valid for 20 years for single and terraced houses and 5 years for other buildings.
• SBKBG: proof of ownership of the building, issued together with the SLF through the SIMBG system.

For an off-plan sale, the PBG should exist before you market the project, and the SLF is the document that proves the villa can be occupied and, with the right business licences, rented.

A typical payment schedule

Developers set their own schedules. The example below is for illustration only, for a Rp4 billion leasehold villa.

Stage	Payment	Paid to date
Reservation	Rp100 million	Rp100 million
Signing of lease and build agreement (to 30%)	Rp1.1 billion	Rp1.2 billion
Structure complete (to 60%)	Rp1.2 billion	Rp2.4 billion
Roof and finishing (to 90%)	Rp1.2 billion	Rp3.6 billion
Handover with SLF	Rp400 million	Rp4 billion

Illustrative example, not a market average.

Without a statutory guarantee, tie each payment to a verifiable milestone, ideally confirmed by an independent engineer, and keep a meaningful share for handover. Pay only into an Indonesian bank account in the name of the developer company that signs the contract.

Rental guarantees

Many projects promise a fixed yield for the first years, often through a management company linked to the developer. Before a client relies on one:

• Ask who pays the guarantee, and from which company’s account.
• Check whether the guarantee is in the main contract or a side letter.
• Check that the villa will have the licences to rent to tourists. In February 2026 the Bali government asked Airbnb to confirm that every listed villa holds full permits and pays tax, and to remove those that do not (DDTCNews). Emerhub lists rental operations without commercial permits among the main risks for leaseholders.
• Factor in the regional tax on hotel services (PBJT, often still called PHR). DDTCNews applied a 10% rate in February 2026.
• Remember that a guarantee paid from new buyers’ money stops when sales stop.

In February 2026 the Ministry of Investment also flagged misuse of the real estate business code KBLI 68111 for short-term villa rentals by foreign-owned companies in Bali, and proposed stricter checks (Bali Villa Realty). An off-plan project marketed on rental income needs the right company and the right codes.

The farmland halt and zoning

Bali’s planners have been trying to slow construction since 2024. In September 2024, the province proposed a two-year moratorium on new hotels and nightclubs (The Jakarta Post). In September 2025, after deadly floods, Governor Wayan Koster announced a regional regulation that would bar converting productive farmland into villas, hotels and restaurants, with homes allowed only for owner-occupiers (The Jakarta Post). TravelMole reported that projects already under construction were not affected.

For off-plan, this matters twice. A project on farmland may not get its PBG, and an existing PBG may be reviewed. In July 2025, Tirto reported that the governor ordered the demolition of 48 unlicensed buildings at Bingin beach. Check the zone on the Gistaru map of the Ministry of ATR/BPN and with the local planning office. Bali Exception describes green zones as farmland where construction is heavily restricted.

Taxes on new builds

• VAT applies to new builds bought from a VAT-registered developer. Under PMK 131/2024, the headline rate is 12%, but non-luxury goods and services are taxed on 11/12 of the price, an effective 11%. Luxury goods pay the full 12% (Directorate General of Taxes). Global Investments notes that luxury homes pay the full 12% and that resale leaseholds between individuals are generally outside VAT.
• The 2026 VAT incentive. PMK 90/2025 has the government pay the VAT on the first Rp2 billion of a new, ready-to-occupy home priced up to Rp5 billion, handed over in 2026 (Katadata). It applies to completed homes, so most off-plan villas delivered after 2026 will not benefit.
• Later resale. If the buyer sells a leasehold villa, Rumavi explains that the assignment is taxed as rental income: 10% of the gross price for tax residents, 20% for non-residents unless a treaty reduces it.

See Buying property in Bali as a foreigner for acquisition taxes.

What to check on the developer and the project

• The land. A copy of the land certificate, checked at the BPN land office, and the identity of the Indonesian landowner if the project is leasehold.
• The lease. Its start date. A 30-year lease that started before construction loses years while the villa is being built.
• Zoning confirmed in writing for the intended use.
• The PBG number, and later the SLF.
• The company. Its NIB and KBLI codes on OSS, its real office, and whether it is a PT PMA with real capital.
• Nominees. Any structure where an Indonesian holds the land or shares “for” the developer or the buyer is void in court (Hukumonline).
• The community. CNA Indonesia reports that projects without an understanding with the local banjar and customary village can face protests even with permits.
• Track record. Completed projects the buyer can visit, with SLFs.

Red flags

• Marketing a project with no PBG, or saying “the IMB is coming”.
• Plots on rice fields or in a green zone.
• Payments to a personal account or to a company abroad.
• A rental guarantee in a side letter from a different company.
• A lease clock that starts before construction.
• A developer that asks the buyer to use an Indonesian nominee.

Bali’s construction and zoning rules changed in 2025 and enforcement on rentals increased in 2026. 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 developer.

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