How a Foreigner Can Buy Property in Bali: a Step-by-Step Guide

In short

A foreigner cannot hold Bali land in full freehold ownership: the Hak Milik title is reserved for Indonesian citizens. Three legal routes exist. The first is a long-term lease (leasehold, Hak Sewa), usually 25–30 years with an extension option. The second is the right of use (Hak Pakai), available to holders of an Indonesian stay permit and meant for a personal home. The third is buying through your own foreign-owned Indonesian company (PT PMA) holding a Hak Guna Bangunan building right, which suits rental business and portfolios. A «nominee» arrangement, where an Indonesian citizen holds the title for you, is not recognised by law and puts your money at risk. Every deal goes through a state notary (PPAT) with mandatory legal checks of title, zoning and building permits. The steps below follow the real order of a purchase.

1. Can a foreigner own property in Bali?

Land in full ownership (the Hak Milik title) is available only to Indonesian citizens. For a foreigner the law leaves three working options, and the right one depends on the goal: a home for yourself, income from rental, or a business.

Leasehold (Hak Sewa): the most common route

Leasehold means the Indonesian owner keeps the land title and you receive a contractual right to use the property for a fixed term. The usual term is 25–30 years with an option to extend. Your entire protection is the contract, so three points must be checked before signing: who controls the extension terms, how the extension price is calculated, and whether sub-letting and assignment of the lease are allowed. Leasehold suits a non-resident buying a villa for personal use or for income.

Hak Pakai (right of use): for holders of a stay permit

Hak Pakai is a title tied to residence. A foreigner can register a property under Hak Pakai in their own name when they hold a stay permit (KITAS or KITAP). The title is designed for a personal home, so it works poorly for a rental business. Published terms differ between sources (from 25 years with extensions and longer), so the term for your case is confirmed with the notary.

PT PMA with Hak Guna Bangunan: for business and rental

A foreigner can set up an Indonesian company with foreign ownership (PT PMA), and the company holds the land right, most often Hak Guna Bangunan (the right to build), typically for up to 30 years with extensions. This is the more serious structure for commercial rental, development and a portfolio of properties. The downside is ongoing obligations: licences, reporting and zoning compliance.

What not to do: nominees

«Buying like a local» by registering the property in an Indonesian citizen's name under a verbal agreement is not ownership but a risk. Indonesian law does not recognise the scheme: in a dispute you may lose both the property and the money. Anyone offering to «get around the law through a nominee» is a red flag.

More on titles and areas in our guide «Real estate investment in Bali: legal aspects and locations».

2. The purchase process step by step

1. Define the goal and the ownership form. A home for yourself, rental income or a business decides the choice between leasehold, Hak Pakai and PT PMA. Everything else follows from this.
2. Select the property and check the location. Look beyond price and view at the zoning of the plot: residential or tourism zone versus a «green» (agricultural) zone where building and renting are not allowed. The area sets the demand: Canggu attracts digital nomads and short stays, Seminyak tourists, Ubud wellness guests, the Bukit peninsula premium buyers with ocean views.
3. Run legal due diligence. Before any deposit the notary checks the title and certificate (Hak Milik of the seller, HGB, Hak Pakai), the absence of encumbrances and disputes, the building permits (IMB/PBG), and for new builds the developer's permits and track record. This step filters out most problem deals.
4. Reserve the property and sign the preliminary agreement. Price, term and conditions are fixed and a deposit is paid. Every agreement goes on paper, not by word.
5. Complete the deal with the notary (PPAT). The state notary PPAT prepares and certifies the lease agreement or the deed of sale (AJB) and confirms that taxes are paid before signing. A leasehold contract is read to the letter: term, extension, exit, liabilities of each side.
6. Pay and settle taxes and fees. Payment follows the checks. The buyer pays the acquisition tax and related fees (see the section below).
7. Register the right and take over the property. Registration with the land office (BPN), handover, acceptance act. For a new build, acceptance against a checklist.
8. Launch management. For an income property a management company takes over guest check-in, maintenance and reporting. Its fee is usually 15–20% of income, but without management occupancy drops and payback stretches.

3. How to check a property: what to look at

• Title and certificate. Which title the seller holds and which one you will receive. The certificate must exist, be «clean» and match the seller's details.
• Zoning. Whether housing, construction and tourist rental are allowed on the plot. A «green zone» or an unregistered title kills liquidity: such a property is hard to resell.
• Building permits (IMB/PBG). Since 2021 the old IMB has been replaced by PBG (building approval) and SLF (certificate of fitness for use). A building without them is outside the law and may never be legalised.
• Encumbrances and disputes. Mortgages, seizures, inheritance and land disputes.
• The developer (for new builds). Permits, financial stability, completed projects. Promised yields of «20%+» usually hide a weak location or missing permits.

Typical buyer mistakes are collected in «5 mistakes to avoid when buying property in Bali».

4. Taxes and buyer's costs

Exact rates depend on the region and the year and are confirmed by the notary/PPAT at the deal. Guidance for the main items:

Legal due diligence is a separate cost line. In Bali it costs money but saves many times more than a loss on a problem deal. Current rates and incentives (the VAT incentive is extended periodically) are calculated for the specific property.

5. Visas and residence

Buying property does not grant residence automatically. Options for a long stay:

• Second Home Visa. Issued for several years (usually 5 or 10), without the right to work and without permanent residence. The condition is proof of funds in an Indonesian state bank or a qualifying property; the amounts are set by immigration and we check them on the official portal for your case.
• KITAS / KITAP. A stay permit, also required to register a property under Hak Pakai in your own name.
• Golden Visa. An investor track with a higher investment threshold.

One important detail: staying 183+ days a year makes you an Indonesian tax resident on worldwide income. This is planned in advance.

6. Common mistakes

• Registering through a nominee «to buy like a local»: loss of protection and the risk of losing the property.
• Buying without a zoning check: a «green zone» where building and renting are prohibited.
• Ignoring building permits (IMB/PBG) of a finished property or a developer.
• Believing in «20%+» yields without a calculation: behind them is usually a weak location or missing permits. The realistic net yield of a quality property is 8–12%.
• Buying «for growth» without a management plan: without a management company occupancy halves.

7. How to buy safely with Legion Real Estate

Legion Real Estate is a licensed investment real estate agency in Bali and Phuket (PT LEGION REAL ESTATE, business registration NIB 1605230015786). We guide the foreign buyer through every stage: property selection for the goal and budget, legal due diligence, choice of ownership form, notary support, completion of the deal and launch of rental management. We work in English, Russian and Ukrainian.

Want a shortlist of properties with a yield calculation for your task? Leave a request and we will send options with numbers and verified titles.

Contact: Bali +62 (21) 5099-69-01, WhatsApp +62 (895) 001-976-098. The catalogue and the request form are on the website.

FAQ

Can a foreigner buy property in Bali as freehold?

No. Direct freehold ownership of land (Hak Milik) is reserved for Indonesian citizens. A foreigner has three legal routes: a long-term lease (leasehold), the right of use Hak Pakai with a stay permit, and a purchase through their own company PT PMA.

What is leasehold and for how long is it granted?

Leasehold is a long-term lease: you use the property for a fixed term under a contract, usually 25–30 years, with an option to extend. It is the most common route for foreigners. Check the extension terms and price and the right to assign the lease in advance.

Is it safe to register property under an Indonesian nominee?

No. The nominee scheme is not recognised by Indonesian law and risks the loss of both the property and the money. The legal routes are leasehold, Hak Pakai and PT PMA.

Which taxes does the buyer pay in Bali?

The main one is the acquisition tax (BPHTB), up to 5% of the value minus a non-taxable threshold. New builds from a developer may carry PPN (VAT, about 11%), with a 100% government incentive in 2026 for ready homes up to IDR 2 billion. Add notary/PPAT fees and registration fees. Exact rates depend on the region and the year and are confirmed by the notary.

Does buying property give a residence permit?

Not automatically. For a long stay there is the Second Home Visa (against funds in a bank or a qualifying property) and KITAS/KITAP. Staying 183+ days a year makes you an Indonesian tax resident.

How do I check a property before buying in Bali?

Check the title and certificate, the zoning of the plot (whether building and renting are allowed), the building permits (IMB/PBG), the absence of encumbrances and disputes, and for new builds the developer's permits and reputation. This legal due diligence is best entrusted to an agency or a lawyer before paying a deposit.

What is the real yield of property in Bali?

The net annual yield of a quality property under professional management is about 8–12%, in some cases up to 15%. Promises of «20%+» usually hide a weak location or missing permits.

Sources and where to verify

• Indonesian land agency ATR/BPN (atrbpn.go.id): titles Hak Milik, HGB, Hak Pakai, registration.
• OSS business licensing system (oss.go.id): PBG/SLF building approvals, company registration.
• Ministry of Finance regulation PMK 90/2025: 2026 VAT incentive on new homes.
• Directorate General of Immigration (imigrasi.go.id): Second Home Visa, KITAS/KITAP, Golden Visa.
• Legion Real Estate deal records 2023–2026: typical terms, costs and yields quoted above.