Off-Plan Property in Bali: Risks, How to Choose a Developer and How Payment Stages Work
By Alex Guliaiev, founder of Legion Real Estate · Published 11 October 2026 · Updated 11 October 2026
The largest real estate agency in Bali has been finding the best options for its clients for many years. The Legion Real Estate team helps buy and sell not only coveted square meters but also established businesses. In short, they understand all the pitfalls of the local market. They shared with our readers the five most common mistakes and offered advice on how to avoid them.
In short
Buying off-plan in Bali means buying a promise, not a finished property. The price is usually 15–30% below a completed equivalent, payment is made in stages as construction progresses, and income starts only after handover. The main risks are not market risks but document risks: land not registered to the developer, no PBG building approval, a leasehold term that already runs from the contract date rather than handover, and delays with no penalty for the developer. All of them are closed before any payment, by checking the developer and by a contract with stages tied to verified progress. Below: what to check, how to pay, and when to walk away.
1. What off-plan means in Bali and why it is cheaper
Off-plan is the purchase of a villa or apartment before construction is finished, based on the plans and a contract with the developer. The developer raises buyers' money to build, so it sells below the finished price: in Bali the gap to a completed equivalent is usually 15–30% depending on the stage. Price growth from launch to handover is the off-plan buyer's main gain, on top of future rental income.
The price of the discount is time and uncertainty. Money is locked for the 12–24 months of construction, rental income appears only after handover, and final quality and timing depend on the developer. Off-plan in Bali is therefore an investment in the developer as much as in the property.
2. The risks of buying under construction
| Risk | What it looks like | How it is closed |
|---|
| Land not owned by the developer | The developer builds on someone else's land or on land with an unsettled lease. The property can never be registered to you. | Land certificate (Hak Milik or HGB) in the name of the developer or its company, free of encumbrances; for a sub-lease, a head lease longer than yours. |
| No building approval | Construction without PBG (the building approval that replaced IMB in 2021). The building may never be legalised or may be demolished. | PBG obtained before works start; SLF (certificate of fitness) issued at completion and required for legal rental. |
| Zoning | A plot in a «green» (agricultural) zone: building and renting prohibited, resale difficult. | Zoning statement: residential or tourism zone. |
| Leasehold term running from the contract date | A 30-year lease signed at launch, handover two years later: 28 years of income remain. | Term counted from handover, or compensation of the term in the contract. |
| Delay and unfinished construction | Deadlines slip, works stop, the advance is stuck. | Delay penalty in the contract, stage payments against verified progress, exit right with refund. |
| Quality below promise | Materials and layouts worse than the renders, hidden defects. | Material specification as a contract annex, defects liability period of 6–12 months, acceptance against a checklist. |
| Money going sideways | Payments to a manager's personal account or to another company. | Payments only to the developer company named in the contract, with a payment reference. |
3. How to check a developer: the checklist before the first payment
- Legal entity. The developer is a registered Indonesian company (PT or PT PMA) with an NIB registration number and the relevant business code. The company signs the contract, not an individual.
- Land. The land certificate is registered to that company (Hak Milik held by the Indonesian partner or HGB held by the company). If the developer leases the land itself, its lease is longer than yours and allows sub-letting and sale.
- Zoning and permits. The plot is in a residential or tourism zone; PBG is obtained; SLF will follow at completion. No PBG, not a single rupiah.
- Completed projects. At least one finished project you can visit and whose buyers you can talk to. Promises without completed projects are first-project risk.
- Construction funding. Does the developer build with its own funds or only with buyers' advances? In the second case, if sales stop, construction stops.
- Contractor and specification. Who builds, on what budget, with which materials. The specification is attached to the contract.
- Contract terms. Payment stages against progress, delay penalty, acceptance procedure, defects warranty, refund and exit terms, start date of the leasehold term.
Indonesian Government Regulation No. 12/2021 allows a developer to sign a preliminary sale and purchase agreement (PPJB) only when the land status is confirmed, the building approval is in place and construction has reached at least 20%. If you are offered to «reserve from the render» long before that, you are lending to the developer without protection. The notary confirms the current conditions.
4. How off-plan payment stages work in Bali
A typical Bali payment schedule is tied to construction stages, not to the calendar. Market guidance (exact shares depend on the project):
| Stage | Share of price | What must be confirmed |
|---|
| Reservation | 5–10% or a fixed amount | Unit taken off the market, price fixed; refundable if the document check fails |
| Contract signing | 20–30% | Land, PBG and company checks passed; contract with stages and penalties signed |
| Foundation, structure, roof | 15–20% per stage | Photo record and stage completion certificate |
| Finishing and services | 10–15% | Compliance with the specification |
| Handover and acceptance | 5–10% | Acceptance certificate without defects, SLF, keys and documents handed over |
Two rules protect the buyer. First: every payment follows a verified stage, not a letter saying «we are almost done». Second: the last payment only after acceptance against a checklist, otherwise nobody will fix the defects.
5. How much you can earn and when income starts
Off-plan returns have two parts. The first is price growth from launch to handover: across Legion Real Estate deals in 2023–2026 the gain at handover usually sits within 15–30%, not the «2x in a year» of advertising. The second is rental after handover: the net yield of a quality property under professional management is 8–12% a year, with a management fee of 15–20% of income.
Income starts no earlier than handover and ramp-up of occupancy, usually 2–4 months after acceptance. The calculation includes 12–24 months of construction plus that period: off-plan payback is counted from the first payment, not from handover.
6. Taxes and costs for a new-build buyer
A new build from a registered developer carries PPN (VAT, about 11%). In 2026 the government covers 100% of PPN on ready new homes priced up to IDR 2 billion from a VAT-registered developer, one unit per person (regulation PMK 90/2025); for homes up to IDR 5 billion the incentive applies to the first IDR 2 billion. Add the acquisition tax BPHTB of up to 5% minus a non-taxable threshold, notary/PPAT fees of 0.5–1% and registration fees. Exact rates and incentive conditions are confirmed for the specific property.
7. When to walk away from a project
- No land certificate in the name of the developer or its company, or «documents in progress».
- No PBG while construction is already under way.
- Payment «by calendar» with no link to progress, or 50%+ up front.
- Payments to a personal account or to another company.
- Guaranteed yields of «20%+» and a promise of «2x in a year».
- A developer with no completed projects and no office in Bali.
- A contract without delay penalties, a warranty period and refund terms.
8. How to buy a new build in Bali with Legion Real Estate
Legion Real Estate is a licensed investment real estate agency in Bali and Phuket (PT LEGION REAL ESTATE, NIB 1605230015786). For new builds we check the developer, the land and the permits before the first payment, verify the contract stages and penalties, monitor construction through stage certificates and accept the property against a checklist. We work in English, Russian and Ukrainian.
Want a shortlist of verified projects under construction with the price at handover and the yield calculated? Leave a request.
Contact: Bali +62 (21) 5099-69-01, WhatsApp +62 (895) 001-976-098. The catalogue and the request form are on the website.
FAQ
Is off-plan property in Bali a good investment?
Yes, when the developer is verified: the land is registered to its company, the PBG approval exists, payments follow verified construction stages and the contract carries delay penalties. The gain is a price 15–30% below a finished property. Without those conditions, off-plan becomes an interest-free loan to the developer.
What are PBG and SLF and why not buy without them?
PBG is the building approval that replaced IMB in 2021; SLF is the certificate of fitness issued at completion. Without PBG the construction is illegal and may never be legalised; without SLF the property cannot be rented out legally.
How should I pay for a new build in Bali without losing money?
Only to the developer company named in the contract and only against verified stages: reservation 5–10%, contract 20–30%, then by stage certificates, the last 5–10% after acceptance against a checklist.
When does the leasehold term start for an off-plan purchase?
By default from the contract date, so you lose 1–2 years of the term during construction. The right way is from the handover date or with compensation of the term, written into the contract.
How much can you earn on a new build in Bali?
Price growth to handover is usually 15–30%, followed by a net rental yield of 8–12% a year under management. Promises of «2x in a year» and «20%+ guaranteed» are the mark of a problem project.
Which taxes does a new-build buyer pay in Bali?
PPN (VAT) of about 11% on a unit from a registered developer, with the government covering 100% of PPN in 2026 on ready homes up to IDR 2 billion; BPHTB of up to 5% minus a threshold; notary 0.5–1%; registration fees. The notary confirms the rates.
Sources and where to verify
- Indonesian Government Regulation No. 12/2021 (conditions for a developer's PPJB).
- OSS licensing system (oss.go.id): PBG, SLF, company registration.
- Land agency ATR/BPN (atrbpn.go.id): certificates, encumbrances.
- Ministry of Finance regulation PMK 90/2025: 2026 VAT incentive on new homes.
- Legion Real Estate deals 2023–2026: typical payment stages, gain at handover, yields.
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