How To Buy Property In Bali As A Foreigner – 2025 Guide

Property Ownership Rights for Foreigners:

Foreign individuals can buy property in Bali through specific titles or rights, namely leasehold and right-to-use titles. It’s important to note that freehold titles are reserved for Indonesian citizens only, and are not accessible to foreigners. Even 100% domestically owned companies are precluded from owning freehold properties. An exception exists for apartments, where foreigners can own the unit but not the underlying land, although this is rarely offered in Bali.

Alternatively, forming a foreign investment company known as a PT PMA, allows the purchase of property under a right-to-build title. This option is available for certain business activities, providing a workaround for foreign investors.

Legal Basis for Foreign Ownership:

The legal foundation for foreigners buying property in Bali is rooted in the ‘Basic Agrarian Law,’ enacted in 1960. This law designates ‘Hak Pakai’ or right to use as the sole title accessible to foreigners. Subsequent regulations, particularly Government Regulation No 41/1996 (later replaced by Government Regulation No 103/2015), outline the conditions for foreigners to obtain a ‘Hak Pakai’ title.

Land Titles:

Under Indonesian property law, there are many different land titles and ownership forms. The three primary titles are ‘Hak Milik’ (freehold), ‘Hak Guna Bangunan’ (right to build), and ‘Hak Pakai’ (right to use). These titles can be sold as either freehold or leasehold, with each carrying its own set of regulations and considerations.

Property Titles Available to Foreigners in Bali:

• • Leasehold or Hak Sewa:

    • • Simplest form of property ownership for foreigners.
    • • Terms typically vary between 25 and 30 years.
    • • No legal limit on the number of properties a foreigner can own under a leasehold.

• • Right of Use or Hak Pakai:

    • • Requires a temporary or permanent residential permit (KITAS or KITAP) or a retirement visa.
    • • Initial term of 30 years, extendable for subsequent terms.
    • • Can be converted back to freehold for sale to an Indonesian citizen.
    • • Only one property can be owned under a Hak Pakai.

• • Right to Build or Hak Guna Bangunan (HGB):

    • • Reserved for Indonesian companies, whether owned by Indonesians or foreigners.
    • • Requires forming a foreign investment company (PT PMA).
    • • Operates similarly to the right of use title regarding terms and extensions.
    • • Can be converted back to freehold for sale to and Indonesian Citizen

Taxes and Fees:

When you buy property in Bali under a leasehold agreement, buyers are tax-exempt, as the 10% seller’s tax responsibility lies with the lessor. However, for a right to use title, buyers incur a buyer’s tax of 5% of the declared value, while sellers pay 2.5%. Notary fees typically amount to 1% of the transaction value and are negotiable for higher-value transactions. Additional costs may arise when converting a title, such as from freehold to right of use. Read more in our comprehensive ‘Guide to property taxes and fees’.

Legals matters:

The pivotal figure in a land transaction is typically a notary holding a special license to function as a land agent on behalf of the government. These specialized notaries are referred to as ‘PPAT,’ an acronym for ‘Pejabat Pembuat Akta Tanah’ or ‘official to issue land titles.’ It’s crucial to note that not all notaries possess this essential qualification mandated in land transactions. In remote areas where a ‘PPAT’ notary is unavailable, a government official, such as the district head, is also authorized to act as a ‘PPAT.’

Another significant legal player in this process could be a lawyer, responsible for representing your rights and ensuring thorough due diligence is conducted before you decide to buy property in Bali.

The Process To Buy Property In Bali:

The buying process involves reaching an agreement with the seller on terms and price, usually documented in a sale and purchase agreement. A notary deposit of 10% secures the transaction, allowing for due diligence, which includes a thorough check of legal documents, permits, and physical inspections. Upon satisfactory due diligence, the final sale and purchase deed is signed in the presence of a notary, taxes are paid, and the keys are handed over.

It’s essential to stay informed, as policies surrounding property ownership for foreigners in Bali may undergo constant changes. Always seek updated information and legal advice before you consider to buy property in Bali. 

If you want to find out more about how to establish a foreign investment company and invest in property, or just have some general questions about buying property in Bali, CONTACT our team of real estate agents to get the latest information.

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Read more about the full process and considerations when Buying a Villa in Bali HERE.