Leasehold or freehold on Bali: what a foreigner can own

A foreigner cannot buy freehold land on Bali. Freehold, called Hak Milik, is reserved for Indonesian citizens under the Basic Agrarian Law of 1960, and neither a visa nor a clever contract changes that.

What foreigners buy instead is a right with an end date. Most take a long lease. People who live in Indonesia can hold Hak Pakai in their own name, and investors who run a real rental business sometimes buy through a company.

Can I register a villa in my own name?

Yes, but only as Hak Pakai, a “right to use”, and only for a house used as a residence. Government Regulation No. 18 of 2021 (PP 18/2021) names foreigners among those who can hold a fixed-term Hak Pakai. On state land it is granted for up to 30 years, extended for up to 20 and then renewed for up to 30 more. That is where the “80 years” in brochures comes from.

If the Hak Pakai sits on someone else’s Hak Milik land, it runs for up to 30 years and can be renewed only by a new deed with that landowner. After the first term you depend on the owner’s goodwill.

The conditions are strict:

The property has to be residential. The regulation limits foreigners’ housing by minimum price, plot size, number of plots and residential use.
On Bali the minimum price is IDR 5 billion for a house and IDR 2 billion for an apartment unit, under ministerial decree No. 1241 of 2022.
One plot per person or family, up to 2,000 m², in the luxury-house category, according to AKSET Law’s summary of the implementing circular.
You need Indonesian immigration documents. Under the old 2015 rules this meant a stay permit such as a KITAS or KITAP. Since PP 18/2021 a visa, passport or stay permit is formally enough.
If you stop qualifying, for example because you leave Indonesia for good, you have 1 year to sell or transfer the right. After that it lapses by law.

Hak Pakai suits a family that has moved to Bali for good. For a villa you plan to let to tourists it is the wrong tool, because the title is tied to residential use.

What exactly do I get with a leasehold?

Leasehold gives you a contract with the landowner, not a title. Hak Sewa, the lease, is not a land title. The Nusantara Legal Partnership guide published by Legal 500 describes it as the right to use land owned by another party “on purely contractual basis”. Registration is not required, because a lease is not a land title, and foreign individuals and companies can hold one. Indonesia has no separate statute for property leases, so the term and the price of any extension are whatever the contract says.

Leasehold is the usual route for foreigners because it needs neither a residence permit nor a company. In a 2024 piece in The Jakarta Post’s Weekender, Terje Nilsen of Seven Stones Indonesia, a legal and market-entry advisory firm, put leases at “probably 75 to 80 percent of the market”. The villas advertised to the author were offered on leases of 25 to 29 years.

The Civil Code gives a tenant two protections. A lease does not end when the landowner or the tenant dies (Article 1575). A sale of the property does not cancel an existing lease unless the lease itself allowed that (Article 1576). So if the landowner sells the plot, your lease stays in force, provided your contract does not say otherwise.

Everything else has to be in the contract:

the land certificate number, the term and the exact start date;
the extension price or a formula for it, written as a number, not “to be agreed”;
your right to sublet, including short-term rentals;
your right to sell or assign the lease (by default a tenant may not sell or sublease, according to the same Legal 500 guide);
who pays the annual land and building tax (PBB), which in practice the landlord usually carries;
what happens to the house when the lease ends.

Is a lease worse than owning?

The difference shows near the end of the term. When the lease expires, the land goes back to the owner, and the contract decides what happens to the house. A 25-year lease signed in 2026 ends in 2051. As the remaining term shrinks, so does the resale price, because the next buyer gets fewer years.

Buy enough years for your plans and fix the extension terms on the day you sign. With three years left on the lease you have little to bargain with.

When does a PT PMA make sense?

A PT PMA is an Indonesian limited company with foreign shareholders. It can hold Hak Guna Bangunan (HGB), the right to build. PP 18/2021 grants HGB only to Indonesian citizens and to legal entities set up under Indonesian law, and foreign investment companies count as such entities. On state land HGB runs for 30 years, extendable by 20 and renewable by 30.

The company costs money to keep. Since 2 October 2025 the minimum paid-up capital is IDR 2.5 billion, about USD 150,000, down from IDR 10 billion, according to the law firm HBT. The minimum total investment is still more than IDR 10 billion per business line per location, and for accommodation businesses land and buildings count towards it. The company also files an investment activity report (LKPM) every quarter.

For one family villa this is usually too much overhead. It starts to make sense when you run a rental business with several units.

Why not put the land in an Indonesian friend’s name?

This is the nominee scheme, and it fails on paper and in court. Article 26(2) of the Agrarian Law says that any act meant to pass Hak Milik to a foreigner, directly or indirectly, is void by law, and the land can pass to the state. The Indonesian prosecutors’ legal service, Halo JPN, notes that courts generally do not protect agreements that conflict with agrarian law.

Nelwan Law spells out what that means for the buyer. The nominee is the legal owner, and under Article 26(2) the money you paid cannot be reclaimed. The loan agreement, power of attorney and statement letters sold as protection do not help, because a contract with an illegal purpose is void along with everything built on it. Company shares held “on behalf of” a foreigner fail the same way under Article 33 of Investment Law No. 25 of 2007.

Which structure fits which buyer?

Your situation	Usual structure
A villa to rent out while you live abroad	Leasehold (Hak Sewa) with a detailed contract
You live on Bali and buy a home for yourself	Hak Pakai, a house from IDR 5 billion
A rental business with several units	PT PMA holding HGB

FAQ

Can a foreigner ever hold Hak Milik on Bali?

No, and marriage does not change that for the foreign spouse. It matters for the Indonesian spouse: they keep the right to hold land like any other citizen if a notarial agreement separates the couple’s property.

What happens to my lease if I die?

The lease does not end (Civil Code, Article 1575) and continues with your heirs. Ask for a clause that says how they take it over.

Are the “80 years” in ads real?

For Hak Pakai and HGB on state land, 30 + 20 + 30 years is the legal maximum. A lease has no statutory term. You get the years written in the contract, and an extension “by mutual agreement” is only a promise to negotiate.

Can I resell a leasehold villa?

Yes, if the contract allows you to assign the lease. Without that clause a tenant cannot sell or sublease without the landlord’s consent.

The rules and thresholds above are as of October 2026, and they change: in 2025 the minimum capital for foreign-owned companies was cut by 75%. Before you pay a deposit, have a PPAT notary and an independent lawyer check the land certificate and the contract.

Sunny Development Group builds on Bali and in Phuket. It has completed 10 projects on Bali and counts its time on the market from 2011.