Buying Property in Bali as a Foreigner: What Is Legally Possible

Under Indonesia's Basic Agrarian Law (Law No. 5 of 1960), the strongest form of land ownership — Hak Milik, or freehold — is reserved for Indonesian citizens. A foreign individual cannot hold Hak Milik in their own name. This is a national rule, so it applies in Bali exactly as it does anywhere else in Indonesia. What the law does allow are other forms of rights over property, each with its own conditions.

Hak Pakai (right to use)

Hak Pakai is the main route for a foreign individual who wants to hold a residential property in their own name. It gives a right to use land and the building on it for a fixed term, which can be extended, rather than outright ownership of the land. In general, it is intended for personal residential use, requires the buyer to hold a valid Indonesian stay permit, and is subject to restrictions on the number and type of property and on price thresholds that vary by location. Because these conditions and the applicable terms are set by regulation and have been updated over time, they should be confirmed against current rules before any commitment is made.

Leasehold (hak sewa)

A lease is a contractual arrangement rather than a land title. The foreign party leases land or a property from the owner for an agreed term, often with an option to extend. Leases are widely used in Bali, but their protection depends heavily on the quality of the contract: the term and extension rights, what happens if the owner sells the land, permitted use, and how the lease is documented before a notary.

PT PMA and business use

A foreign-owned company (PT PMA) can hold rights such as Hak Guna Bangunan (right to build) for business purposes, for example a hospitality or commercial villa operation. This route comes with company licensing, reporting, and tax obligations, and it is designed for genuine business activity rather than as a way to hold a private home. See our overview of establishing a company in Indonesia for how a PT PMA is structured.

The risk of nominee arrangements

A common shortcut is to register land in the name of an Indonesian citizen while the foreign buyer pays for it and relies on a private side agreement. These nominee arrangements are designed to achieve indirectly what the law does not allow directly. The Basic Agrarian Law provides that transfers which directly or indirectly pass ownership rights to a foreigner can be void by law, with the land reverting to the state. Even where the arrangement is not challenged, the foreign party typically has little reliable legal protection if the nominee sells, dies, or disputes the arrangement.

Due diligence before buying or leasing

• Verify the land certificate and the identity and authority of the seller, including any spousal consent
• Check the title status and any encumbrances, mortgages, or disputes at the land office
• Confirm zoning and permitted use, including restrictions on protected agricultural land and coastal setbacks, which are particularly relevant in Bali
• Check building approvals for any existing structure
• Make sure the transaction is documented through a land deed official (PPAT) or notary, as required
• Understand the taxes and fees involved at purchase, during ownership, and on resale

Mixed marriages

Where a foreigner is married to an Indonesian citizen, how property is held is closely tied to the couple's marital property regime. This is why a registered marital agreement is often considered, as explained in our article on prenuptial agreements in Indonesia.