Bali’s enchanting landscapes, booming tourism industries, and serene lifestyles have attracted so many international investors. But the real question is: Can foreigners legally own properties in Bali? Let’s unfold it together!

The answer is basically both can and can not, since it depends on the legal structure applied. That’s why it’s essential for foreigners to pay close attention to these important things we are about to explore together.

Understanding Property Titles in Indonesia

Indonesia recognizes several types of property ownership, but only Indonesian citizens can legally hold full ownership (Hak Milik). So, it’s crucial for foreigners to understand the property title options available in Indonesia:

1. Freehold (Hak Milik)

Freehold or Hak Milik is the strongest title of Indonesia’s property ownership. This title is not available for foreigners. Therefore, foreigners should consider this legal condition. Please avoid such illegal ways as buying the property under an Indonesian partner’s name (use nominee structure), because it is legally risky.

2. Right to Use (Hak Pakai)

The Right to Use or Hak Pakai title is a legal and available option for foreigners who hold valid residence permits, such as KITAS or KITAP. This title allows foreigners to use residential properties for up to 30 years, extendable by 20 years, with possibility of another 30 year renewal. The property may be used for personal residence or under specific conditions for rental.

3. Right to Build (Hak Guna Bangun) Through Perseroan Terbatas Penanaman Modal Asing (PT PMA)

The Right to Build or Hak Guna Bangun via PT PMA title is also the legal alternative for foreigners. The term PT PMA refers to Indonesian company owned by a foreigner. This option is very suitable for commercial projects like villas, hotels, or rental properties and granted to the company or PT PMA not the individual. Foreigners might own the buildings and lease the land for 30 years, extendable by 20 years with renewability of 30 years.

4. Leasehold Agreements (Hak Sewa)

Last but not least, there are Leasehold Agreements or Hak Sewa which can also be considered as one the legal options for foreigners’ property ownership in Indonesia. This is a flexible and legal route for both residential and commercial use, depending on zoning regulations. To be valid, the agreement must be notarized and registered with the National Land Agency (BPN). The period itself usually come up from 25-30 years, extendable up to 80 years.

Legal Requirements and Limitations Foreigners Must Know

Foreigners must also understand legal regulatory requirements and limitations. The reason why is because it is important to stay in line with the Indonesian legal constitution in order to avoid unwanted issues. Let’s have a glance!

1. Minimum Property Value

Foreigners must comply with the government-imposed minimum investment thresholds and other legal considerations before deciding to own properties in Bali. Here are some of the minimum property values:

• Landed Houses: IDR 5 Billion (5 miliar rupiah)
• Apartments: IDR 2 Billion (2 miliar rupiah)

2. Zoning Compliance

The property must be located within an approved residential or commercial zone. Always verify zoning regulations beforehand to avoid legal issues or project delays.

3. Tax Obligations

Foreigners must also fulfill tax obligations. For example, rental income is taxable under Indonesian law. It’s essential to understand the responsibility to stay compliant and avoid penalties from the respective authorities.

Best Practices for Foreigners Buying Property in Bali

Interested to be one of Bali’s property owners? We got your back! Here are some best practices to ensure a smooth and secure process:

1. Work with a Licensed Notary

Always collaborate with a licensed and reputable notary to verify, register, and legalize your agreements. This safeguards your rights and reduces the risk of fraud.

2. Consider Setting Up a PT PMA

If your intention is to invest in commercial real estate (villas, rental units, etc.), forming a PT PMA may be the safest route. This allows you to hold legal building rights under an Indonesian business entity.

3. Choose and Work Together with KosKaki

Last but not least, collaborate with KosKaki – your trusted partner in Bali real estate! Our expert team offers:

• A curated selection of handpicked properties tailored to your lifestyle or investment goals.
• Custom design and engineering support to bring your vision to life.
• Full construction oversight, ensuring every project meets high standards and timelines.

To Wrap It Up

So, can foreigners buy any property in Bali?
Yes, but under certain legal structures. While freehold ownership is off-limits, alternatives like Hak Pakai, Hak Guna Bangun via PT PMA, and Hak Sewa make it possible for foreigners to invest legally and securely.

The key is making informed decisions, following the law, and working with trusted advisors. At KosKaki, we provide professional guidance from start to finish, from choosing the right legal structure to ensuring a smooth construction process.

What are you waiting for? Contact KosKaki now and start your journey to owning the perfect property in Bali, safely, legally, and stress-free!