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Andi Refandi
Andi serves as a Senior Account Executive on Emerhub’s global team.
From bustling cafés in Canggu to luxury cliffside villas in Uluwatu, Bali’s property market continues to attract foreign investors and expatriates. However, Indonesia’s land laws prohibit foreigners from directly owning land, meaning you’ll need to explore legal alternatives to purchasing property.
This guide breaks down land ownership in Bali for foreigners, covering legal property rights, key land titles, due diligence steps, tax obligations, and how Emerhub can help streamline the process.
An Overview of Land Ownership Rights in Bali
Indonesia’s Agrarian Law No. 5/1960 governs land ownership in Bali, with Hak Milik (Right of Ownership) being the only title that grants permanent, unrestricted ownership.
This allows the holder to sell, inherit, transfer, or use the land freely, making it the most secure form of land ownership in Bali. However, Hak Milik is strictly reserved for Indonesian citizens, meaning foreigners cannot directly own land under this title. Instead, you will have to rely on alternative legal structures to acquire and use property in Bali, primarily through:
- Personal ownership: Obtain Hak Pakai (Right to Use), which allows you to use land for residential or commercial purposes. You can also lease land (Hak Sewa) for up to 80 years, with possible renewals, but this does not grant absolute ownership rights.
- Corporate ownership: Establishing a PT PMA (foreign-owned company) allows access to additional land titles, including Hak Guna Bangunan (HGB – Right to Build) for property development and Hak Guna Usaha (HGU – Right to Cultivate) for agricultural purposes.
The table below outlines the key land titles in Bali and their availability to foreign individuals and PT PMAs:
| Land Title | Purpose | Eligibility for Foreign Individuals | Eligibility for PT PMA |
| Hak Milik (Right of Ownership) | Full and permanent land ownership | No | No |
| Hak Guna Usaha (HGU – Right to Cultivate) | Agricultural purposes, including plantations, fisheries, and animal husbandry. | No | Yes |
| Hak Guna Bangunan (HGB – Right to Build) | Construction of buildings for personal or business use. | No | Yes |
| Hak Pakai (HP – Right to Use) | Utilization of land for specific purposes, such as residential or commercial use. | Yes | Yes |
| Hak Sewa (Right to Lease) | Leasing land for building purposes. | Yes | Yes |
What Land Certificates Can You Obtain in Bali
Depending on whether you want to build, lease, or develop property in Bali, you can secure land rights for specific periods through Hak Pakai (Right to Use), Hak Guna Bangunan (Right to Build) or Hak Guna Usaha (Right to Cultivate). Each title has its own terms, renewal options, and requirements. Here’s how you can legally acquire property in Bali:
- Hak Pakai (HP)– Right to Use: This allows foreigners to use land for residential or commercial purposes. It is typically granted for an initial term of 25 years, extendable up to 70 years. Hak Pakai is transferable to Indonesian citizens or renewable if sold to another foreign purchaser.
- Hak Guna Bangunan (HGB)– Right to Build: If you’re looking to develop property, this title allows you to construct and own buildings for up to 50 years. However, you’ll need to set up a foreign-owned company (PT PMA) to obtain it.
- Hak Guna Usaha (HGU)– Right to Cultivate: Primarily intended for agricultural purposes, HGU allows you to cultivate state-owned land through a PT PMA. It is granted for an initial period of 35 years and can be extended for 25 years.
How to Ensure a Secure and Legally Compliant Lease Agreement in Bali
Essential Due Diligences Before Property Acquisition in Bali
Many foreign investors focus on property location and price but often overlook critical legal and regulatory checks. Skipping these due diligence steps can result in legal complications, costly fines, or even the inability to use the property as intended. Emerhub helps you ensure a smooth property acquisition by handling all the key due diligence steps on your behalf, such as:
- Land Title Verification: Confirm the authenticity of land certificates and ensure the seller has the legal right to transfer the property.
- Zoning Regulations and Building Permits: Each regency in Bali enforces its own zoning laws. Since official zoning maps may not always be updated, confirming the land’s intended use with local authorities is essential.
- Check Outstanding Taxes and Liabilities: Ensure there are no unpaid taxes, outstanding debts, or legal disputes associated with the property that can affect ownership rights.
Other critical factors include road access rights and existing agreements such as long-term leases or inheritance claims that could impact your ownership. For a deeper dive into important considerations when buying property in Bali, explore our detailed guide on Property Due Diligence, or get in touch with our experts via the form below.
Fulfilling Land and Property Taxes in Bali
Property transactions in Bali come with specific tax obligations for both buyers and sellers. Understanding these costs upfront can help you budget accordingly and avoid unexpected expenses. Below is an overview of the key taxes to consider when purchasing land:
| Tax Type | Description | Rate | Borne By |
| PPh (Income Tax) | Tax on income from property sales. | 5% | Seller |
| Purchase and Ownership Tax (BPHTB) | Tax on the acquisition of land and building rights. | 5% of the transaction value | Buyer |
| Annual Land & Building Tax (PBB) | Annual tax on land and buildings. | Varies based on property value | Owner |
| BPN Official Fee | Fee for processing land title transfer at the National Land Agency (BPN). | Approximately 1% of property value | Buyer |
| Value Added Tax (PPN) | Tax on the delivery of taxable goods and services. | 11% | Buyer |
| Luxury Tax (PPnBM) | Additional tax on luxury properties valued at or exceeding IDR 30 billion (approximately USD 2.1 million) | 20% | Buyer |
| Notary Fee | Fee for notary services in drafting and processing legal documents. | Varies (typically 0.5% to 1% of property value) | Buyer |
Emerhub’s local experts take care of these crucial checks by conducting a full property verification, liaising with all parties involved (from land offices to notaries and local authorities), and addressing potential risks before they become problems. Our team also assists with securing essential building permits, and with structuring your investment under a PT PMA for full legal protection.
Want to safeguard your property investment in Bali? Get in touch with our experts through the form below!
FAQs About Land Ownership in Bali
No, Indonesian law restricts freehold land ownership (Hak Milik) to Indonesian citizens. However, foreigners can still acquire property in Bali through alternative legal structures, such as Hak Pakai (Right to Use) or long-term lease agreements. These options provide a secure way for foreigners to use or invest in land while complying with Indonesian regulations.
Foreigners can lease land in Bali for an initial period of up to 25-30 years, with options to extend for a total of up to 80 years, depending on the lease agreement. It’s crucial to structure the lease properly to ensure long-term security and legal protection.
Each regency in Bali enforces its own zoning regulations, which determine whether a property can be used for residential, commercial, or tourism purposes. To confirm a property’s zoning status, you must check with the National Land Agency (BPN) and local government offices. Since zoning maps may not always be up to date, conducting a formal verification is essential before purchasing or leasing land.
A PT PMA (foreign-owned company) can legally acquire land in Bali, but only under specific land titles. The most common options are Hak Pakai (HP), Hak Guna Bangunan (HGB), which allows the company to build on the land, and Hak Guna Usaha (HGU), which is intended for agricultural or commercial use. These land titles must be registered under the company’s name and require periodic renewals.
Before purchasing property in Bali, it’s crucial for you to review several key documents to ensure the transaction is legally sound. These include documents such as:
- Land certificate (Hak Pakai, HGB, or HGU): To verify ownership rights
- Building permit (IMB) or the updated PBG system: To confirm construction approval
- Zoning confirmation: To ensure the land can be used for your intended purpose
- Tax clearance records: To check for any outstanding land and property taxes
If you need assistance with due diligence, zoning verification, or structuring a secure property agreement, our team is here to help. Reach out for expert guidance today!
