By Elly, IPA
For many investors I meet, the biggest hesitation when buying in Bali is: “Can I really own property as a foreigner?” The answer is: yes—but not in the same “freehold land as a citizen” sense. Here’s a breakdown of what you must know.
Ownership titles & what’s allowed
The Indonesian Basic Agrarian Law (Law No. 5/1960) governs land rights.
As a foreign individual, you cannot directly own freehold (“Hak Milik”) land in Bali.
What you can do:
Acquire a “leasehold” interest (long-term lease) on land or property.
Acquire the “Right to Use” title (“Hak Pakai”) under certain circumstances.
Set up a foreign-owned company (PT PMA) and hold assets under its structure—but this brings other complexity.
Key practical tips
Always check the lease term length (e.g., 25, 30, 40 years) and whether extension rights exist.
Ensure the lease agreement is properly registered at the land office.
Factor in tax, management and legal costs (see our blog #4).
Work with reputable legal advisors and conveyancers—not just agents—because mistakes happen. Many investors overlook jurisdictional risk.
Insist on full due diligence (title search, zoning, local community rights).
Typical foreign-investor models
Buy a villa under a leasehold in a resort operator or management structure, then rent it out via the resort.
Buy via a PT PMA as part of a development group.
Buy an off-plan property with exit/resale clauses—but beware of higher risk.
Risk factors to highlight
Lease expiry without extension may reduce value.
Local zoning, agricultural land conversion, and community rights can introduce complications.
Some investor promises of “full freehold” remain misleading or risky. Reddit commentary warns:
> “It is unlikely that anyone can generate 20 % ROI consistently, even with massive risk taking.”
In summary:
Foreign investment in Bali real estate is absolutely possible—but you must understand what you are buying, under which title, with what rights. At IPA we always advise working with trusted local legal specialists, and creating a buy-strategy that fits both the legal framework and your investment goals.
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