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From the Bali Buyer's Guide
Leasehold vs freehold in Bali
Freehold is for Indonesian citizens. Here is what a foreign buyer can hold instead.
Rice fields at Buduk, west Bali
Freehold is for Indonesian citizens. Here is what a foreign buyer can hold instead.
A foreigner cannot hold freehold land in Bali. Freehold, Hak Milik, is reserved for Indonesian citizens by Article 21 of the Basic Agrarian Law of 1960. What a foreign buyer holds instead is a lease in their own name, a right of use (Hak Pakai) if they are resident, or a right to build (Hak Guna Bangunan) through an Indonesian company they own, a PT PMA.
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So the real question is not leasehold or freehold. It is which of the three you hold, and what each one lets you do.
| Freehold (Hak Milik) | Leasehold (Hak Sewa) | Right of use (Hak Pakai) | Right to build (HGB) through a PT PMA | |
|---|---|---|---|---|
| Can a foreigner hold it? | No | Yes, in your own name | Yes, if resident | Yes, through the company |
| How long | Indefinite | The term on the deed, often 25 to 30 years | 30 years, extendable | 30 years, extendable |
| What it is | Registered ownership | A contract with the landowner | A registered right on the certificate | A registered right held by the company |
| Suits | Indonesian citizens | Most foreign buyers of a villa | Residents buying a home | Letting commercially, developing |
The terms for Hak Pakai and HGB are set by Government Regulation 18 of 2021: 30 years, extendable by 20, then renewable for 30.
You will see villas advertised to foreigners as freehold. There are only two ways that can be true for you.
The land is held by a company. A PT PMA you own holds Hak Guna Bangunan over it. That is legal, but it is not freehold, it is a company you have to keep, with its own capital, reporting and tax returns every year. PT PMA, and when it is overkill sets out the numbers.
The land is in an Indonesian citizen's name, with side agreements giving you control. That is a nominee arrangement. Article 26 of the Basic Agrarian Law makes it void from the start, and since Perda Bali 4 of 2026 came into force on 24 February 2026, arranging one is also prohibited. Nominee ownership in Bali explains why.
If a listing says freehold and does neither, ask whose name is on the certificate.
A lease gives you the right to use the land and the villa on it for a fixed number of years, under a contract signed before a notary, in your own name. You can live in it, let it if the property is licensed for that, sell the years that remain and leave them in a will.
What matters is the end date on the deed, not the number of years in the advert. A villa sold as 30 years may have 26 left by the time you sign. Compare two leases by what each year left costs you: the lease calculator does it in your currency.
When the lease ends, what happens to the building is whatever the deed says. Read that clause before you sign, along with the extension clause. How leasehold works in Bali and lease extensions cover both.
Hak Pakai is a right of use registered on the land certificate, not a contract, and Article 42 of the Basic Agrarian Law allows foreigners domiciled in Indonesia to hold it. In practice that generally means a residence permit (KITAS or KITAP), and there are minimum price rules for houses bought this way. Sources disagree on the details, so have your notary confirm the current requirement in writing before you plan around it.
Buying a villa to use, or to let through a manager: a lease, in your own name. It is how most foreign buyers hold a villa in Bali, and everything we list is offered this way.
Living here on a residence permit and buying a home: ask your notary about Hak Pakai.
Letting commercially, developing to sell, or holding several properties: a PT PMA holding HGB, with the running costs that come with it.
Anything described as freehold to a foreigner: stop and ask whose name is on the certificate.
The price is agreed and your lawyer reviews the memorandum of understanding before anything is paid. A 10% deposit is held in escrow by the notary and is refundable if due diligence comes back unsatisfactory. The seller releases the documents, the notary runs due diligence, usually 30 to 60 days, and then the binding agreement is signed. Our process and the documents your notary checks cover each step.
Ask your notary: which right will I hold, in whose name, until what date, and what happens to the building at the end?
This page describes publicly available law and practice and is not legal or tax advice. Bali Property Sourcing is a real estate agency and buyer's agent, not a law firm. Land rights and permit rules change and are applied locally. Instruct your own notary before you commit money.
A listing that says freehold to a foreign buyer is either selling a company or selling a nominee deal. Ask us which, before you pay anything. Your notary checks the title before the sale goes ahead.
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