Leasehold Property

Buying property in Bali as leasehold is the best option for someone who has a limited budget and possibly also wants to make passive income from renting out their property but doesn’t want to go through setting up a company in Indonesia or applying for a residence permit.The name leasehold, as the name suggests, refers to buying the rights to the property for a certain period of time. This means that the land title remains under the ownership of the original owner and the foreigner leases the land for an initial period of 25 years that can be extended until a total of 80 years based on the original agreement. After the lease begins, the owner’s hak milik title will be legally transferred to the foreigner under the right to lease/rent (hak sewa) title. 

Like with freehold property, you are allowed to sell or pass on leasehold property as inheritance to your family or sublease or rent it out. If the leasehold is not renewed once it expires, all rights go back to the original owner and it becomes freehold property again. Price- and tax-wise, leasehold is usually a better option than freehold, but it also means that if you’d at any point during the lease wish to sell the property, the value will have declined due to there being less years left on the lease.

For foreigners who want a more secure and legal way to hold property in Bali, the two main ownership options are through licenses known as Right to Use (Hak Pakai) and Right to Build (Hak Guna Bangunan / HGB). These titles allow you to occupy and use land without actually owning it outright — a practical alternative to freehold ownership reserved for Indonesian citizens. Both can be renewed and extended for up to approximately 80 years in total, depending on the terms and compliance with regulations.

Both options offer a secure way to invest in Bali real estate while staying compliant with Indonesian law. Choosing between Hak Pakai and HGB depends on your long-term goals — whether you want a private residence or a property for business and investment.

The steps below provide a complete overview of the legal, administrative, and practical procedures involved in purchasing property in Bali. This includes preparing documents, conducting due diligence, working with a licensed notary, signing agreements, paying taxes, registering the title, and finalizing the transaction. The table summarizes all 16 essential steps to help foreign buyers understand the entire process from start to finish.