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Leasehold vs freehold in Bali comes down to who you are. Freehold land, called Hak Milik, can only be held by Indonesian citizens. A foreigner cannot own freehold land in Bali or anywhere else in Indonesia. What a foreigner can hold is a lease (Hak Sewa), a right of use (Hak Pakai) with a residence permit, or a right to build (Hak Guna Bangunan, HGB) through a foreign-owned company. This guide explains each one in general terms, what the notary or PPAT does for it, and the checks to run before you sign. It is general information, not advice on your case.
What is freehold (Hak Milik) and who can hold it?
Hak Milik is the strongest land right in Indonesia and has no end date. The Basic Agrarian Law (Law 5 of 1960) reserves it for Indonesian citizens. A person who holds a foreign passport next to an Indonesian one cannot hold it either.
Two rules matter for foreigners. First, any sale, gift or other act meant to pass Hak Milik to a foreigner, directly or indirectly, is void by law, and the land falls to the State. That is why a nominee arrangement, where an Indonesian holds freehold on your behalf, gives you no protection at all. Second, a foreigner who receives Hak Milik through inheritance without a will, or through mixed marital property, must give it up within one year. If not, the right ends by law.
The PPAT's role. Freehold moves only by a PPAT deed of sale (AJB). The PPAT checks the certificate at the land office (BPN), collects the buyer's and seller's taxes and registers the transfer. For an Indonesian buyer this is the normal route. For a foreigner it is closed.
What is Hak Guna Bangunan (HGB)?
HGB lets the holder put up and own buildings on land for a set term: 30 years, extendable by 20 and renewable by 30, so up to 80 in total. Indonesian citizens and companies set up under Indonesian law can hold it, including a foreign-owned PT PMA. A holder who stops qualifying has one year to transfer the right.
The notary's and PPAT's roles. The notary makes the PT PMA's deed of establishment. The PPAT makes the deed that grants or transfers the HGB to the company. Before either, the company's business activity has to be open to foreign investment at that location in Bali, so this route starts with the company, not the land.
What is Hak Pakai and can a foreigner hold it?
Hak Pakai is the registered land right a foreigner can hold in their own name. It is open to foreigners who live in Indonesia and hold a residence permit (KITAS or KITAP). Under the current government regulation on land rights, a Hak Pakai on state land runs up to 30 years, can be extended by 20 and renewed by 30. A Hak Pakai can also be created on someone's Hak Milik land by a PPAT deed, for up to 30 years and renewable by a new deed. The years have been changed by regulation before, so the current rule is confirmed for each case.
A home held by a foreigner this way is subject to limits set by the land ministry on minimum price, land area and number of properties. The house can pass to heirs, and a foreign heir must also hold the right immigration documents. A Hak Pakai ends if the holder no longer meets the conditions, so plan what happens if your residence permit lapses.
The PPAT's role. The PPAT makes the deed that grants or transfers the Hak Pakai, and it is registered at BPN, where it appears on a certificate.
How does leasehold (Hak Sewa) work in Bali?
Most foreigners in Bali hold a villa or land through a lease. A lease is a private contract with an Indonesian landowner, not a title issued by BPN. Its length, price and any extension are whatever the contract says, and there is no right to renew in law. If the owner dies, all heirs with a share usually have to agree to an extension. Tax on the rent is 10% of the gross rent, and the law puts it on the landowner.
The notary's role. The lease is made as a notarial deed, in Bahasa Indonesia with an English version when a foreigner signs. A notarized lease is far stronger evidence than one signed under hand. Current land regulation also lets an interested party apply to record a lease at the land office, noted in the register and on the certificate. Practice varies between the Badung and Gianyar offices, so the notary confirms it first. See villa and land lease agreements.
How do leasehold and freehold compare for a foreigner?
- Freehold (Hak Milik). Not available to foreigners, ever. Nominee structures are void.
- Lease (Hak Sewa). No residence permit needed. Protection depends on the deed, the term and the person who signed as owner.
- Right of use (Hak Pakai). A registered right in your own name, tied to your residence permit and to the land ministry's limits.
- Right to build (HGB) through a PT PMA. A registered right held by the company, which needs a real business activity open to foreign investment.
What should I check before choosing a title?
Whichever title you choose, check the land before money moves:
- Verify the certificate at BPN and confirm the type of right and any end date.
- Confirm the person signing is the registered owner, or holds a valid power of attorney, and that the certificate was updated after any inheritance.
- Get the encumbrance record for mortgages, liens and disputes.
- Check the zoning under the regional spatial plan. Green zones are heavily restricted.
- Confirm boundaries and legal access with a survey.
- Check the building permits (IMB or PBG) and the SLF, and any unpaid land and building tax.
- For customary or inherited land, find out who must consent.
These checks generally take a few weeks, because some need answers from government offices. If a dispute turns up, do not proceed until it is resolved. See property due diligence in Bali, and for the full purchase steps, buying property in Bali.
Where is the deed signed?
A PPAT can only make a land deed for land in the regency where the PPAT is appointed, so a deed for land in Gianyar needs a Gianyar PPAT. Our principals hold both the notary and the PPAT appointment. The Kerobokan office handles company deeds, leases and Badung land deeds directly, and works with Gianyar counterparts for land around Ubud.
