How to Buy a Villa in Bali
Buy Villas in Bali Editorial Team · Last reviewed
Buying a villa in Bali is not a single transaction but a sequence of legal, administrative and financial steps that differ significantly from residential purchases in most Western countries. Indonesian land law (based on the Basic Agrarian Law, UUPA No. 5/1960) restricts direct freehold ownership to Indonesian citizens, so foreign buyers must choose among a small set of legal structures, each with different rights, costs and risks.
This guide sets out the general sequence — from choosing a structure, through due diligence on the land certificate, to signing before a notary/PPAT and registering the transaction with the National Land Agency (ATR/BPN). It is written for orientation only. Every purchase should be verified by a licensed notary/PPAT, an independent lawyer and a tax advisor before any money changes hands.
Step 1: Decide which legal structure fits your situation
Foreigners cannot hold Hak Milik (freehold) directly. The realistic options are Hak Pakai (Right to Use, available to foreign individuals holding a qualifying Indonesian residence permit), a long-term Hak Sewa (leasehold) arrangement with the Indonesian landowner, or setting up a PT PMA (a foreign-owned investment company) that can hold land under Hak Guna Bangunan (Right to Build) for commercial use such as villa rental.
The right structure depends on whether the villa is for personal residence, retirement, or commercial rental, and on your immigration status. This decision should be made with a notary and, ideally, a tax advisor before you commit to a specific property.
Step 2: Property search and reservation
Once the intended use and structure are clear, the search itself is largely commercial rather than legal — comparing location, remaining lease term (if applicable), build quality, licensing status and land size. Reservation agreements (booking fees) are common but should be reviewed by a lawyer before signing, since terms on refundability vary widely.
Step 3: Legal due diligence on the land and building
- Verify the underlying land certificate (Sertifikat Hak Milik, HGB or Hak Pakai) directly with the local ATR/BPN land office, not only via documents provided by the seller.
- Check that the land is free of disputes, encumbrances (mortgages/hak tanggungan) and overlapping claims.
- Confirm zoning (RTRW/RDTR) allows the intended use, and check whether a building permit (PBG, formerly IMB) and, for commercial use, a business licence via OSS (oss.go.id) are in place or obtainable.
- If buying via a PT PMA, verify the company's legal standing and licensing with BKPM/OSS.
Step 4: Structuring the transaction
| Structure | Who can use it | What is actually acquired |
|---|---|---|
| Hak Pakai | Foreign individuals with a qualifying residence permit under PP 18/2021 | A registrable right to use land for a fixed, renewable term |
| Hak Sewa (leasehold) | Any foreign individual, via private contract | A contractual lease right, not a registered land right against third parties in the same way as Hak Pakai |
| PT PMA holding HGB | A duly licensed foreign-owned company | Corporate right to build/use, typically for commercial/rental operation |
| Nominee arrangement (Hak Milik held by an Indonesian nominee for a foreigner) | Not a legal path | No enforceable ownership for the foreigner; carries significant legal risk and is not recommended |
Step 5: Signing before a notary/PPAT
The actual transfer or grant of rights is executed before a notary who is also a licensed PPAT (Pejabat Pembuat Akta Tanah). The notary drafts the deed, checks tax clearance, and lodges the registration with ATR/BPN. Fees, applicable taxes (such as land and building acquisition duty, BPHTB, and income tax on the seller's side) and the notary's own fee should be confirmed in writing before signing, since rates and thresholds can change and vary by region.
Step 6: Registration and handover
After signing, the notary registers the new right or the updated certificate with the local ATR/BPN office. Only once registration is complete should final payment and physical handover of the villa take place, unless your lawyer advises a different sequencing appropriate to your specific contract.
Common pitfalls to avoid
- Relying only on the seller's copy of the land certificate instead of an independent check at ATR/BPN.
- Treating a nominee arrangement as a safe substitute for a proper legal structure — it is not, and the nominee remains the legal owner.
- Assuming a leasehold term is automatically renewable without checking the actual contract wording.
- Skipping verification of building permits and business licensing for villas intended as rental investments.