Lease and leasehold contracts in Bali: 6 rules that protect your money
AB
Andrei Balinsky
Founder of Balinsky
A leasehold is a contract. It does not go into the state register the way a title certificate does. So everything that protects the buyer has to be in the contract itself. Here is what to look at.
1. What exactly you get
- A lease agreement (Hak Sewa) is signed at a notary. It is not registered with the land agency (BPN).
- The register records the right of use (Hak Pakai) and the right to build (HGB). These are different rights with their own conditions.
- A nominee scheme, where land is registered to an Indonesian "on your behalf", is void by law (Art. 26 of the Land Law). You can lose both the money and the property.
More about these rights is in the article leasehold or freehold.
2. Language
By law, a contract with an Indonesian party must be in Indonesian (Language Law No. 24/2009, Art. 31). Courts have declared English-only contracts invalid. Make the contract bilingual.
3. Currency
The amount in the contract is in rupiah. More details are in the article on dollars in a contract.
4. Stamp duty (meterai)
- 10,000 rupiah per document if the amount in it exceeds 5 million rupiah.
- The party that receives the document pays. If both parties sign, each pays for its own copy.
- The contract is valid without the stamp. But to submit it to court, you will have to pay the stamp duty afterwards.
- Reusing a used stamp - up to 3 years or a fine of up to 200 million rupiah.
5. Extension
- The price and terms of extension are written in right away. A promise to "extend later" guarantees nothing.
- If the owner refuses to accept payment for the extension, it can be deposited with the court (Art. 1404 of the Civil Code). This is a last resort.
- More details are in the article on leasehold extension.
6. Notary and taxes
- The notary's fee is capped by law: from 2.5% for small amounts to 1% for large ones. The land notary's (PPAT) fee is no more than 1%.
- The landowner pays a final tax of 10% on the rent. Ask whether it is included in the price.
- You can sublet the property only with the owner's written consent.
Editorial note
Balinsky editorial team · 12 October 2026. The text has been checked against Indonesian laws in force on this date.
Update: one review said that the notary registers the lease with the land agency. This is wrong: the right of use is registered, while the lease agreement stays with the notary. We corrected who pays the stamp duty and what the penalty is.
Materials the article is based on: https://t.me/BaliLawyer/15, https://t.me/BaliLawyer/17, https://t.me/BaliLawyer/35, https://t.me/BaliLawyer/36, https://t.me/BaliLawyer/75, https://t.me/BaliLawyer/98, https://t.me/BaliLawyer/117, https://t.me/BaliLawyer/161, https://t.me/BaliLawyer/190
Sources
- Land Law No. 5/1960, Art. 26: https://pasal.id/peraturan/uu/uu-no-5-tahun-1960/pasal-26
- Government Regulation No. 18/2021 on land rights: https://pasal.id/peraturan/pp/pp-no-18-tahun-2021
- DDTC: who pays stamp duty: https://news.ddtc.co.id/berita/nasional/25261/soal-pihak-yang-terutang-bea-meterai-ini-ketentuannya
- Indonesian tax office on stamp penalties: https://www.pajak.go.id/id/artikel/ancaman-pidana-di-balik-selembar-meterai