Leasehold or Freehold in Bali for a foreigner: what to choose in 2026
AB
Andrei Balinsky
Founder of Balinsky
A foreigner in Bali deals with two main forms of property ownership: leasehold and freehold. Understanding the difference is the first step to a sound deal.
Freehold (Hak Milik) — full private ownership. Under the Basic Agrarian Law (UUPA of 1960, Art. 21), Hak Milik is closed to foreigners, and this rule has not changed.
So where does the talk about "freehold for a foreigner from 5 billion rupiah" come from? That is a different right — Hak Pakai (right of use) on a house. Government Regulation No. 18/2021 allows a foreigner with an immigration document to register a house under Hak Pakai, and in Bali the minimum house price for this is set at 5 billion rupiah. This right does not become ownership (Hak Milik).
That is why most foreigners in Bali take the second route — leasehold.
Leasehold (Hak Sewa) — the right to use land and a property for a fixed term, usually 25–30 years, with an option to extend for one more cycle. The contract is signed at a notary. It is not registered with the land agency (BPN): all the protection is in the text of the contract. The landowner formally remains Indonesian, but for the whole term you control the property and earn from it.
What is important to know about leasehold:
— The term is not "forever": when it ends, the rights return to the landowner. The property's value depreciates over time — this needs to be built into your yield calculation.
— The extension price is usually fixed in advance. Write the amount into the original contract.
— Under a leasehold, you cannot build without the landowner's consent.
Alternative schemes on the market:
Nominee Freehold — Hak Milik is registered to an Indonesian "as a friend", and you keep control through a parallel loan. This scheme directly breaks the law and regularly falls apart in court. Any conflict with the "nominee" owner, and you can be left with neither the money nor the property. Never go for a nominee.
Hak Pakai — a right of use available to foreigners. The term on state land is 30 + 20 + 30 years. Unlike a leasehold, it is recorded in the land register. In practice, notaries usually ask for a residence permit (KITAS or KITAP) — check in advance.
PT PMA (a foreign-capital company) — a separate scheme; through it you can hold HGB (Hak Guna Bangunan, the right to build) for 30+20+30 years. It suits serious portfolios and businesses.
The short answer to "what to choose":
— One villa to rent out — a leasehold for 25–30 years with the right to extend.
— A budget from 5 billion rupiah (about $300k) for a family for years — discuss Hak Pakai with a lawyer.
— A portfolio of several properties or a business — set up a PT PMA and work through HGB.
Editorial note
Balinsky editorial team · 12 October 2026.
Update: we removed the claim that a foreigner can get freehold (Hak Milik) on a visa from 5 billion rupiah. That is the price threshold for the right of use (Hak Pakai), while Hak Milik is closed to foreigners. We corrected the Hak Pakai terms (30 + 20 + 30, not 30 + 30 + 20) and clarified that a leasehold is not registered with the land agency.
Source: Land Law No. 5/1960, Art. 21 — https://pasal.id/peraturan/uu/uu-no-5-tahun-1960/pasal-21; Government Regulation No. 18/2021 — https://pasal.id/peraturan/pp/pp-no-18-tahun-2021