Leasehold or Freehold in Bali for Foreigners: What to Choose in 2026

A foreigner in Bali faces two main property ownership formats: leasehold and freehold. Understanding the difference is the first step toward a sound deal. Freehold (Hak Milik) means full private ownership. Under Indonesia’s UUPA land law of 1960, Hak Milik was long closed to foreigners. In 2024, the Bali regional office of the Ministry of Law and Human Rights publicly stated that a foreigner can buy and own a Freehold property under two conditions: having a passport and a visa (even a visa on arrival, VOA), and a property value starting from 5 billion rupiah — approximately $300,000. Sounds like a win? Not so fast. A regional statement does not override national law. In practice, this is still a gray area: such transactions may be technically possible, but they require strong legal structuring, and in a dispute there remains a risk of reclassification. That is why most foreigners in Bali choose the second route — leasehold. Leasehold (Hak Sewa) is the right to use the land and property for a fixed term, usually 25–30 years, with an option to extend for another cycle. The agreement is registered with a notary. The landowner formally remains Indonesian, but during this period you control and monetize the property. What is important to know about leasehold: — The term is not “forever”: once it ends, the rights return to the landowner. The property value depreciates over time, and this should be factored into your yield calculations. — The extension price is usually fixed in advance. Make sure the amount is written into the initial contract. — Under leasehold, you cannot build without the landowner’s consent. Alternative structures on the market: Nominee Freehold means Hak Milik is registered in the name of an Indonesian “friend,” while you control it through a parallel loan arrangement. This structure directly violates the law and regularly collapses in court. Any conflict with the “nominee” owner can leave you without both the money and the property. Never go into a nominee structure. Hak Pakai is a right of use available to foreigners with KITAS. It is similar to leasehold for 30+30+20 years. Less common, but legally clean. PT PMA (a foreign investment company) is a separate structure through which you can hold HGB (Hak Guna Bangunan, right to build) for 30+20+30 years. Suitable for serious portfolios and business operations. The short answer to “what to choose”: — One villa for rental income — leasehold for 25–30 years with the right to extend. — Budget from $300k for a family home for years — discuss Freehold or Hak Pakai with a lawyer. Be prepared for nuances. — A portfolio of several properties or a business — open a PT PMA and operate through HGB.