How to Buy Property in Bali as a Foreigner (2025 Guide to Legal Ownership & Licenses)

🎙️ Part 1: Introduction & Legal Pathways for Foreign Ownership
Jing: Today on the Bali Business Review, we’re joined by a special guest — someone who’s made a real impact in Bali’s property law space. She’s helped countless property owners navigate legal challenges with clarity.
Welcome to the show, Ibu Sari.
Ibu Sari: Thank you, Jing. It’s a pleasure to be here.
Jing: Can you start by introducing yourself to the audience — your background, the kind of work you do, and your experience in Bali’s real estate scene?
Ibu Sari: Sure. My name is Nilu Sari, and I’m from Canggu. I run a law firm called Malekat Hukum, which means “Angel of Justice.” We’re based in Canggu, with branches in Jakarta and Jogja. Law and property have been part of my life since childhood — my late father was an architect, and my mother is a law professor. I’ve seen Bali transform from rice fields to today’s vibrant property market. My mission is to help property owners — both local and foreign — navigate the legal landscape responsibly and fairly.
Jing: That’s amazing. Roughly how many clients would you say you’ve helped?
Ibu Sari: Directly and indirectly, I’d estimate in the hundreds.
Jing: And how long have you been practicing law?
Ibu Sari: I’ve been actively practicing for about three years, but together with my partners, we have decades of combined legal experience. One of our co-founders is Professor Retno, who teaches company law at a local university.

🏠 Part 2: Can Foreigners Own Land in Bali?
Jing: Let’s jump into it. What’s the legal process for a foreigner who wants to buy or build property in Bali?
Ibu Sari: The most important step is due diligence. Before you do anything, you must check the land certificate, zoning, ownership status, and verify everything — ideally with a lawyer. Foreigners cannot directly own freehold land in Indonesia. Instead, they have two main legal pathways: (1) Establish a PT PMA (foreign-owned company) (2) Use a KITAS or KITAP (temporary or permanent residency permit)
Jing: What’s a PT PMA?
Ibu Sari: It’s a foreign direct investment company, registered in Indonesia. Through this entity, you can legally acquire land under HGB (Hak Guna Bangunan) — the right-to-build title.
Jing: And a KITAS?
Ibu Sari: A KITAS is a limited stay permit. With a KITAS (or KITAP), you can apply for a Hak Pakai title — the right-to-use — for one residential property.

🔍 Part 3: Due Diligence & Cultural Integration
Jing: Can you share some stories from your due diligence experience? What surprises have you uncovered?
Ibu Sari: Plenty. One common issue is landowners misrepresenting zoning — claiming land is buildable when it’s actually in a green zone. We’ve also seen fake IDs and unclear ownership structures, where land is owned collectively but not legally registered.
Sometimes land was inherited decades ago but never officially recorded with the National Land Agency (BPN). This creates massive complications.
Jing: Sounds like legal checks aren’t enough — you also have to understand the culture?
Ibu Sari: Yes. Some land is located near holy areas, and cultural events like full-moon ceremonies may pass through the property. It’s vital to have a relationship with the local banjar (village council).
If you’re respectful and communicate clearly, you’ll avoid 99% of potential problems.

📜 Part 4: Land Title Types in Indonesia
Jing: Let’s break down the different types of land titles in Indonesia:
1.Hak Milik (Freehold)
Ibu Sari: Hak Milik is full ownership, only available to Indonesian citizens. It’s the most secure form of land ownership — but foreigners cannot legally hold it.
2. Hak Pakai (Right to Use)
Ibu Sari: Hak Pakai is available to foreigners with a KITAS or KITAP, for one residential property only. It can be held for 30 years, extendable to 80. Minimum property value in Bali: IDR 5 billion (subject to provincial rules).
3. HGB – Hak Guna Bangunan (Right to Build)
Ibu Sari: If you establish a PT PMA, you can acquire land under an HGB title. It allows you to build and operate properties for business purposes — like villas, hotels, or commercial buildings. Valid for 30 years, extendable to 80.
4. Hak Sewa (Leasehold)
Ibu Sari: Hak Sewa is a private lease agreement. It’s not registered with the land office, and it’s the most common option for foreigners without KITAS or PT PMA. Usually 25–30 years, renewable.

⚠️ Part 5: Nominee Structures
Jing: What about using an Indonesian nominee to buy land?
Ibu Sari: That’s illegal under Indonesian law and extremely risky. While some people still use nominee arrangements, the land remains under the Indonesian’s name. If anything goes wrong, you have no legal protection. We’ve helped restructure such arrangements into legal leases or PT PMA holdings when possible.

💍 Part 6: Buying Through a Spouse
Jing: What if a foreigner is married to an Indonesian citizen? Can they buy land under their spouse’s name?
Ibu Sari: Yes — but you must sign a prenuptial or postnuptial agreement that declares separation of assets. Without that, any property bought during the marriage is considered joint, and foreigners aren’t allowed to co-own land. Some couples also use a leaseback system — where the Indonesian spouse owns the land, and the foreign spouse leases it, ensuring long-term access.

🛏️ Part 7: Pondok Wisata & Rental Licensing
Jing: What’s a Pondok Wisata, and why is it so hard to get?
Ibu Sari: Pondok Wisata is a small accommodation license, like a mini hotel or guesthouse license. It can only be held by an Indonesian citizen or a locally-owned PT — not a PT PMA. So, if a foreigner leases land, the Indonesian landlord must apply for the license. This should be negotiated at the beginning of the lease agreement.
Jing: Is there a standard cost or timeframe?
Ibu Sari: Costs vary depending on zoning, land documents, and tax history. You should always verify zoning first to ensure the license is even possible.

🏗️ Part 8: PBG, SLF, and Building Compliance
Jing: The old IMB is no longer used, right?
Ibu Sari:
Correct. IMB was replaced by: (-) PBG (Persetujuan Bangunan Gedung) – building approval before construction (-) SLF (Sertifikat Laik Fungsi) – certificate of function after construction
Jing: So you need PBG to start building, and SLF to operate legally?
Ibu Sari: Exactly. The SLF ensures the building is safe, structurally sound, and fit for use. Without it, the property is considered illegal.

🗺️ Part 9: PKKPR and Land Use Approval
Jing: And before PBG, there’s something called PKKPR?
Ibu Sari: Yes — PKKPR (Persetujuan Kesesuaian Kegiatan Pemanfaatan Ruang) is a land use approval. It confirms that your planned building fits the local zoning and spatial plan. It’s done online now via the OSS RBA system, and is mandatory before applying for PBG.

💰 Part 10: Taxes & Reporting
Jing: What tax obligations should foreign property owners be aware of?
Ibu Sari: It depends on how you hold the property:
– PT PMA: Monthly and annual corporate tax filings are required.
– Villa rentals: Must pay income tax and local accommodation tax (around 10%)
– Land and building tax (PBB): Paid annually
Unpaid taxes can lead to fines, business license issues, or even property audits.

🚫 Part 11: Legal Enforcement
Jing: What happens if someone skips the legal process?
Ibu Sari: The government can: (1) Freeze the business (2) Seal the property (3) Impose fines (4) In extreme cases, demolish illegal buildings
Enforcement is stricter now, especially in tourism zones like Canggu and Ubud.