Foreign property ownership in Bali, read out of the Indonesian statute

Almost everything written in English about buying property in Bali is a paraphrase of a paraphrase, and a good deal of it still quotes a regulation that was repealed in February 2021. This site does the boring thing instead: it reads the Indonesian original, quotes it, and puts the article number next to every rule so you can check us.

There are exactly three ways a foreigner can hold a home here. Freehold is not one of them, and the fourth thing you will be offered is not a structure at all.

What can I actually own? Compare the three routes

The one sentence that decides everything else

Indonesian land law is not hostile to foreigners, but it is categorical about one thing. Article 21(1) of the Basic Agrarian Law — Law 5 of 1960, still the governing statute — reads, in full: Hanya warga-negara Indonesia dapat mempunyai hak milik. Only Indonesian citizens may hold freehold. It is eight words long and it has not been amended in sixty-six years.

Everything that makes buying in Bali confusing follows from that sentence. Because freehold is closed, a market grew up around the things that are open, and because those things are less familiar than freehold, they get explained badly — often by the person selling you one. A listing that says “freehold” in English is either a property an Indonesian is buying, or a nominee arrangement being described in a way that sounds better than it is.

So the first question about any Bali property is not what it costs. It is which right is actually on the certificate, and whether you are legally capable of holding it.

Three routes, and what actually separates them

People tend to compare the three routes on price, which is the least informative axis available. What separates them is how long they last, whose name the right sits in, what happens when you die, and what has to be true about your immigration status for years after you pay.

Each cell above is sourced on the comparison page, which quotes the article rather than summarizing it.

We are paid a fixed fee per enquiry, agreed before you ever arrive here, and it does not move with the price of anything or with whether you buy at all. That is the whole reason this site can tell you that the cheapest of these three routes is often the worst one.

The variable nobody prices: years remaining

Bali’s leasehold market is a resale market. Very few of the leases changing hands are new ones; most are the remainder of somebody else’s. And because there is no statutory term for hak sewa, the remainder is whatever it is — 31 years on one listing, 18 on the next, and the two are advertised in the same currency, at the same kind of price, with the same photographs.

Every Bali cost calculator we could find takes a price and an ownership structure and returns the taxes and fees. That is a useful thing to know and it is not the question. The question is what one year of use costs, and that number is set by the remaining term far more than by the transfer taxes.

The curve is arithmetic, not a market opinion. At a constant price, a 25-year lease costs twice as much per year of use as a 50-year one, and a 10-year lease costs five times as much. It is the most consequential number in the transaction and it is the one that appears on none of the calculators.

So we built the one that was missing. Put a price, a structure and a remaining term into it and it will tell you what you are paying per year of use and how much of your capital is still there at the end of your holding period.

What goes wrong, in the order it goes wrong

The failures in this market are not exotic. They are boringly repetitive, and almost all of them happen in the same two places: money leaves before anyone has read the certificate, and a binding document is signed in a language the buyer does not read.

Note where due diligence sits. In the sequence as it is actually practiced, the holding deposit comes first and the certificate check comes after — which is precisely backwards, and is the single change that would prevent most of what we see described in the risks page.

Start where your question actually is

How we decide what goes on this site

Three rules, and they are the reason some of these pages are shorter than our competitors’.

The Indonesian text is the source, not an English summary. Every regulation cited here was downloaded from the national legal database as the official PDF and read in Indonesian. Where we quote, we print the Indonesian and the English together, so you can see what has been translated and what has been interpreted.

If we could not read the instrument, we do not print the number. The clearest example is the minimum purchase price for a foreign buyer. Article 187(2) of Permen ATR/BPN 18/2021 delegates it to a Ministerial Decision. That decision is not in the database we read the rest of these rules from, so we have no figure for it — and we say that rather than repeating the number every other site prints.

We do not price the market. We are not valuers and we do not have transaction data. Where market practice is relevant we label it as practice, not law, and we do not give it a precise number it does not deserve. The methodology page sets out the whole approach and what it cannot do.

Questions we are asked most