Essential Real Estate Regulations in Bali, Indonesia

Published on May 2, 2026 and written by Cyril Jarnias

Bali, the paradise island of the Indonesian archipelago, attracts numerous foreign investors each year, drawn by its idyllic landscapes and real estate potential. However, before diving into property acquisition on the Island of the Gods, it’s crucial to understand the specifics of the local legal and regulatory framework. In this article, we provide a comprehensive overview of the real estate laws and regulations you need to know in Bali, enabling you to invest with peace of mind.

Property Rights for Foreigners in Bali: Myth or Reality?

Contrary to popular belief, foreigners can indeed acquire real estate in Bali. However, this possibility is governed by strict rules that must be mastered. Indonesian law distinguishes several types of land rights, the main ones being:

• Hak Milik: Full ownership right reserved for Indonesian citizens
• Hak Pakai: Right of use granted to foreigners for a period of 30 years, renewable twice
• Hak Guna Bangunan (HGB): Right to build on land for a period of 30 years, renewable

For foreign investors, Hak Pakai is generally the most suitable solution. This right allows the use and occupancy of a property for a total duration of up to 80 years (30 years + 20 years + 30 years). It offers satisfactory legal security while complying with Indonesian legislation.

It’s important to note that the acquisition of real estate in Bali by a foreigner must be done through an appropriate legal structure, typically a PT PMA (Indonesian limited liability company). This approach secures the investment and complies with local legal requirements.

Main Real Estate Laws and Regulations in Bali: An Evolving Framework

The Balinese real estate market is governed by a set of laws and regulations that evolve regularly. Among the fundamental texts to know are:

• The Basic Agrarian Law of 1960: It defines the different types of land rights in Indonesia
• The Foreign Investment Law of 2007: It governs the conditions for foreign investment in the country
• Presidential Decree No. 103 of 2015: It specifies the terms for real estate acquisition by foreigners

In recent years, the Indonesian government has taken several measures to ease real estate investment conditions for foreigners. Thus, in 2020, new regulations were adopted to allow foreigners to acquire condominium apartments (strata title) in certain designated areas.

It’s also important to note that real estate transactions in Bali must be conducted in the presence of a certified notary (PPAT – Pejabat Pembuat Akta Tanah) who guarantees the legality of the operation and the registration of the property with the competent authorities.

Real Estate Taxation in Bali: A Complex but Advantageous System

Real estate taxation in Bali may seem complex at first glance, but it offers significant advantages for foreign investors. Here are the main taxes to know:

• Land and building tax (PBB – Pajak Bumi dan Bangunan): It generally amounts to 0.5% of the estimated property value
• Property transaction tax (BPHTB): It represents 5% of the purchase price or the estimated property value
• Rental income tax: It ranges from 10% to 20% depending on the owner’s tax status

It’s important to note that tax rates may vary depending on the owner’s tax status (resident or non-resident) and the type of property concerned. For example, luxury villas may be subject to higher tax rates.

An interesting aspect of real estate taxation in Bali is the possibility of benefiting from tax exemptions or reductions in certain cases. For example, properties held by foreign companies (PT PMA) can benefit from tax advantages under certain investment programs.

Rights and Obligations of Property Owners in Bali: Finding a Balance

Being a property owner in Bali involves a number of rights, but also obligations to respect. Among the main rights are:

• The right to use and enjoy the property according to its intended purpose
• The right to rent the property (under certain conditions for foreigners)
• The right to sell or transfer the property (in compliance with rules applicable to foreigners)

In return, property owners in Bali also have obligations to respect. Among these, we can mention:

• The obligation to maintain the property and respect local urban planning rules
• The obligation to pay property-related taxes and fees
• The obligation to respect condominium rules (for condominium properties)

It’s important to note that the rights and obligations of foreign owners may differ from those of Indonesian owners, particularly regarding the rental and resale of properties. Therefore, it’s crucial to research these aspects thoroughly before investing.

Recent Regulatory Changes: Towards Increased Openness of the Balinese Real Estate Market

In recent years, the Indonesian government has taken several measures to ease real estate investment conditions for foreigners in Bali. Among the notable changes are:

• Extension of the right of use (Hak Pakai) duration for foreigners, from 25 to 30 renewable years
• The possibility for foreigners to acquire condominium apartments (strata title) in certain designated areas
• Relaxation of conditions for obtaining residence permits for foreign investors

These developments reflect a willingness to open the Balinese real estate market to international investors. However, it’s important to note that these changes also come with new requirements regarding transparency and compliance.

For example, Indonesian authorities have strengthened controls on the origin of funds used for real estate investments, as part of the fight against money laundering. Foreign investors must therefore be able to justify the source of their funds and comply with current regulations.

Conclusion: Investing in Bali, an Exciting Project Requiring Solid Expertise

Investing in real estate in Bali represents an attractive opportunity for many foreign investors. The island offers an exceptional living environment, a dynamic real estate market, and interesting profitability prospects. However, the complexity of the local legal and regulatory framework requires a cautious and well-informed approach.

To succeed in your real estate investment in Bali, it’s crucial to:

• Understand the different types of land rights accessible to foreigners
• Stay informed of regulatory and tax developments
• Surround yourself with competent professionals (lawyers, notaries, tax advisors) to secure your investment
• Adopt a long-term approach, taking into account the specificities of the local market

By following these recommendations and relying on solid expertise, foreign investors can fully benefit from the opportunities offered by the Balinese real estate market.