Bali Property: 5 Questions Foreign Buyers Always Ask Explained for 2026

Foreigners buying property in Bali experience confusion on a number of topics regarding leasehold structures, building permits, title deeds, transaction processes and buying remotely. The 5 key questions listed below clarify common issues to avoidable problems that can waste money and time.

As a foreigner it is possible to lease land in Bali in a personal capacity or through a PT PMA (a 100% foreign owned limited liability company). A personal leasehold (Hak Sewa) can be notarized and it is advised to register this at the BPN (Badan Pertanahan Nasional or National Land Agency). Leasing the land through an active PT PMA offers stronger legal protection and greater flexibility especially if planning to rent the property commercially. There are also greater tax advantages when paying rent on a company registered leasehold. The management of a company is straight forward and we would be happy to form a new PMA on behalf of our clients.

This question concerns the building permit PBG (Persetujuan Bangunan Gedung) which was introduced by the Government in 2021. Although the permit was originally designed to be easier to obtain than its predecessor IMB, small building such as garages or a swimming pool require a permit before they can be built. It has become common for buyers to discover, late in the purchase process, that the building does not have the required permit(s). In some cases, they are even told that the structure can be legalized retrospectively, at a price. It is worth repeating that the IDR 1 Billion threshold for tax purposes, has nothing to do with building permit exemptions. Each regency (such as Badung, Gianyar or Tabanan) has its own set of rules and it is recommended to contact the local DPMPTSP office or a permit specialist early on in the process.

These five documents will need to be verified and complete before any offer is made for a property purchase in Bali: A Clean Land Certificate. This will show current ownership and prove that there are no disputes over the land. Zoning Status. This can be verified by obtaining a copy of the KKPR or by accessing the relevant information on the Gistaru portal. Building Permits. Even small items such as a garage or pool will require a PBG (Persetujuan Bangunan Gedung) building permit. Building permits issued prior to 2021 will be referred to as IMB’s and these can be converted to a current PBG permit. SLF (Sertifikat Lokal Fangka) occupancy certificate. This is an essential document for short-term rental licensing. Land Titles/Certificates. In addition to the above documents listed above, it is also wise to check the type of land title or certificate that is held for the property. SHM’s and SHGB’s are considered to be ‘clean’ land titles, while Girik’s and letter C’s are due to expire in February 2026 and cannot be legally transferred. Upgrades to SHM’s or SHGB’s can be processed at BPN (Badan Pertanahan Nasional) and this can take around 4-8 weeks to complete.

Closing Time - How Long Does It Take To Close? After Due-Diligence has been completed (about 4 weeks) for a leasehold property (also referred to as Hak Sewa) that has a clear title, closing should take another 4 to 8 weeks. For a purchase of a PT PMA (Foreign Owned Indonesian Corp) with an existing active company, closing should take approximately the same time as a leasehold property (about 4 to 8 weeks). However, forming a new company can add an additional 2 to 4 weeks to the closing time. If there are any existing legacy certificates that require an upgrade at the BPN, this can also add an additional 4 to 8 weeks to the close. Finally, if the property is an off-plan property (i.e. under construction), then it is likely to take at least 12 to 18 months for the construction to be completed.

Bali property can be purchased from abroad and many people do purchase properties in Bali without physically traveling there – especially when purchasing off plan a new property or a completed villa, and then the Virtual walkthrough or Viewing of the property by video allows the buyer to see the interior of the property as well as exterior to confirm all details, and as long as a Notarized Power of Attorney (Surat Kuasa) has been granted then the property can be purchased in full without the buyer ever setting foot in Bali. However, with bare land it is highly recommended that a physical visit is made in order to actually see the land from ground level to check on issues such as access to the land by road, is the boundary clearly marked, is there any neighboring development taking place and are there any local floods – etc.

But, beware of some of the common pitfalls. Firstly, an unnotarised agreement is worthless to enforce. Secondly, a property with no valid PBG and SLF will not be able to operate as a rental and will also have huge problems in resale. Thirdly, many old title deeds, even recently purchased properties, will have to be upgraded at BPN in due course (as of the date of writing all such deeds will become non-transferable by February 2026). There are always going to be some delays in due diligence, some unresponsive sellers, some hiccups in PT PMA formation but with the right agent on your side these can all be ironed out to allow for a smooth transaction.

Practical Takeaways for Buyers & Investors:

1. Buying a villa for personal use or retirement (as main residence), then best is to lease personally (as individual) and get leasehold contract noted (signed and sealed) at a notary public. Then register leasehold contract at BPN under your individual name to complete your formal purchase.
2. Investors planning to rent out a Bali property, should lease the land in the name of an active PT PMA and an expert should advice on the tax implications as well as on the leasehold agreement.
3. Apply always for a PBG (Persetujuan Bangunan Gedung) building permit prior to starting to build. Although there are some exemptions with respect to tax implications, such as the long established threshold of IDR 1 billion, no building whatsoever may be constructed without prior approval by the relevant DPMPTSP of the relevant regency. Permits for small buildings such as garages, pools, fences etc. may be issued quickly by local permit offices, or permit specialists, but retrospective legalisation is extremely expensive.
4. Allow an additional 4–8 weeks for any land title that requires the owner to go through the process of upgrading any of the legacy certificates held at BPN. This is another common bottleneck in 2026 as set by the government regulations.

Final Thought:

In conclusion, the property market in Bali today is subject to change. The vast and labyrinthine processes of laws and regulations in place are developing constantly changing and developing, in order to further keep the playing field even for all the foreign investors involved. With a little knowledge and preparation regarding these steps, these can even become a competitive advantage for foreign property investors in Bali, rather than risk bringing harm to your investment. By investing the time and money in gaining a good understanding of the laws of Bali in regards to foreign property ownership, the foreign property investor in Bali can avoid pitfalls and help protect their property investment in Bali.