The Insider’s Guide to Leasehold Property Deals in Bali 2026

If you are considering purchasing a piece of land in Bali, then it is important to understand leasehold transactions (Hak Sewa) in Indonesia. As we know, the Indonesian government has implemented a law that prohibits foreign nationals from buying freehold land (Hak Milik) however foreigners can buy leasehold titles to a villa or piece of land in Bali. A lot has changed since 2026 and it is important to have up to date information on procedures, documentation and other important tips when purchasing a leasehold property in Bali.

LEASEHOLD definition Leasehold means you buy the right to use and occupy the land or property for a period ( terms ) that can vary between 25 to 30 years, that can be negotiable to extent term, but generally is for a further 20 to 50-80 years and more. Land owners remain an Indonesian citizen or company. The Leasehold contract, (Surat-Surat per Hubungan Tanah / SPTH) will be registered at the BPN ( Badan Pertanahan Nasional – National Land Office) in order to provide you with official rights to your land or premises.

Most contracts begin with a Memorandum of Understanding (MOU). This secures the price, timeframe and scope of work and is accompanied by a 10% deposit which is lodged in a notary’s escrow account (an account held in trust by a notary pending specific conditions being fulfilled). Often buyers feel reluctant to pay a deposit before the terms are agreed and property examined. Once the deposit is confirmed the seller has to provide original and notarized (PPAT) copies of the land certificate, recent tax invoices, permits, building permit (PBG) (although the IMB is being phased out in favour of the PBG). It is wise to get a notary who is well experienced with leasehold property in Bali and preferably one who speaks good English or has reliable translation.

Around 30 days of working time should be considered for this exercise. The Notary will carry out searches in relation to the title of the land. The Lawyer will look into all matters of interest such as liabilities, planning and building permits etc. In fact the purpose of DD is to provide you with an adequate safeguard and to allow you to withdraw at any stage if important obstacles come to light eg in the event of having to deal with difficult heirs to the land or having to confront unexpected zoning regulations. In general, with clean cases, you will just have to deal with preparing the lease agreement to be signed by the land owner and to have it notarized and registered (at this stage, the remaining 90 % of the rental will be automatically released from the Escrow account).

Financially leasehold land is generally less expensive to get into than freehold. Typically transaction costs amount to between 2 – 4 % of the purchase price of the property, consisting of Notary fees (around 0.5 – 1 %), Administration and Land Registration fees as well as zoning approval fees (PKKPR). The acquisition tax (BPHTB) is usually also very low or is even excluded. On the seller side, there is an income tax of 10 % (PPh Final), agent fees and other charges. As an example: a USD 300,000 leasehold property in Canggu would result in approximately USD 6,000–12,000 in fees, excluding the involvement of a lawyer.

leasehold works very well in most parts of the island of Bali, in terms of location. For digital nomads and investors looking for a community / rental yield play, Canggu has lots of option. 1 bedroom and 2 bedroom bungalows start at about USD 250,000 . In Sanur and Nusa Dua , the elderly and families are seeking villas in a calm neighbourhood close to International Schools – which tend to be more expensive (400k plus). If the clients are looking for a longer term residential lease of a villa, they need a more laid back and culturally stimulating place to live. Thus leasehold options for smaller family bungalows / homes and some green or eco-villas are generally available in Bali at competitive prices of up to about USD 300,000. In terms of seaside leasehold resorts, Uluwatu (not a prime coastal road, but some excellent beaches with a few higher end resorts and stunning scenery and cliffs on offer, good option for a leisure and also investment play at USD 350,000 or so).

There are still plenty of risks to be aware of. Some zoning changes have been made and there are also issues arising around inheritance rights, so be wary of vague extension clauses in leases. Leasehold does not automatically grant the right to reside in Indonesia and a KITAS will still need to be obtained. Be wary of over supply in certain areas and make sure you carry out full due diligence on the demand for property before purchasing. Also make sure that any lease is BPN (Bangunan dan Tanah) registered and that your escrow agent is reputable.

Bali leasehold land options make a very safe option for foreigners who wish to live, enjoy and invest in Bali. The legislation surrounding leases is continually improving and with some careful preparation, research and negotiation, owning a piece of the tropical dream in Bali for many years can be a reality.

Practical Takeaways for Buyers & Investors:

1. Budget Breakdown: USD 300,000 buyer in Canggu - 3 to 4% closing costs (notary, land registration, zoning)
2. Always ask for a full set of a “daftar sewa bangunan” (registered lease agreement) at BPN (land and building cadastral office) – the unregistered lease can expose you to many potential risks in the future.
3. Make sure the lease agreement includes provision for extending the lease – specifically mention the length of time the lease will be extended, how the price of the extension will be determined and the length of time the landlord must give you before terminating the lease, because there is no statutory obligation to extend the lease.
4. Lawyers for Due Diligence On purchases of any size that are more than $500,000, it may be a good idea to hire an independent lawyer for due diligence.

Bali’s Leasehold Land Market 2026 All things considered, our assessment is that Bali’s leasehold land market in 2026 will remain largely intact, balancing local culture with international requirements while continuing to offer practical options for foreigners wishing to purchase both primary and secondary dwellings for living and for investment. In most cases with careful research, attention to detail and a bit of patience all things Bali can still deliver surprisingly little cause for concern.