Buying Property in Bali as a Foreigner: What It Actually Costs to Finance

One of the most common questions we receive from non-Indonesian nationals is: can foreigners buy property in Bali? The answer is yes - foreigners can legally buy property in Bali and other areas of Indonesia, but not as freehold. Instead, foreign buyers use one of three legal structures: leasehold, Hak Guna Bangunan (HGB) through a PT PMA company, or Hak Pakai (Right to Use).

Each structure comes with different upfront costs, ongoing costs, and financing options. This guide walks you through all three, what each actually costs, and whether you can get a mortgage as a foreigner in Bali.

The Three Ways Foreigners Buy Property in Bali

1. Leasehold

Leasehold is the most common way for foreigners to buy property in Indonesia, and the majority of real estate transactions in Bali involving foreigners use this structure. It is a safe route: the lease is handled by an authorized notary and registered with the land office.

Leasehold periods typically run for an initial 25 to 30 years. Contracts can be extended beyond 30 years, and it's common to negotiate an extension clause at the time of purchase. This secures your right to extend, with the price set at the market rate at the time of the extension.

2. Hak Guna Bangunan (Right to Build) via a PT PMA

This is the second most-used route for foreigners buying property in Bali. A PT PMA is an Indonesian limited liability company with foreign ownership, and this option is best suited to larger-scale investors or those planning to operate the property as a business.

When a PT PMA buys a freehold property, the freehold certificate is converted to an HGB title. HGB typically runs for 30 years, can be extended by an additional 20 years, and can be renewed for a further 30 years. Extensions and renewals are subject to approval from Indonesia's National Land Agency (BPN). If the PT PMA sells the property to an Indonesian individual or company before the HGB expires, the title can be converted back to freehold - so the property effectively retains its value as a freehold asset.

Setting up a PT PMA comes with its own requirements, including a minimum paid-up capital of IDR 2.5 billion, which must be injected into the company at incorporation. These funds can be used to purchase the property.

For the avoidance of doubt: foreigners cannot directly own a freehold title (Hak Milik or SHM), even through a PT PMA. What a PT PMA can own is an HGB title, which can be converted back to freehold if the property is sold to an Indonesian national or company before the HGB period expires.

3. Hak Pakai (Right to Use)

Hak Pakai is suitable for foreigners already legally residing in Indonesia with a limited stay permit (KITAS) or permanent stay permit (KITAP). If the property you have in mind is eligible, this is a straightforward way to hold the property for up to 80 years.

In Bali, the minimum property values for foreign ownership under Hak Pakai are:

• IDR 5 billion for a landed house, with a maximum land size of 2,000 m²
• IDR 3 billion for an apartment

These are the three ways a foreigner can legally own property in Indonesia. Historically, some buyers used a nominee structure, where an Indonesian citizen holds the title on the foreigner's behalf. We strongly advise against this: nominee arrangements have no legal standing and, as of 2026, are now criminalized in Indonesia.

What Each Ownership Structure Costs

When budgeting for your property, it's important to look beyond the purchase price. Each ownership structure comes with different transaction costs and ongoing costs.

Leasehold

Leasehold is the most straightforward and cost-efficient option. There is typically a 1% notary fee to close the transaction, split 50/50 between buyer and seller.

Hak Pakai

Hak Pakai incurs a 5% BPHTB (land and building acquisition tax, paid by the buyer) upon purchase, plus the typical 1% notary fee split 50/50 between buyer and seller. This brings the buyer's total transaction cost to 5.5%.

HGB via a PT PMA

HGB via a PT PMA incurs the same 5.5% transaction cost as Hak Pakai, plus the cost of setting up and maintaining the company. Industry estimates typically put entity setup at around USD 2,500 (roughly IDR 40 million) one-off, with at least USD 1,000 (roughly IDR 16 million) per year for tax and regulatory compliance, depending on the scale of your operation.

In our own experience, setup can come in lower. In a recent transaction where a client set up a PT PMA to acquire an HGB property, entity setup cost IDR 35 million (approximately USD 2,150–2,250). On top of this, the PT PMA requires IDR 2.5 billion in paid-up capital at incorporation, which can be used toward the property purchase, construction, or operational needs.

Now that you understand the ownership structures available to foreigners, the next question is how to pay for the property - and whether a mortgage is an option.

Who qualifies

In today's Bali real estate market, most foreign buyers pay in a lump sum, or through installments paid directly to the developer during construction. However, some Indonesian banks do offer mortgage products for foreign buyers.

In general, local bank mortgages are available to foreigners who:

• Are married to an Indonesian national; or
• Have operated a business in Indonesia through a PT PMA for several years; or
• Have been employed by an Indonesian company (PT or PT PMA) for several years while holding a KITAS or KITAP

If you fall into any of these categories, you may qualify for a mortgage. IDEAL can help you check whether you qualify and find the best mortgage option for your needs.

When determining how much you can borrow, Indonesian banks assess income earned within Indonesia, whether from business or employment. This makes an important difference: buying an investment property through a PT PMA lets you build a track record of Indonesian income, which can help you qualify for a mortgage in the future.

Loan-to-value and interest rates

Indonesian mortgages let you borrow up to 80% of the property's value, known as the loan-to-value (LTV) ratio. LTV is calculated on the property's appraised value, not its sale price. The remaining amount is paid by the buyer as a down payment directly to the seller.

The LTV you receive depends on your employment or business tenure in Indonesia. The minimum is 2 years of employment, or 4 years of operating a business through a PT PMA.

Interest rates change monthly, and IDEAL can help you estimate your monthly installment based on the effective interest rate. Currently, rates for foreigners start from 9% during the fixed period, which typically lasts up to 3 years, and can rise to as much as 12% on the floating rate.

These are the standard rates, but there are two situations where foreign applicants can access lower interest costs:

1. You're married to an Indonesian citizen. Banks are willing to treat the loan as an Indonesian citizen's mortgage when it is taken in the Indonesian spouse's name. Under this route, interest rates can start from 4%.
2. You're willing to keep funds in an Indonesian bank account. If you move capital from abroad into an Indonesian bank and keep it there for a minimum period and amount, the deposit can offset up to 100% of the loan interest.

Which route fits depends on your situation. An IDEAL consultant can help you work out the best option.

Mortgages for a PT PMA

Many foreign applicants we work with want a loan as soon as their PT PMA is set up, to expand or build their business in Indonesia. Because foreign income isn't considered solid financial backing, a PT PMA must prove that its income is sustainable. Banks typically require at least 2 years of operations with sustainable income generated within Indonesia, and in some cases a minimum of 4 years of consistent operations.

This is why a PT PMA is the most suitable route if you plan to invest in and grow a business in Indonesia. It also comes with an HGB title, which is currently the only title eligible for a mortgage.

When a PT PMA applies for a loan, banks evaluate the company's track record, including but not limited to:

• Financial performance
• Type of business: some banks restrict their products to certain Indonesian Standard Industrial Classification (KBLI) codes
• Director structure: banks usually favor a PT PMA with an Indonesian director over one with only foreign directors
• Source of income

You can consult an IDEAL consultant to see whether your PT PMA fits these criteria.

The loan process

The loan process starts once you've chosen the property you want to buy. Loan pre-approval is not common in Indonesia, but IDEAL can help you assess your pre-qualification and prepare the required documents before the mortgage process begins.

On average, processing takes up to 8 weeks. This covers the appraisal (property valuation by the bank's independent appraiser), document verification, a work or business survey, and the bank's analysis, through to the loan offer letter.

Mortgage costs

With a cash purchase, you only need to budget for the property price and related taxes. With a mortgage, you also need to prepare cash upfront for mortgage costs, separate from the down payment. These typically total around 2–5% of the loan amount:

Leasehold vs Freehold in Bali: What's the Real Difference?

Choosing the right ownership structure is an important decision, and it depends on your personal situation, the property you're targeting, and how you plan to use it. Since foreigners can't hold freehold directly, the real comparison is between leasehold and an HGB title converted from freehold.

Leasehold: pros and cons

Pros

• Significantly lower transaction costs
• Generally lower purchase price
• Suitable for foreigners, with a clear legal right to use, occupy, build on, and profit from the property during the lease period

Cons

• The right to use, occupy, build on, and profit from the property is temporary, limited to the lease period
• Extensions can be pre-negotiated but are not guaranteed
• Depreciating asset: as the remaining lease term shortens, the property's residual value declines

Hak Guna Bangunan (converted from freehold): pros and cons

Pros

• Outright ownership of the property for the title period
• An HGB title can be used as collateral with banks, so the property can be bought with bank financing or used to secure another loan

Cons

• Freehold ownership is only available to Indonesian citizens, so foreigners must set up a PT PMA to acquire the HGB title
• Higher investment required: based on our assessment of several hundred land listings, freehold land is typically priced at least twice as high as the same land on a 30-year lease

Cost Comparison: Leasehold vs Hak Pakai vs PT PMA

Which Option Is Right for You?

It's difficult to say that one structure is definitively better than another. Leasehold requires less capital and is more straightforward to acquire legally. HGB requires a larger investment and is more complex for foreigners to acquire, but it offers more certainty and access to bank financing. For most foreigners, leasehold is the right starting point: it gives you access to a home or investment property now, without setting up a legal entity or holding Indonesian citizenship.

If you're ready to start looking, you can browse villas and property for sale in Bali to see what's currently on the market.