Bali Property Investment: What Foreigners Should Check in 2026

If a foreign investor wants to invest in real estate in Bali, it is not enough to look only at the property price, a beautiful presentation, and the promised return.

The first step is to understand how the transaction will be structured, what land title applies, whether the property can be used for rental activity, whether the land is suitable under zoning rules, and how the real return will be calculated after taxes, management fees, and maintenance costs.

A foreign national cannot purchase land in Indonesia under direct ownership as Hak Milik. This type of land ownership is available only to Indonesian citizens.

For foreign investors, three practical structures are usually considered:

leasehold;
Hak Pakai;
HGB through a PT PMA.

Each structure is suitable for different goals. Choosing the wrong structure may leave the investor in a situation where the property has been acquired and the funds have been invested, but the asset cannot be used effectively as an investment asset.

The Key Points in Simple Terms

A foreign national cannot buy land in Bali under direct freehold ownership.
The main options available to foreign investors are:

Leasehold

Leasehold means long-term rental.
It is usually the simplest entry point, but the lease term, renewal conditions, and renewal price must be fixed in advance.

Hak Pakai

Hak Pakai means a right of use.
This option may be suitable for those who want to combine investment with personal residence and who hold valid immigration status in Indonesia.
In practice, this usually means a KITAS or KITAP.

KITAS is a temporary stay permit.
KITAP is a permanent stay permit.

However, housing regulations for foreigners use a broader formulation: the foreign national must have immigration documents, including a stay permit.

HGB через PT PMA

HGB stands for Hak Guna Bangunan, or the right to construct and own a building on land for a specified period.
This structure is more complex, but it may be suitable for investors planning a systematic model rather than a single property purchase. This may include:

acquisition;
management;
rental activity;
development;
scaling.

HGB may be granted to legal entities established under Indonesian law and domiciled in Indonesia.

The main risk in 2026 is not only the price and not only the contract.
The main risk is buying a property in a location where it cannot legally be used for short-term rental activity.
If the land is not zoned for tourist rental activity, the return shown in the sales presentation becomes irrelevant.

02

Why Foreigners Cannot Buy Land Directly

In Bali, land cannot legally be registered under full direct ownership in the name of a foreign individual.
This refers specifically to Hak Milik, the right of ownership over land. This format is available only to Indonesian citizens.

If a foreign national attempts to structure the purchase through a local nominee owner, this does not make the transaction safe.

A nominee structure may look simple: the land is registered in the name of an Indonesian citizen, while the foreign investor receives separate side agreements.

In practice, this is a weak structure.
If the local partner decides to take advantage of the situation, sell the property, change the terms, or enter into a dispute, the foreign investor may not have real control.

The correct question is therefore not:
“How can I buy land in my own name?”
The correct question is:
“Which legal structure fits my goal?”

The appropriate answer may be:

long-term leasehold;
Hak Pakai, where the foreign national holds the required immigration status;
a PT PMA structure.

KITAS and KITAP are relevant specifically in the context of Hak Pakai.
For a foreign national who wants to register residential property in their own name, a passport alone is not enough. The person must have immigration documents in Indonesia.

KITAS is a temporary stay permit.
KITAP is a permanent stay permit.

However, the mere existence of a KITAS or KITAP does not remove the other requirements. The following must still be checked:

property type;
minimum property value;
land title;
restrictions on use;
purpose of acquisition.

03

Available Ownership and Investment Structures
for Foreign Investors

Foreign investors usually consider three main structures.

Leasehold

For long-term use of the property and a simpler entry structure

The term, renewal, and exit conditions must be fixed in advance

Hak Pakai

For personal residence or a mixed “live and own” model

The foreign national needs suitable immigration status, and the property must satisfy minimum value requirements

HGB через PT PMA

For a systematic investment model, several properties, or a business structure

The company, KBLI, capital, licenses, and management must be structured correctly

The choice of structure should not be based only on what looks more profitable on paper.

It depends on the investor’s actual goal:

personal residence;
passive rental income;
short-term rental activity;
scaling;
property management;
full business operation.

Important: freehold ownership is not available to foreigners. Not in any form and without exceptions.

04

Leasehold: When It Works and Where the Risks Are

Leasehold is long-term rental.
In Bali, leasehold terms are often structured for 25–30 years, with the possibility of extension.

This is usually the most accessible entry option for a foreign investor. It often does not require a corporate structure, the initial budget may be lower, and the transaction is simpler than purchasing through a PT PMA.

Leasehold may be suitable if the goal is to obtain a property for personal residence or for a rental model that does not require a complex corporate structure.
However, leasehold carries an important risk.

After 25–30 years, the terms will need to be reviewed. If the renewal price is not fixed in advance, the landowner may impose new conditions.

Before signing the agreement, the investor should check:

lease term;
renewal right;
renewal price;
payment procedure;
ability to transfer the lease rights;
what happens if the property is sold;
who bears repair and maintenance costs;
whether the property may be used for rental activity;
whether the land is suitable under zoning rules.

The key point is simple: leasehold may be a suitable structure, but only if the agreement and zoning are reviewed before the transaction.

05

Hak Pakai: When It Works and What Must Be Considered

Hak Pakai may be used by a foreign national for residential property where the foreign national holds the required immigration documents.

The applicable regulations state that foreigners who may own a house or residential unit must have immigration documents under Indonesian law.

In practice, this may mean KITAS or KITAP, provided that the other requirements related to the property and land title are also satisfied.

For Bali, the current minimum property value thresholds for foreign ownership are generally stated as follows:

IDR 5 billion

Completed house

IDR 2 billion

Apartment / rumah susun unit

Hak Pakai may be interesting for a person who is not only investing but also wants a residential property for personal use in Indonesia.

However, this structure should not be selected simply because it sounds easier.

It is necessary to check:

whether the property is suitable for Hak Pakai;
whether the foreign national has the required immigration status;
whether the property meets the minimum value threshold;
the land title;
whether the property can be transferred, sold, or inherited;
whether the location matches the intended use.

If the goal is commercial rental, tourist accommodation, or scaling, Hak Pakai may not be the best option.
In that case, another structure should be considered.

06

HGB Through a PT PMA:
When a Company Is Needed

HGB stands for Hak Guna Bangunan, the right to construct and own a building on land for a specified period.
HGB may be granted to Indonesian citizens and legal entities established under Indonesian law and domiciled in Indonesia.

For a foreign investor, this usually means a structure through a PT PMA, a foreign-owned Indonesian company.

HGB through a PT PMA may be suitable for investors who want to build a more stable investment or business model rather than simply purchase one property.

This structure may be needed if you:

are buying a second or third property;
plan to manage real estate as a business;
want to conduct rental activity through a company;
plan to hire staff;
want to establish a property management company;
want to scale the model;
want to hold the asset within a corporate structure.

HGB is subject to statutory periods.
Under PP 18/2021, in certain cases, the right may be granted for up to 30 years, extended for up to 20 years, and renewed for up to 30 years.

However, a PT PMA is not merely a “shell” for buying property.

The company must have:

the correct KBLI;
a proper NIB through OSS;
a suitable address;
an investment structure;
tax reporting;
LKPM reports;
a clear role for the foreign national;
a suitable KITAS / ITAS, if the foreign national manages or works in the company.

If the company is established incorrectly, problems may appear later during:

bank compliance review;
OSS procedures;
licensing;
tax administration;
corporate amendments;
inspections.

Minimum capital participation and the investment plan cannot be treated as one universal number for every transaction.

The calculation depends on:

the PT PMA structure;
shareholder percentages;
KBLI;
number of locations;
capital requirements;
investment plan;
the actual activity conducted by the company through the property.

For this reason, before purchasing through a PT PMA, it is necessary to review not only the property but also the entire corporate model.

07

Why Zoning Matters More
Than Price

For real estate investment in Bali, zoning is often more important than the property price.

RDTR stands for Rencana Detail Tata Ruang, the detailed spatial zoning plan.
It shows which activities are permitted in a specific location.

OSS includes the RDTR Interactive section, through which business owners can review permitted land-use information where such data is available.

A buyer may purchase a beautiful villa, renovate it, list it on Airbnb or Booking.com, receive the first reservations, and only then discover that the land is not zoned for tourist rental activity.

In Bali, residential property cannot be used legally for short-term commercial rental in every location.
It is important to review not only the general area, but the specific land plot and its zoning designation.
The market often uses the phrase Pink Zone for tourism or commercial zones where tourist accommodation may be permitted.

However, investors should not rely on the color shown in a seller’s presentation.
The review must be based on official spatial planning data and the specific location.
If the plot is located in a residential, agricultural, or other zone where tourist accommodation is not permitted, the property cannot legally operate as a short-term rental investment asset.

A management company cannot solve this issue.

It also cannot be properly fixed after purchase if the land itself is unsuitable for the selected model.
Therefore, a seller’s statement that “the neighbors rent out their villas too” proves nothing.
The neighbors may be operating with the same risk.

08

Taxes and Costs That Change the Real Return

The return shown in a sales presentation almost always looks better than the real return after taxes, management, and maintenance costs.
If a brochure shows an annual return of 10–14%, this does not mean the investor will receive that amount as net income.
The investor must calculate the net return.

Tax on Rental Income
For rental of land and/or buildings, DJP indicates final income tax under Article 4(2) at 10% of gross rent.
If the income is received by a non-resident, PPh Article 26 may apply.
The official DJP website states a rate of 20% where a reduced rate under a tax treaty does not apply.

Important: KITAS by itself does not always mean that the person is already an Indonesian tax resident.

For a foreign national, tax residency may depend on, among other factors:
- staying in Indonesia for more than 183 days within a 12-month period;
- intention to reside in Indonesia.
For this reason, the tax analysis must be done based on the specific investor, ownership structure, and income recipient.
It should not be estimated roughly.
Annual Land and Building Tax

PBB-P2 stands for Pajak Bumi dan Bangunan Perdesaan dan Perkotaan, land and building tax for rural and urban areas.

It is a local tax administered by regional authorities.
PBB-P2 is calculated under local tax rules.

Under UU HKPD, the PBB-P2 rate is set by regional regulations, with a maximum rate of 0.5%.

The tax base is linked to NJOP, the taxable value of the property.

UU HKPD stands for Undang-Undang Hubungan Keuangan antara Pemerintah Pusat dan Pemerintahan Daerah, the law on financial relations between the central government and regional governments.

This is an ongoing cost.
It should be included in the financial model even if the property is purchased for “passive income.”
Acquisition Duty on Land and Building Rights

BPHTB stands for Bea Perolehan Hak atas Tanah dan Bangunan, the duty on acquisition of rights over land and/or buildings.

Under UU HKPD, the BPHTB rate is set by regional regulations, with a maximum rate of 5%.

This is a one-time cost, but it affects the total entry cost of the transaction.
VAT Incentive in 2026
In 2026, PPN DTP is available.

PPN DTP stands for Pajak Pertambahan Nilai Ditanggung Pemerintah, meaning VAT borne by the government.

The incentive applies to certain transactions involving completed houses and apartment units.

Under PMK 90/2025, VAT on eligible properties may be borne by the government during the 2026 fiscal year.

PMK stands for Peraturan Menteri Keuangan, a regulation of the Minister of Finance.
Under PMK 90/2025, the government covers 100% of the VAT on the portion of the price up to IDR 2 billion for a house or apartment unit with a total price not exceeding IDR 5 billion.

The incentive applies from January to December 2026, subject to the relevant conditions.

For foreign investors, the incentive may apply if they meet the rules on foreign residential ownership and the conditions of the specific transaction.
However, this is not an automatic discount for every purchase.

The following must be reviewed:
- property type;
- property price;
- handover date;
- PPAT / notarial documentation;
- seller documents;
- applicability to foreign nationals;
- NPWP availability;
- restrictions applicable to the specific transaction.
Maintenance Costs
Bali has a humid climate, fast property wear, and high operating pressure on buildings.

The financial model should include:
- air conditioning;
- plumbing;
- swimming pool maintenance;
- roof maintenance;
- exterior finishing;
- furniture;
- cleaning;
- garden care;
- pest control;
- management company fees;
- insurance;
- vacancy between bookings;
- repairs after guests.
If the investor does not allocate at least 15–20% of income for operation and maintenance, the return calculation will likely be too optimistic.

09

Where Returns May Be
Stronger in 2026

Return depends not only on location.
It also depends on:

entry price;
zoning;
property format;
management quality;
occupancy;
taxes;
operating costs.

However, several main areas are commonly considered in the Bali market.

Canggu / Pererenan

Active market, high demand, high competition. Suitable for apartments and townhouses, but zoning must be checked especially carefully

Ubud

Wellness audience, nature, longer stays, fewer seasonal gaps

Nusa Dua

Premium resort segment, higher entry price, more stable guest flow

Uluwatu / Pandawa

Family villas, surf audience, growing market, but infrastructure in some areas is still catching up with demand

Jimbaran / Bukit

Interesting for villas and family holidays, but access roads, zoning, water supply, documents, and management must be checked carefully

The reference figure from the source material is an annual return of 10–14% and a payback period of 5–7 years.

However, this should be treated as a marketing or preliminary reference point, not a guarantee.

The real return is calculated after:

taxes;
management fees;
maintenance costs;
seasonal vacancy;
repairs;
insurance;
platform commissions;
accounting costs;
legal support;
possible licensing and permit costs.

A property in the wrong zone or with an incorrectly structured ownership model may not generate a return at all.

10

What to Check Before Signing

Most real estate problems in Bali do not arise because the property itself is bad.
They arise because the property was not reviewed properly before the transaction.
Before signing an agreement, at minimum, the following areas should be checked.

Ownership Structure

First, determine which structure fits the investor’s goal.

If the goal is personal residence, one structure may be more suitable.
If the goal is passive rental income, another may be better.
If the goal involves several properties, a management company, or scaling, a PT PMA may be required.

A structure should not be selected simply because an agent says “this is faster.”
Land Zoning
The review should focus on the specific land plot, not just the general district.

It is important to determine:
- whether construction is permitted;
- whether the property may be used for short-term rental activity;
- whether zoning restrictions apply;
- whether the plot falls within an agricultural, green, or otherwise sensitive zone;
- whether the property complies with RDTR / RTRW;
- whether there are spatial planning risks.
RTRW stands for Rencana Tata Ruang Wilayah, the general spatial planning framework for an area.
It sets the general logic for land use at the regional or city level.
RDTR is the more detailed plan that helps determine the permitted use of a specific location.

Under Indonesian law, RTRW is defined as the result of spatial planning for a territory.
If the zoning is unsuitable, even an attractive price will not make the transaction safe.
Land Title and Document History
The following must be checked:
- who the real owner is;
- land title;
- whether there are disputes;
- whether there are inheritance conflicts;
- whether there are encumbrances;
- whether the property is pledged or mortgaged;
- whether document data matches;
- whether the rights can be transferred legally;
- whether there are old arrangements with third parties.
Review through a PPAT is a mandatory stage, not an optional extra.
PPAT stands for Pejabat Pembuat Akta Tanah, the land deed official authorized to prepare official deeds for transactions involving land rights and real estate.
Net Return
The investor should request a financial model, not only a sales presentation.

The model should include:
- entry cost;
- taxes;
- BPHTB;
- PBB-P2;
- management expenses;
- maintenance expenses;
- average occupancy;
- seasonality;
- platform commissions;
- insurance;
- repair reserve;
- vacancy scenario;
- net return.
If the seller shows only an attractive ROI figure without expenses, the model is weak.
Property Management Structure
It is necessary to understand in advance who will manage the property.

Check:
- who accepts bookings;
- who receives payments;
- who pays taxes;
- who is responsible to guests;
- who maintains reporting;
- how the relationship with the management company is documented;
- what happens if a dispute arises;
- how the investor receives income;
- whether the structure matches the documents.
If the property will be rented through Airbnb, Booking.com, or directly to tourists, the legal basis for short-term rental activity must be reviewed separately.

11

Common Investor Mistakes

Assuming that a foreign national can buy land directly

Hak Milik is available only to Indonesian citizens

Using a nominee owner

This structure does not provide proper protection in a dispute

Looking only at the property price

A cheap property in the wrong zone may become a non-performing asset

Failing to check zoning before the transaction

Tourist rental activity may be prohibited for the specific land plot

Trusting the return shown in the presentation

Taxes, vacancy, repairs, and management costs are often omitted

Failing to fix leasehold renewal terms

After 25–30 years, renewal pricing may become a major issue

Choosing Hak Pakai without checking status and minimum value requirements

The property may not meet the requirements for foreign ownership

Opening a PT PMA without a business model

The company may not match the actual use of the property

Failing to check land history

There may be inheritance disputes, encumbrances, or old claims

Failing to calculate taxes in advance

Net return may differ significantly from the advertised return

Failing to review the management company

The operational model may not match the legal structure

12

How Sunrise Business Helps Review a Real Estate Investment

Sunrise Business does not begin with the question:
“Which property should you buy?”

First, it is necessary to determine whether the property fits the investor’s goal and whether the selected model can be implemented safely.

We review:

which structure is most suitable: leasehold, Hak Pakai, or PT PMA;
whether the property matches the investor’s objective;
whether the property may be used for rental activity;
whether the land complies with zoning rules;
risks related to RDTR / RTRW;
land title;
which documents must be checked through PPAT;
how to calculate net return;
which taxes and costs will arise after the transaction;
whether a PT PMA is required;
which KBLI may be needed;
how property management should be structured;
whether there are risks related to Airbnb, Booking.com, and short-term rental activity.

If you plan to invest in real estate in Bali, it is better to review the property before the transaction.

This is cheaper and safer than correcting the structure later, arguing with the seller, or trying to rent out a property that is not suitable for tourist accommodation.

13

FAQ

Planning to Invest in Real Estate in Bali?

Contact Sunrise Business.

We first review:

the property;
zoning;
ownership structure;
land title;
taxes;
net return;
management structure;
possible rental risks.

If the property is suitable, the transaction can move forward.
If there is a weak point in the structure, it is better to discover it before the transaction rather than after payment.

This helps you avoid spending money on a property that looks attractive in a presentation but does not work as a safe investment.

The information in this article is provided for general informational purposes only.
Requirements related to real estate, zoning, taxation, PT PMA, Hak Pakai, HGB, leasehold, tourist rental activity, and property transactions in Indonesia may change.
Before purchasing a property, current requirements should be reviewed based on: