Freehold vs Leasehold in Bali

Freehold vs Leasehold in Bali: What You Need to Know

If you’re considering buying property in Bali, one of the first questions you’ll face is whether to go for freehold vs leasehold in Bali. The two options come with very different rules, especially for foreign buyers. Understanding the difference is essential for making a safe and smart investment.

Here’s a clear breakdown of freehold vs leasehold in Bali, so you can decide which is right for you.

What is Freehold (Hak Milik)?

Freehold, or “Hak Milik,” is the most complete form of land ownership available in Indonesia. It gives the owner full rights to the land and property, indefinitely.

Key points:

• Only Indonesian citizens can legally own freehold property.
• Foreigners cannot hold Hak Milik titles in their own name.
• A foreigner can access freehold through a legal entity (like a PT PMA) or an Indonesian nominee, but both carry risks and legal complexities.
• Most freehold properties come with higher price tags due to their unrestricted ownership status.

What is Leasehold (Hak Sewa)?

Leasehold, or “Hak Sewa,” is the most common and secure method for foreigners to acquire property rights in Bali. It allows you to lease land or a villa for a defined period, typically 25–30 years, with options to extend.

Key points:

• Fully legal and available for foreigners.
• Lower upfront cost compared to freehold.
• Lease terms can be extended and renewed.
• Often includes the right to sublease (great for rentals).
• At the end of the lease, the property returns to the original owner unless extended.

Leasehold Isn’t “Second Best” — It’s Often Smarter

While some may see leasehold as limited, the truth is, it offers flexibility and reduced risk for many investors. If you’re buying for lifestyle, short-term use, or rental income, a leasehold villa can make more financial sense.

Plus, many leasehold agreements are drafted to allow extensions, giving you long-term control without needing full ownership.

Which One is Right for You?

That depends on your goals.

Choose Freehold if:

• You are an Indonesian citizen or have a local partner/legal entity you trust.
• You want to build and hold land indefinitely.
• You’re planning long-term development or inheritance planning.

Choose Leasehold if:

• You are a foreigner looking for a secure and legal structure.
• You want to own a villa for 25–30 years with the option to extend.
• You prefer lower upfront costs and flexibility.

Legal Tips Before You Sign Anything

• Always use a certified notary (PPAT) and legal advisor.
• Confirm zoning (residential, tourism, greenbelt).
• Review IMB/PBG, certificates, and tax compliance.
• Make sure the lease agreement includes extension terms and inheritance clauses if needed.

Related Blog:
Prepare Your Villa for Sale: https://www.ownbalirealestate.com/blog/prepare-villa-for-sale-bali

Still unsure whether freehold or leasehold is right for you?
Speak with our expert team today: https://www.ownbalirealestate.com/contact
Or book a viewing to explore available properties: https://www.ownbalirealestate.com/viewing