Bali leasehold explained: what it is and the two ways to buy.
Written by Nacho Jorrín, partner at Agmakina Group, building and managing villas in Uluwatu since 2019 · Reviewed 30 October 2026
<b>Leasehold in Bali is a right to use a plot of land for 25 years, renewable for another 25.</b> Hak sewa is the lease contract with the landowner. Hak pakai is the right of use set out in Indonesian land law. In daily talk both are called leasehold. The other route is freehold (HGB), up to 80 years. Here are both, with their terms, their costs and who each one suits.
A foreigner cannot own land outright in Indonesia, but there are two legal routes: a 25-year leasehold renewable for another 25, or the right to build (HGB) through an Indonesian company, up to 80 years. The building is yours either way.
What it actually is
A long-term right of use, legal, in your name and registered. The building is yours from day one. What runs on a term is the land.
The three guarantees of 25+25
- Renewal is contractually obligatory. It does not depend on the landowner's goodwill. It is signed: if the investor wants to renew, the owner is obliged to renew.
- The market sets the price, not the owner. Three independent valuations by official valuers, averaged, signed before a notary.
- Only the land is revalued, never the villa. The only thing paid again every 25 years is the ground. On real projects in our portfolio, the land for the first 25 years cost between €17,000 and €35,000.
It is inherited and it is resold
It transfers like any other asset. The next buyer takes the concession with the years remaining. This is not use-and-lose: it is a right that gets passed on. And you do not have to wait 25 years to renew: landowners often need liquidity sooner and offer to renew at three or four years, frequently below market price.
The other route: HGB through a PT PMA, usually called freehold
It exists and it is legal, so it is worth understanding. Full land ownership in Indonesia is called Hak Milik and by law is for Indonesian citizens only: there is no way around that. What is offered to foreigners as freehold is actually a right to build, the HGB, obtained through an Indonesian company with foreign capital, a PT PMA. The company is 100% yours, with no local partner.
The HGB runs in blocks of 30+20+30 years: 80 at most by law, under regulation PP 18/2021. That is more term up front than a 25-year leasehold, and in exchange it brings a company you have to set up and maintain.
What each route requires
| Leasehold (right of use) | HGB through a PT PMA | |
|---|---|---|
| What you hold | Right of use over the land, in your name. The building is yours | Right to build, in the name of your Indonesian company |
| Term | 25 years, renewable for another 25 | 30+20+30, 80 years maximum by law |
| Indonesian company | Not needed | Required |
| Cost to set up | None | Around €2,000 |
| Annual cost to maintain | None | Around €2,900 plus the paid-in capital |
| Capital to pay in | None | 2.5 billion rupiah, roughly €123,000, separate from the villa |
| Cost of the land | Included in the villa price | 2 to 3 times more expensive |
| Ongoing paperwork | None | Accountants, LKPM reports, taxes and a salaried director |
| Comes with an investor visa | No | Yes |
Who each route suits
- Leasehold fits if what you want is the villa earning from day one without setting up and maintaining a structure in Indonesia. It is how we operate: the investor has nothing to administer there.
- HGB with a PT PMA fits if you plan to reinvest inside Indonesia, want the investor visa or will hold several properties. The paperwork pays for itself when there is volume behind it.
The fear underneath: does it lose value over time?
What falls over time is what would be left to sell to a third party if you resold early, not the rent the villa generates while you hold it. A villa earns the same 10-14% in year 3 as in year 1. And the engine of this investment is the rent, which you can verify right now by opening the real listings on Airbnb and Booking.
Put another way: the investment pays back between year 7 and year 10. The first leasehold term is 25 years. You get all your money back before half the term has passed.
If you know what a leasehold is and want to buy, the step by step is in can a foreigner buy a house in Bali?, and prices are in buying a house in Bali.
What people ask us most.
What is the difference between hak sewa and hak pakai?
Hak sewa is a lease contract with the landowner, for the term you agree. Hak pakai is a right of use set out in Indonesian land law. People call both "leasehold" in daily talk. What matters is to read the contract and have an Indonesian notary confirm which right you get. We are not lawyers.
What is a leasehold in Bali?
A long-term, legal, registered right of use of the land in your name: 25 years, renewable for another 25. The building is yours; the land is what has a term. To buy with it, see our developments.
Is the villa mine or not?
On a leasehold, the building is yours and the land you hold on a 25-year right of use, renewable for another 25. On the HGB route, the right to build sits with your Indonesian company, for up to 80 years. Either way it is a real, registered right, not a verbal arrangement.
What if the landowner refuses to renew?
It is not his decision. Renewal is contractually obligatory if the investor wants it, and the price is set by three independent valuers, not by him.
Can I leave it to my children?
Yes. The concession is inherited and transfers with the years remaining.
Can I sell before the 25 years are up?
Yes. You sell the whole concession to the next buyer, with the remaining years plus whatever is built on it.
What if I am offered 90-year freehold?
That number is not in Indonesian agrarian law. The maximum on the HGB route is 80 years, in blocks of 30+20+30. Ask for the specific article behind it before going further.
The other guides.
Want it with your own numbers?
We show you the villas available, what each one earns today and what would be left for you, with our real figures in front of you. You talk to the developer, not to a salesperson.