Building a villa in Bali: the right, the zone, the PBG and the SLF

Four legal questions, in the order they arrive. Most guides start with the permit; the land right and the zone decide whether there is anything to permit.

IMB, PBG, SLF, SBKBG, retribusi: twelve questions in the order they arrive

Building a villa in Bali is four separate legal questions stacked on top of each other: whether your right lets you build, whether the zone lets you build that much, whether the building has consent, and whether it has been certified fit to use. Most guides answer the fourth and skip the first. The table takes them in order.

1. The right: you can own a building on land you do not own

Indonesian law separates the land from the building on it, and that separation is what makes building on a lease possible. PP 16/2021’s general elucidation calls a clear land right an absolute requirement for building, and then allows that a building may stand on another's land by agreement, so building and land ownership can differ (PP 16/2021, general elucidation).

Each foreign route reaches a building differently. A lease is the use of another's land for the purposes of a building (UUPA (Law 5/1960) art. 44(1)) — the building is the point of the right. HGB, which a PT PMA can hold, is the right to erect and own buildings on land that is not one's own (UUPA (Law 5/1960) art. 35(1)). Hak pakai for a home carries a house. The building’s own ownership is evidenced separately, by an SBKBG — evidence of building ownership (PP 16/2021 art. 1(19)).

On a lease, that separation is also the risk: what happens to the building when the lease ends is a clause, not a rule. What the lease has to say about it.

2. The zone: how much of the plot a building may cover

Before any permit, the spatial plan decides what the land may carry. In Badung — Canggu, Seminyak, Pererenan, Uluwatu — the plan caps building coverage at 10% on food-crop land (Badung Perda 4/2025 art. 92(2)(e)), 50% in the tourism zone (Badung Perda 4/2025 art. 96(d)) and 75% in urban settlement (Badung Perda 4/2025 art. 97(2)). On protected farmland, accommodation is not among the permitted or conditional uses; within the coastal setback, which runs at least 100 meters from the highest tide line, only limited support facilities are conditional. Every zone, its cap and its article.

A design drawn before the zone is known is a design that may need to shrink by a factor of seven.

3–4. The consent and the certificate

3. The consent: PBG, which replaced the IMB

The PBG is a building consent, not a land right (PP 16/2021 art. 1(17)) — the permission to build new, alter, expand, reduce or maintain a building to the technical standards. It replaced the IMB; an IMB issued before PP 16/2021 remains still valid until it expires (PP 16/2021 art. 346(2)), so an older villa holding one is not deficient for that reason alone.

4. The certificate: SLF, before anyone uses it

The SLF is a fitness-for-function certificate (PP 16/2021 art. 1(18)), issued by the regional government to state the building is fit for its function before it may be used. The order matters most for buildings that already exist: one standing without a PBG must obtain an SLF first (PP 16/2021 art. 346(3)). Fitness first, consent second.

What the permit levy is built from

The PBG is charged for as a regional levy (retribusi), so each regency sets its own. The one levy by-law we have read in full is Denpasar’s. It builds the levy from total floor area, a locality index, an integrated index and a built-building index (Denpasar Perda 5/2023 art. 63(3)(a)), multiplied by a unit price — the SHST, the highest standard unit price for a simple state building — that the Mayor sets with the Public Works ministry’s application. That price is not in the by-law, so no one can compute a villa’s levy from the by-law alone, and we do not pretend to.

Site works outside the building have fixed unit prices in the same annex. A swimming pool is IDR 10,000 per m² (Denpasar Perda 5/2023, PBG levy annex); on a 40 m² pool that is IDR 400,000, by our arithmetic. The same table prices a fence per meter. These are small sums. The point of knowing them is that a quote for “permits” can be broken down into lines a regional by-law actually sets.

Badung’s levy is set by its own tax by-law, Perda 7/2023, which we have not been able to obtain; we found only its 2025 amendment, which reworks the levy chapter. So for Canggu, Seminyak and Uluwatu there is no levy structure here yet.

After it is built: the taxes change too

A building adds to the NJOP the annual land and building tax is assessed on, and the tax follows the state of the property on 1 January (Denpasar Perda 5/2023 art. 9(3)). A villa finished in March is taxed as land until the next 1 January. How the annual tax is built. If it is let to guests, a villa is a hotel for the regional tax on accommodation. The 10% villa rental tax.

Before you break ground: five checks

1. Does your right allow this building, for this long?

A lease with twelve years left is a poor base for a two-year build.

2. What is the zone, and its coverage cap in square meters?

Multiply the cap by the plot. That is the largest footprint.

3. Is the PBG applied for in whose name?

The building owner and the landowner can differ. The consent and the SBKBG should name the person or company that will own the building.

4. Who obtains the SLF, and when?

Before use — and before any rental income depends on it.

5. What does the lease say happens to the building?

Reverts, is paid for, or is removed. A clause, not a rule.

We are not builders, architects or permit agents, and we recommend none. We are paid a fixed fee per enquiry whether you build or not; this page gives you the rules so you can read a quote.

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