What a foreigner can actually own in Bali

A Bali listing will call the same thing four different names, and will call four different things the same name. Before any of the advice about structures is useful, the words have to resolve.

The same thing under four names, and four things under one name

This is the table to keep open while you read a listing. The left column is what agents and portals write. The middle is what that corresponds to in Indonesian land law. The right is what a foreign buyer can actually end up holding, with the article that decides it.

Fourteen expressions, nine underlying categories, and three of them are not rights at all. That gap is most of the confusion in this market, and almost none of it is deliberate — the English vocabulary of property simply does not map onto the Indonesian one.

Why “freehold” keeps appearing in listings aimed at you

Hak milik is real, and it is the strongest thing in Indonesian land law. Article 20(1) of the Basic Agrarian Law defines it as the hereditary, strongest and fullest right a person can hold over land — hereditary, strongest, fullest. Then article 21(1) closes it in eight words: only Indonesian citizens may hold it.

So who is that listing for?

Three possibilities, and they are genuinely different transactions sold under one word.

It is aimed at an Indonesian buyer. Entirely ordinary. Most Bali property is held and traded by Indonesians, and a listing does not stop being accurate because you are reading it.

It will convert when you buy it. This is the common case and the one that surprises people at the deed rather than at the viewing. Permen ATR/BPN 18/2021 art. 187(3) provides that where a foreigner acquires a landed house held under hak milik or HGB, the right is converted into hak pakai; article 158 approaches it from the other side and confirms that a foreigner may only apply to convert those rights, not to hold them. The seller’s perpetual certificate is the seller’s. Yours will carry a term.

It is a nominee arrangement. Article 26(2) voids it, the land falls to the State, and payments already made cannot be reclaimed.

The question that separates the three

Ask, in these words: on completion, whose name is on the certificate, and which right does it record? All three answers above are different and all three are easy to state. An agency that cannot answer it has told you which one you are looking at.

The four routes that are open, and what each one really is

These are not four flavours of the same thing. One is a contract, two are registered rights, and one is a company that holds a registered right.

Hak Sewa — a lease, and not a land right

A lease sits outside the registered-rights system entirely. Article 44(1) defines it as the right to use land belonging to another for the purposes of a building, in return for rent. That is the whole definition, and article 45 then lists who may hold it and stops.

Two consequences follow, and they pull in opposite directions. Because it is not an acquisition of a land right, it sits outside acquisition duty — Law 1/2022 (HKPD) art. 44(3) lists the rights whose acquisition is taxed and hak sewa is not among them. And because no statute sets a term, the term is whatever two parties agreed, which is why the years remaining on a resale lease are the whole asset and why the same village advertises fifteen years and eighty in the same week.

Hak Pakai — the one registered right in your own name

Article 49 of PP 18/2021 splits hak pakai into a fixed-term right and an indefinite one, then lists who receives the fixed-term version: Indonesian citizens, Indonesian legal entities, represented foreign entities, religious and social bodies, and at sub-paragraph (e), Orang Asing. Foreigners, named.

The term is 30 years initially, extendable by 20 years and renewable by 30 years — 80 years of ladder, at PP 18/2021 art. 52(1). The indefinite version, hak pakai selama dipergunakan, is reserved by article 49(3) for government bodies, village administrations and foreign missions; where you see “hak pakai with no time limit” advertised, that is what is being misdescribed. What holding it involves in practice.

Strata title — the one place the word really is ownership

PP 18/2021 art. 67(1)(c); Permen ATR/BPN 18/2021 art. 188(1) grants hak milik atas satuan rumah susun to a foreigner with the appropriate permit. Article 1(10) defines the unit as one used separately, mainly as a dwelling, with access to a public road. So the unit is owned, in the full sense, by a foreigner.

Two qualifications do more work than they look like they do. Article 188(2) provides that where the building sits on HGB, your share of the common property is calculated on the proportional value ratio and excludes the common land — the land underneath carries its own term while your unit does not. And article 71(2) confines that limb to units in special economic zones, free trade and free port areas, industrial areas and other economic areas, so whether a given development qualifies is a question to put at the start.

PT PMA holding HGB — a company, not a right

PP 18/2021 art. 34 grants HGB to Indonesian citizens and Indonesian legal entities. A foreign individual is neither, which is why this route always involves an Indonesian company. You own shares; the company owns the right. Everything that is good about it and everything that goes wrong with it follows from that sentence. What the company has to be, and what it costs to keep being one.

The rights that are closed to you personally

Worth stating explicitly, because both appear in Bali listings and neither is described as closed.

HGB, held directly

Article 34 is a two-line article and it is conclusive: citizens and Indonesian legal entities. Article 35 then adds the discipline — a holder who stops meeting those conditions has one year, then the right lapses by operation of law to release or transfer it, after which it is extinguished. A foreign individual named on an HGB certificate is not a clever structure; it is a right with a clock on it.

HGU, at all

Hak Guna Usaha runs 35 + 25 + 35 years under PP 18/2021 art. 22(1), and PP 18/2021 art. 19 grants it to Indonesian citizens and Indonesian legal entities. It shows up in Bali listings as plantation or agricultural land, often at prices that look remarkable for the area. It is a cultivation right over agricultural land, it is not a dwelling right, and article 20(1) applies the same one-year release discipline when the holder stops qualifying.

The certificate itself — and why hak pakai over someone’s freehold runs 30 years, not 80 — is set out here.

Three of the words are not rights at all

This is the category that causes the most expensive misunderstandings, because each of these looks like a property type in a listing and none of them is one.

“Sertipikat” is a document

A certificate records whichever right was granted. Asking whether a property “has a sertipikat” is like asking whether a car has paperwork: the answer is almost always yes and it settles nothing. The line that matters is the one naming the right, and that line decides whether you are legally capable of taking it.

“Girik”, “Letter C” and “petok D” are evidence, not title

The regulation is unusually explicit about this, because it has to rank the evidence it will accept. Permen ATR/BPN 18/2021 art. 114(1)(b)(1) sets out what a hak pakai application may rest on: a sertipikat, a transfer deed, a deed or letter evidencing release of rights, an allocation or kavling purchase letter, a forest-area release decision, an auction record, a court judgment, or other evidence of land acquisition. Then it provides for the case where none of those exists at all: physical possession, set out in a statement witnessed by at least two local witnesses who know the land’s history, are not relatives, and known to the village head.

Read the shape of that hierarchy rather than the list. A certificate is the first tier. The old customary documents sit in the second, and bare possession in the third. Land in the lower tiers can often be brought up — that is what the article is for — but it is a process with a cost and an outcome that is not guaranteed, and it is not a thing you buy and sort out afterwards.

“Nominee” is an arrangement the statute voids

The other two are real categories in the wrong slot. This one is different in kind: the sentence at article 26(2) makes any act intended directly or indirectly to move freehold to a foreigner void by operation of law, vests the land in the State, and adds that payments already received by the owner cannot be reclaimed. The loan agreement, the irrevocable power of attorney and the statement of rights are not protection against that sentence — read together they are evidence of exactly what it names. The full text, in the original.

What each route does when your circumstances change

The comparison most people make is on price, and the comparison that decides whether the choice was right is this one. Each route has a condition that has to survive for decades, and the conditions are not the same condition.

Read the first row across before anything else. It is the difference people are least often told about: a lease does not care about your visa, hak pakai does at every renewal, and a company does not care at all. Inheritance and exit works through the rest of that table in detail.

How to ask so that the answer cannot be ambiguous

All four of these are ordinary questions, all four are free, and the answers resolve every row of the first table for one specific property.

1. Which right is recorded on the certificate today?

Not “is it freehold”. The name of the right: hak milik, HGB, hak pakai, strata title. If the answer is one of the first two and you are a foreign buyer, a conversion is coming and somebody has to pay for it.

2. Which right will be recorded on completion, in my name or my company’s?

This is the question that separates the three kinds of “freehold” listing. It also surfaces a nominee proposal immediately, because the honest answer to it is “an Indonesian person’s name”.

3. If it is a lease, what is the commencement date and the term?

As dates, not as an approximation, and with the document that evidences them. Then subtract, and put the remainder through the calculator before you compare the price to anything else you have seen.

4. What is the land designated for, and who else must consent to a sale?

Two separate enquiries and neither is answered by the certificate. Designation comes from the spatial plan; consents come from identity, marital status and the estate position. What each document can and cannot prove.

Nothing on this page pushes you towards a structure. We are paid a fixed fee per enquiry, agreed before you arrive, and it does not move with the price of anything or with whether you buy at all — which is why this page can tell you that the cheapest route is frequently the wrong one.

Does it matter which country you are from?

No — not to Indonesian land law. PP 18/2021 art. 1(14) defines the foreigner every rule on this page is written for as anyone who is not an Indonesian citizen. There is no separate rule for Australians, Americans, Britons or Singaporeans; there is the foreigner rule, and it is the one above.

What does differ is your home country’s tax on the rent and on the sale, which is a separate question with separate sources. For Australian residents: the ATO’s guidance and the Australia–Indonesia tax treaty.

And if what you are looking at is an empty plot rather than a house, the question changes shape — which right fits land depends on what you mean to build.

Where to go from here

Questions about the words themselves