Buying property in Bali: the honest list of pros and cons

The short answer

• Pro: a foreign buyer has three working legal routes, leasehold, Hak Pakai and a PT PMA holding HGB title, every deal is executed by a notary and a title is registered at the land office.
• Pro: part of the catalogue is already built with permits on record, and a purchase does not require flying in, a power of attorney covers it.
• Con: a leasehold is a wasting asset, the discount steepens as the remaining term shortens, and an extension is a contract clause, not a legal right.
• Con: there is effectively no mortgage for a foreign buyer, this is a cash market.
• Con: off plan construction carries no mandatory escrow, handover dates slip, and a nominee scheme is void by law.
• Con: the rules keep moving, a farmland conversion ban, a nominee ban, and natural risk is checked against official BMKG and BNPB maps, not a review.

Pro: the law gives three working routes, and it is not a sales line

Freehold, Hak Milik, never belongs to a foreigner: Article 21 of the 1960 Agrarian Law reserves it for Indonesian citizens. But a foreign buyer has three routes that actually work: a notarized leasehold, the market default, Hak Pakai in your own name if you genuinely live in Indonesia, and ownership through a PT PMA, a foreign owned Indonesian company, holding a right to build title, HGB. Each route is covered in detail in our leasehold versus freehold article.

This is not paperwork for its own sake. A leasehold is executed as a notarial deed, while HGB and Hak Pakai are registered at the land office after a deed drawn up by a PPAT, the land deed official. The Civil Code adds two protections rarely explained on a viewing: a lease survives the death of the landowner, Article 1575, and survives a sale of the land, Article 1576, so heirs or a new owner inherit your contract, not a clean slate.

Pro: part of the catalogue is already built, and you can buy without flying in

A&J's catalogue holds 15 objects across 12 locations as of the check date, September 2026: apartments from $101K, PREDMET.CEMAGI in Cemagi, villas from $129K, Wave Courtyard Villas in Uluwatu, the most expensive object from $1.25M, Royale Residence in Uluwatu. One object is freehold, Bingin Elements in Uluwatu, from $661K, the rest are leasehold, with term badges spanning to 2050 at the short end, to 2059 at the long end, and one at 27 plus 30 years. Five of the 15 objects are already completed and move in ready; a permit is printed on a card only where it is actually on record, which is why Premier Umalas Villas carries all four, IMB, PBG, SLF and AMDAL, and other objects carry fewer.

Physical presence is not required. The deal runs on a limited power of attorney, kuasa khusus: it names one specific act and one specific property, is executed before a notary, and is legalised with an apostille rather than consular legalisation, because both Indonesia and Russia belong to the Hague Apostille Convention. Someone still has to appear physically before the Indonesian notary, your attorney in fact, not necessarily you. We walk through the full process in our buying remotely article.

Con: a leasehold is a wasting asset, and that is not rhetoric

A leasehold ends by itself, by operation of law, on the last day of the term, Civil Code Article 1570, and the building passes to the landowner with no compensation if the deed is silent. An extension is possible and common, but it is a contract clause, not a right: the deed either grants a guaranteed option with a fixed price, a priority right with no price fixed, or nothing at all. We cover this line by line in our article on what happens when a leasehold ends.

The market prices this in. Propertia's dataset for April 2026, 16,316 active listings, puts the median leasehold villa with 25 or more years remaining at $300K against $430K for freehold, and 41 percent of leasehold listings omit the remaining term altogether. The shorter the remainder, the steeper the resale discount, and a documented, transferable extension option is what actually holds value.

Con: there is no mortgage, this market runs on cash

An Indonesian mortgage instrument, hak tanggungan, can attach only to registered rights under Law 4 of 1996, Article 4: Hak Milik, HGU, HGB, and a registered, transferable Hak Pakai on state land. A leasehold, a contract rather than a registered title, does not qualify. In practice this means a Bali purchase is almost always paid in cash, and an off plan deal is paid in stages tied to construction, not a calendar.

Con: construction risk is real, there is no mandatory escrow, and dates slip

Indonesia mandates no escrow for these deals, and in practice stage payments go straight into the developer's own account. The one mandatory backstop is a construction guarantee from a guarantee institution, evidenced by a bank or non bank support letter, obtained before marketing even starts, Government Regulation 12 of 2021, Article 22C. A completion label such as Q3 2027 becomes a term of the deal only once it is written into the preliminary sale agreement, the PPJB, as its own clause, Article 22J of the same regulation; the explicit right to cancel and get a full refund covers negligence on the construction schedule and the PPJB signing schedule, Article 22H, not a slipped handover date after the PPJB is already signed.

Checking a developer is real and partly free. The public BHUMI map shows whether a parcel is registered, its boundaries and its right type, though never the owner's name; the AHU registry confirms a company exists, and the district court and Supreme Court databases show its litigation history. In 2025 Badung's Satpol PP acted on 194 buildings without a PBG permit, sealing 35 of them, detik Bali, January 2026; in July 2025, 48 unpermitted structures were demolished in Bingin, standing on regency land in a green zone. We cover the full developer check in a separate article.

Con: a nominee deal is void, zoning is strict, and taxes are real

The freehold on a local friend's name offer is void under Article 26(2) of the Agrarian Law: the land reverts to the State and the money paid is not recoverable. Since February 2026, Bali's regional regulation 4/2026 separately banned nominee land holding; the regulation's own sanctions are administrative, a written warning, suspension, closure, permit revocation, demolition with restoration of the land, fines, while criminal liability runs through national law rather than the text of this regulation itself.

Zoning decides what can be built before price does. KKPR confirms a plot's use matches the spatial plan, the coastal setback defaults to at least 100 meters inland from the highest tide line, Presidential Regulation 51 of 2016, and the regency's own plan fixes the exact line for a specific stretch of coast. We cover titles and zoning in a separate article.

Taxes are real, and different for a leasehold and a title purchase. A leasehold buyer pays roughly 1 to 2 percent on top of the price, notary and legal work, no BPHTB; a freehold, Hak Pakai or HGB buyer pays about 6 to 7 percent, including the 5 percent BPHTB acquisition tax. The seller pays a final income tax, 2.5 percent on a title transfer or 10 percent on lease income. VAT at an effective 11 percent touches only a new build bought from a developer. The annual PBB tax is capped at 0.5 percent, with the exact rate and base set by the regency. Full detail lives in our taxes and costs article, and the monthly running costs of ownership, from electricity to a service charge, in our ownership costs article.

Con: the rules keep moving, and natural risk is checked on official maps, not rumor

The word moratorium is worth untangling, because it causes the most confusion. In September 2024 the province proposed a one to two year moratorium on new hotels, villas and beach clubs to Jakarta, and the outcome was only a task force. In January 2025 governor elect Koster said plainly, no moratorium is needed, there will be strict control, and permits kept being issued. What actually became law came later and was narrower: Governor's Instruction 5 of 2025, from 2 December 2025, barred regents from approving farmland conversion, and Regional Regulation 4 of 2026, from February 2026, wrote that into a standing law and separately banned nominee holding. The six regency agreement not to encourage new hotels from 2026 is a political deal, not a law, and Badung, Denpasar and Gianyar are not part of it.

Natural risk is checked against official sources, not a social media post. The floods of 9 and 10 September 2025 killed 18 people, BNPB summary, and by 24 February 2026 BPBD Bali had logged 76 disaster points across the province, 42 of them floods. Of the island's 633.36 km of coastline, 215.82 km is eroding, BWS Bali Penida. A magnitude 7.7 earthquake struck off Flores on 15 August 2026, BMKG, and Bali did not appear in the damage reports; Agung has sat at Level I, normal, since September 2021, MAGMA Indonesia portal. That is a status on a date, not a guarantee, and it belongs on the portal itself, not in a retelling.

When we advise against buying

• The object is offered on a friend's name or another nominee arrangement. We do not work with nominee schemes: if a deal only works on someone else's name, it does not work for us.
• Construction is already underway off plan and there is no PBG permit. That is not a formality to catch up later, it is a reason not to pay.
• The payment schedule is tied to calendar dates instead of construction milestones, foundation, structure, roof, handover. We ask for a milestone schedule or we walk.
• The leasehold term is shorter than the ownership horizon the buyer states, and the deed carries no documented extension option with a fixed price.
• The object is marketed for rental in a zone where short term letting is not actually licensed or permitted by zoning. We never calculate a yield on this site, and a rental licence is a fact we check, not a promise we repeat.

Our position is simple: we would rather say not this one than close a deal where any of the above does not add up. An honest pros and cons list only means something if the cons come with a willingness to say no, not a softer rewrite of the same risk.