The dream of owning property in Bali is alive for many, but the legal landscape can often feel like a maze.
Hey, I’m Jason, a Business Journalist at Bukit Vista. Let me walk you through one of the most insightful conversations we’ve had on the Bali Business Review.
Our guest, Ibu Ni Lu Sukasari is a respected legal professional who has helped hundreds of property owners both foreign and local. With a family background steeped in architecture and law, she brings a rare mix of professional knowledge and cultural awareness. In this article, we explore what every foreign investor needs to know about owning property in Bali.
Buying Land in Bali Requires Legal Structure and Due Diligence
Foreigners are not allowed to directly own land in Indonesia. To legally acquire property, you need to either set up a foreign-owned company known as a PT PMA, or obtain a KITAS which is a temporary stay permit allowing foreigners to live and work in Indonesia.
Once this legal foundation is in place, the next crucial step is due diligence. This involves checking zoning regulations, confirming the legality of land ownership, and verifying documents through the land office and local community.
Ibu Sari shared stories where sellers had provided misleading information about land being outside protected “green zones.” In other cases, multiple heirs claimed ownership of land that was never formally registered. A thorough background check is essential to avoid legal entanglements.
Cultural due diligence is equally important. For instance, some plots of land are used for religious ceremonies. Understanding these local customs early on will help buyers avoid future friction and build positive relationships with surrounding communities.
Property Ownership Types Define Your Rights and Risk
There are several types of land ownership and usage rights in Indonesia. Here’s a simplified breakdown of the most common ones:
- Hak Milik (Freehold): This is full ownership but is available only to Indonesian citizens.
- Hak Pakai (Right to Use): Foreigners with KITAS or KITAP (a permanent stay permit) can acquire this. It can last up to 80 years and is often used for residential purposes.
- HGB (Hak Guna Bangunan or Right to Build): Foreigners can access this through a PT PMA. It’s best suited for commercial ventures such as hotels or villas and has no limit on the number of properties owned.
- Hak Sewa (Leasehold): This is a lease agreement between an individual and the landowner. It’s not registered with the government and offers limited legal protection.
Ibu Sari warns against using nominee agreements, where a foreigner buys property under an Indonesian name. These are technically illegal and risky. Although sometimes used as a workaround, they should be avoided unless there are no other options and legal protections are firmly in place.
Licenses Like PBG, SLF, and Pondok Wisata Require Local Cooperation
To build or operate a property legally in Bali, you’ll need specific permits. These include:
- PBG (Building Approval): This is required before any construction can begin and ensures that your building plan complies with zoning laws.
- SLF (Certificate of Worthiness): Issued after construction, this certificate confirms the building is safe for use.
- PKKPR (Land Use Approval): This pre-qualification certificate covers zoning classification and building height limits.
If you’re planning to rent out your property to tourists, you may also need a Pondok Wisata license. This license is for small accommodation businesses and can only be issued in the name of an Indonesian citizen. If you are leasing land, it’s essential to arrange with the landlord in advance that they apply for this license.
When asked about pricing, Ibu Sari noted that fees depend on factors like location, zoning, and any unpaid taxes. To avoid overpaying, she advises clients to check the official government fee list and compare it to what consultants or brokers are quoting.
Community Engagement Is Just as Important as Legal Documents
Understanding legal requirements is only half the picture. Building respectful relationships with the local community can be just as critical to your success.
In Bali, many community matters are governed by the banjar, or village council. If a foreign property owner fails to integrate or communicate with the local community, they may face road access issues, lease renewal problems, or cultural pushback.
Ibu Sari highlights the importance of Musyawarah Mufakat, an Indonesian principle rooted in the spirit of consensus and harmony. Unlike in Western systems, lawsuits aren’t a practical solution to many local conflicts. Instead, open dialogue, cultural respect, and proactive communication are key.
She even joked about handling cases involving noisy roosters, something that rarely shows up in legal contracts but often matters in local disputes.
Buying property in Bali as a foreigner isn’t impossible—but it is nuanced. Between choosing the correct legal structure, obtaining the right licenses, and engaging with the community, the process requires both legal precision and cultural awareness.
What Ibu Sari teaches us is that success in Bali’s real estate market isn’t just about owning land, it’s about building trust. With the right guidance, foreign investors can not only secure their assets but also contribute meaningfully to the island’s unique ecosystem.
🗒️ Read the transcript
🎙️ Introduction
Pak Jing: Okay, so today we have a very special guest on the Bali Business Review, and I’ll let her introduce herself. But the record of our guest is incredible. She’s helped so many property owners all throughout Bali achieve legal clarity and success through her management of understanding the law.
Pak Jing: Ibu Sari, welcome to the Bali Business Review today.
Ibu Sari: Thank you, Pak Jing. It’s a pleasure to be here.
Pak Jing: Pleasure to have you. So Ibu Sari, could you quickly introduce to our audience a little bit about your professional history, clients you’ve helped before, and how you’re making an impact in the Bali real estate industry?
Ibu Sari: Thank you, Pak Jing. My name is Ni Luh Sari. I’m from Canggu. I have a law firm called Malekat Hukum — Angel of Justice — based in Canggu, with branches in Jakarta and Jogja. Law and property are like my blood and bones. My late father was an architect, and my mother is a law professor. So I’ve seen the transformation of Bali from rice fields to today’s development. I’m excited to talk about law and property tonight.
🏝️ Background & Experience
Pak Jing: It sounds like you have local experience and a heritage deeply rooted in Balinese culture. Do you have an estimate of how many property owners you’ve helped understand the law better?
Ibu Sari: Maybe in the hundreds, directly or indirectly.
Pak Jing: How many years of experience have you had practicing law here in Bali?
Ibu Sari: I’ve practiced for about three years directly, but with my partners and our founder, Prof. Retno — a law professor specializing in company law — we have combined decades of experience.
🧱 Part 1: Ownership and Legal Entities
🧾 Step-by-Step Process for Foreigners to Buy or Build Property
Ibu Sari: The first and most important step is due diligence. Foreigners cannot buy land directly. You need either a PT PMA (foreign-owned limited liability company), or a KITAS (Indonesian temporary residency/work permit).
Pak Jing: Can you explain what a PT PMA is?
Ibu Sari: It’s a limited liability company that can be wholly or partially owned by foreigners. You need at least two shareholders. This is the legal vehicle through which foreigners can hold land under HGB (Hak Guna Bangunan).
Steps to Buy Land Legally
Form a PT PMA or obtain a KITAS
Identify a plot of land
Conduct legal and local due diligence (zoning, ownership, regulations)
Ensure seller’s information and land certificates are verified
Confirm zoning is not green zone and ownership is clear
Finalize transaction legally through a notary
⚠️ Common Due Diligence Issues
Ibu Sari: Some sellers lie about zoning. We once found out land was in a green zone after verifying with the authorities. Also, land is sometimes owned collectively by families with no clear heir or legal title, which makes transactions risky. Some land still doesn’t have formal certificates due to historical transitions post-independence.
Pak Jing: Is there a term for this kind of traditional or pre-legal land ownership?
Ibu Sari: Yes, it’s still common in Java and parts of Bali. Some of it is known as customary land, or tanah adat.
🧭 Cultural Due Diligence
Ibu Sari: Buyers also need to understand the cultural context. For example, some land is spiritually significant or next to temples. There may be ceremonies or processions that pass through your land. It’s important to communicate and engage with the banjar (local village).
Pak Jing: So relationship building is as important as the legal side?
Ibu Sari: Absolutely. Balinese people are kind and open if approached respectfully and openly. But poor relationships can cause major problems later, such as trouble extending leases.
📜 Land Titles Explained
Pak Jing: Can you explain the different types of land titles: Hak Milik, Hak Pakai, HGB, and Hak Sewa?
Ibu Sari:
Hak Milik
Full ownership or freehold
Only Indonesians can own this
Can be sold or inherited
Hak Pakai
Right-to-use title
Available to foreigners with KITAS or KITAP
Can be held up to 80 years
Minimum value in Bali is 5 billion IDR
One property per person
HGB (Hak Guna Bangunan)
Right-to-build title
Used by PT PMA
Can own multiple properties
Good for business or investment
Hak Sewa
Leasehold
Typically 25–30 years
Can be renewed
Private contract, not registered in land office
Pak Jing: So Hak Sewa is the least secure?
Ibu Sari: It’s not illegal, but it depends on how well you negotiate and maintain relationships. If the landlord doesn’t want to renew after 25 years, you’re at risk. Best to secure terms early.
🚫 The Nominee System
Pak Jing: What about the nominee system? Is it still used?
Ibu Sari: Technically, nominee agreements are illegal. But in practice, in places like Gili where no HGBs are allowed right now, people sometimes use nominees with structured agreements. It’s risky, though, and only used as a last resort.
💍 Foreigners Married to Indonesians
Pak Jing: Can a foreigner buy property through their Indonesian spouse?
Ibu Sari: Yes, but you must have a prenuptial agreement (pre-nup) for asset separation. If you didn’t, you’ll need a post-nup later. Otherwise, the land can be seized or lost in case of divorce or legal dispute.
Sometimes, the property is in the Indonesian spouse’s name, but the foreigner has a lease agreement from them. It keeps both parties bound and protected.
🏨 Part 2: Licensing and Permits
🏘️ Pondok Wisata License
Pak Jing: Can you explain how the Pondok Wisata license works?
Ibu Sari: Pondok Wisata is a tourism accommodation license for small businesses. It can only be held by Indonesians. If you lease land from a local, the landlord must apply for it.
Pak Jing: So as a foreigner, I can’t apply for it directly?
Ibu Sari: Correct, but you can structure the agreement so the landlord applies for it on your behalf. This should be discussed upfront in the lease.
Pak Jing: Is there a standard cost or sharing structure for the Pondok Wisata?
Ibu Sari: No standard. It depends on the agreement between you and the landlord. Just make sure everything is clear in writing.
🏗️ PBG and SLF (Building Permits)
Pak Jing: What happened to the old IMB? And what is the PBG and SLF?
Ibu Sari:
PBG (Persetujuan Bangunan Gedung)
This replaced the old IMB (building permit)
Must be obtained before building
Includes zoning, height limits, and building purpose
SLF (Sertifikat Laik Fungsi)
This is a certificate of building usability
Issued after construction
Confirms the building is structurally safe and compliant
Pak Jing: Why was IMB replaced?
Ibu Sari: The government wanted a better process. IMB only covered one stage. PBG and SLF together ensure that buildings are approved before and inspected after construction.
Pak Jing: How much do these cost?
Ibu Sari: Costs vary based on land size, zoning, and architectural design. Always ask for the official government fee so you don’t overpay consultants.
🧾 PKKPR: What Is It?
Pak Jing: What is a PKKPR?
Ibu Sari: PKKPR is the zoning and land use certificate needed before applying for a PBG. It confirms the land use classification and what type of buildings are allowed there.
💰 Part 3: Taxes and Reporting (Coming Soon)
Pak Jing: In our next segment, we’ll get into taxes and reporting obligations for property owners and investors in Bali. But this has already been incredibly insightful.
🙏 Closing
Pak Jing: Ibu Sari, thank you so much for joining us and shedding light on the legal side of Bali property ownership. This information is priceless for investors, expats, and locals alike.
Ibu Sari: Thank you, Pak Jing. It was my pleasure. I hope it helps people understand how to invest wisely and respectfully in Bali.
Take the First Step to Joining Our Community, Book Your Seat at Our Round Table Talk Today!
At Bukit Vista, we believe in creating lasting partnerships that help nagivate your property to the top 1% in this competitive season. Join us to discover how we can work together.