Bali Buyers Guide 2025
Your complete guide to buying villas in Bali
Getting Started with Bali Property Investment
Essential preparation steps before you start your Bali villa search
Understanding Foreign Ownership
Having your own villa in Bali sounds like a dream, right? This beautiful Indonesian island offers stunning beaches, waterfalls, volcanoes to hike, and green rice terraces. Bali isn't just about nature activities though – it also has a wide range of Western restaurants, lively expat communities, and a vibrant nightlife.
Buying a villa in Bali is fast becoming part of that Australian dream to allow owners to live a balanced lifestyle between both countries as their careers become more flexible and are driven by a digital world. But, there are many risks associated with buying property in another country, and many Australians have found this out the hard way.
Can a Foreigner Own Property in Bali?
There is only one way for foreigners to securely own property in Indonesia outright, instead of leasing real estate for a certain period of time: by setting up an Indonesian legal entity - a PT PMA. The ownership title of the property is called Hak Guna Bangunan (HGB).
The Right to Build and Right to Use (Hak Pakai) titles provide you with clear legal grounding. A non-Indonesian citizen cannot own land in Indonesia. However, a foreigner can acquire a leasehold title (Hak Sewa) to land and buildings for a defined period of time.
This title can be held in your own personal name and is 100% legal and protected by Indonesian law.
Leasehold vs Freehold
Having an investment strategy before buying in Bali is integral to the success of your purchase. This is why it is important to understand the differences between both a leasehold and freehold.
To purchase a leasehold property in Bali means that you are leasing the land upon which your property is constructed. This is normally for a period of up to 25-30 years. As an investor, you have the rights to use the property during the agreed lease period; however, you do not have full ownership like a freehold property, which allows both full ownership over the property and its land.
Before proceeding, it is important to highlight that for a foreign investor to own a freehold, they must set up a foreign investment company that is called a 'PT PMA'.
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Ownership Options in Bali
Understanding your buying options and legal requirements
Buying a Leasehold
Investing in another country can be challenging and at times confusing, especially if you are not familiar with the local government laws and regulations. A leasehold purchase is the most popular with foreign investors due to it being more affordable than a freehold ownership.
Private freehold owners are typically the ones who negotiate the sale of their leaseholds, and this is calculated in the way of millions of IDR per Acre of land per the duration of the lease term.
Having a legally binding lease agreement in place is critical, which must outline the terms and conditions, including price, duration, and any renewal options if agreed upon. As part of this process, a local notary is pivotal to ensuring the lease is legally bound and valid.
The signing of agreements in Bali is very different to that of other countries. In Bali, leases are negotiated and signed by the freehold owner of the land without the interruption of the Balinese Government.
Understanding Lease Extensions
Properties are typically leased for a duration of up to 30 years, with the option to extend if agreed upon within the original lease terms and conditions. However, getting the landowner to agree to an extension can at times be challenging because it is not lucrative due to the possibility of their land value increasing over time.
A lease can be extended at any time during the lease period, and this must be agreed upon by the landowner at that time. Typically, most extensions are valued at the market rate at the time of extension.
With land prices expected to increase over time, we always recommend that you extend your lease sooner rather than towards the end of your initial lease term. This will save you money in the long run.
Buying a Freehold (PT PMA)
With the right guidance and support, purchasing a freehold in Bali is possible. However, it is far more complicated and can become frustrating for foreign investors. This is due to the Indonesian Government having regulations and laws in place to protect the priority interest of locals and limit overseas ownership of land.
Creating a local team of professionals around you, such as a real estate agency and legal representatives, will be crucial to ensure you are meeting the set criteria that will enable you to purchase a freehold property in Bali. This will include acquiring the correct licenses, permits, and approvals.
Indonesian law permits that any foreigners wanting to buy property in Bali as a freehold must set up a PT PMA, which is a foreign investment company. This is a legal requirement.
For information about setting up a PT PMA to purchase a freehold property in Bali, please contact our team.
Managing Your Bali Villa Investment
Maximizing returns and managing your property effectively
Managing Your Villa via Airbnb
Most foreign investors plan to place their villas onto short-term rental platforms to manage their bookings. It is important to carefully consider all your options before making a final decision. Some management companies in Bali can charge up to 15-20% on guest payments and therefore it may be more cost effective for you to manage the property yourself via platforms such as Airbnb. This will give you full administrative control over the finances.
Please note that Airbnb charge roughly 7.5% on each guest booking.
Management Options Comparison:
Self-Management via Airbnb
- Cost: 7.5% per booking
- Full administrative control
- Direct access to finances
- Requires your time and involvement
Property Management Company
- Cost: 15-20% on guest payments
- Hands-off approach
- Professional management
- Local presence for issues
Working with Edwards & Smith for Bali Villas
How we help Australians buy villas in Bali safely and confidently
Why Work With Us?
We help everyday Australians purchase villas in Bali for investments, retirement, or even part-time living. Our Bali team guides each of our clients through the entire process of purchasing their dream villa.
Our Bali Services Include:
- Sourcing and inspecting the right villa
- Due diligence and comprehensive property checks
- Ownership options guidance (leasehold vs freehold and PT PMA setup)
- Expert negotiation to secure the best price
- Notary, legal requirements, and contracts
- Responsibilities and processes management
- Finance coordination
- Zoning and risk assessment
How Our Fees Are Structured
At Edwards & Smith, transparency is paramount. Our full buyers agent service fee ranges from 2-5% of the purchase price depending on property value and complexity. We provide a clear quote upfront before you engage our services.
For example, on a $500,000 USD villa, our fee would typically be less than $25,000 USD. Our fee is success-based—you only pay when you successfully purchase a property through our service.
Unlike other services, we don't operate within strict timeframes. Whether the search takes three weeks or three months, our commitment remains unwavering—we will tirelessly pursue the perfect property for each and every client, ensuring their satisfaction and peace of mind throughout the process. See our recent Bali villa purchases and learn about our property evaluation services.
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