Frequently Asked Questions

Foreigners cannot directly own freehold land (Hak Milik) as individuals in Indonesia, as this is reserved for Indonesian citizens. However, there are legal options for foreign investors:

• Leasehold (Hak Sewa): Lease land for up to 30 years, with extension clauses (e.g., +30 years) negotiable in the contract. This is the most common and secure option for foreigners.
• Hak Pakai: Grants usage rights for residential purposes, typically up to 80 years, renewable under specific conditions.
• PMA Structure (Penanaman Modal Asing): Foreign investors can establish a foreign-owned company (PMA) to hold freehold land titles (Hak Milik). This requires appointing local Indonesian directors, but the foreign investor remains the primary beneficiary of the title. The PMA structure is complex and requires legal and financial setup.

Nominee Structure: A local Indonesian holds the title on your behalf, with legal agreements to protect your interests. This carries significant risks and is less recommended.

Tip: At Bali Gaya, we recommend leasehold for simplicity or PMA for long-term freehold ownership, depending on your goals. Always engage a reputable lawyer to verify titles and structure agreements.

Pitfall: Avoid informal nominee arrangements without robust legal safeguards, as they can lead to disputes or loss of control. The PMA structure, while secure, requires ongoing compliance with Indonesian corporate regulations.

Ubud, Bali’s cultural and wellness hub, attracts tourists, digital nomads, and retirees, driving demand for residential and rental properties. Areas within a 30-minute radius, such as Sayan, Tegalalang, Payangan, and Kedewatan, offer:

• High ROI: Land prices in Ubud appreciate 8–12% annually, with villa rental yields of 8–15%.
• Limited Supply: Central Ubud’s scarce land pushes growth to nearby areas with more affordable plots.
• Lifestyle Appeal: Proximity to rice fields, yoga retreats, and cultural sites makes these areas ideal for boutique villas and eco-resorts.

  Tip: Prioritize plots with road access and scenic views to maximize value. Bali Gaya’s online platform offers curated listings in these high-potential zones.

  Pitfall: Overpaying for central Ubud land—consider emerging areas like Taro for better value. Be aware of the new law prohibiting reallocation of Green Zone (protected) land to Yellow Zone (development) titles, which limits development in certain areas.

The process includes:

• Research: Define your goals (e.g., villa, rental property) and explore locations via Bali Gaya’s online platform with virtual tours and verified listings.
  
  
• Due Diligence: Confirm the land’s title (e.g., Hak Milik for leasehold or PMA), zoning (residential, tourism), and any encumbrances. Check Green Zone restrictions.
  
  
• Legal Support: Hire a trusted notary or lawyer to draft agreements and ensure compliance with Indonesian law, especially for PMA setups.
  
  
• Negotiation and Payment: Finalize terms, sign a leasehold or PMA contract, and process payments securely.
  
  
• Development Planning: Partner with Bali Gaya’s development team to design and build, securing necessary permits.
  
  Tip: Request the Certificate of Land (Sertifikat Tanah) and verify it with the local land office. Bali Gaya handles due diligence to prevent fraudulent listings.
  
  Pitfall: Skipping due diligence risks purchasing disputed land or Green Zone plots unsuitable for development due to the new zoning law.

Costs depend on location, land size, and project scope:

• Land Purchase/Lease: In Ubud, leasehold land starts at IDR 5 million/are (100 m²) per year in the best case, with premium central Ubud plots at IDR 20–50 million/are. Surrounding areas like Payangan are more affordable.
  
  
• Notary/Legal Fees: 1–2% of the transaction value for title checks and contracts. PMA setups incur additional corporate setup costs (IDR 50–100 million).
  
  
• Development Costs: Villa construction ranges from IDR 5–15 million/m², depending on materials (e.g., bamboo vs. luxury finishes).
  
  
• Permits: Building permits (IMB/PBG) and environmental approvals cost IDR 5–20 million, based on project size.
  
  
• Taxes: Leasehold transfers incur 5% BPHTB tax; PMA structures may involve corporate taxes.
  
  Tip: Budget 10–15% extra for unforeseen costs. Bali Gaya provides transparent cost estimates and connects you with reliable contractors.
  
  Pitfall: Underestimating permit or PMA compliance costs can erode ROI, especially for rental properties.

Risks include:

• Legal Disputes: Unclear titles or poorly drafted nominee agreements can lead to conflicts.
  
  
• Zoning Restrictions: A 2025 law prohibits reallocating Green Zone (protected) land to Yellow Zone (development) titles, limiting development options in certain areas.
  
  
• Market Fluctuations: Tourism-dependent areas may see rental dips during global crises, though Ubud’s lifestyle appeal mitigates this.
  
  
• PMA Complexity: Freehold ownership via PMA requires ongoing corporate compliance, which can be costly if mismanaged.
  
  

Construction Delays: Unreliable contractors or permit issues can stall projects.

Tip: Partner with Bali Gaya to verify titles, navigate zoning laws, and manage projects. Stay updated via our “Latest News” blog.

Pitfall: Ignoring the Green Zone law or PMA requirements can halt development or lead to legal issues.

To boost returns:

• Target Rentals: Design modern, photogenic villas (e.g., with infinity pools) to attract tourists and nomads.
  
  
• Go Sustainable: Eco-friendly properties with solar panels fetch 10–20% higher resale values, appealing to Bali’s green market.
  
  
• Leverage Digital Marketing: Use Bali Gaya’s online platform and social media to reach global buyers/renters.
  
  

Choose Emerging Areas: Invest in land within 30 minutes of Ubud (e.g., Tegalalang) for lower costs and high appreciation.

Tip: Ensure your plot is in a Yellow Zone to allow development, as Green Zone land is now protected.

Pitfall: Overbuilding beyond demand or developing in restricted zones can reduce profitability.

Key permits include:

• IMB/PBG (Building Permit): Required for construction, costing IDR 5–15 million based on project size.
  
  
• SLF (Certificate of Building Feasibility): Issued post-construction to confirm safety standards.
  
  
• Environmental Permit (AMDAL/UKL-UPL): Mandatory for larger projects, especially in tourism zones.
  
  

Zoning Compliance: Confirm the land is zoned for your use (e.g., Yellow Zone for residential). Green Zone land cannot be reallocated for development per the 2025 law.

Tip: Bali Gaya coordinates permit applications, ensuring compliance with local regulations. Start early to avoid delays.

Pitfall: Building in Green Zones or without permits risks fines or demolition.

In a leasehold (Hak Sewa), you pay upfront or annually to use the land for up to 30 years. Key points:

• Extension clauses (e.g., +30 years) can be negotiated in the initial contract.
• You can develop, rent, or sell leasehold rights (with landowner consent).

Contracts are notarized for legal protection.

Tip: Secure a 30-year lease with clear extension terms to protect your investment. Bali Gaya ensures legally sound agreements.

Pitfall: Unclear extension terms can lead to disputes or loss of the property at lease end.

Key taxes include:

• BPHTB (Land and Building Acquisition Tax): 5% of the transaction value, paid by the buyer.
• VAT: 11% on certain transactions, like commercial leases.
• Income Tax: Rental income is taxed at 10% for non-residents or progressive rates for tax residents.
• Capital Gains Tax: Leasehold sales incur 20% tax on gains for non-residents; PMA structures involve corporate tax considerations.
  Tip: Consult a tax advisor for optimal structuring, especially for PMA setups. Bali Gaya connects you with professionals.
  Pitfall: Ignoring tax obligations risks penalties, so keep clear records.

Bali Gaya provides end-to-end solutions:

• Online Platform: Browse verified land listings in Ubud and nearby areas with virtual tours and legal details.
  
  
• Due Diligence: We verify titles, zoning (including Green/Yellow Zone status), and permits.
  
  
• Development Services: From eco-friendly designs to construction, we deliver high-ROI projects.
  
  
• Market Insights: Our “Latest News” blog covers trends, regulations, and tips.
  
  

Global Reach: Our social media and online advertising connect you with international clients.

Tip: Book a free consultation with Bali Gaya to explore tailored opportunities.

Pitfall: Unverified agents increase scam risks—trust Bali Gaya’s expertise.

Trends include:

• Sustainability: Eco-friendly properties command premium prices.
  
  
• Wellness Tourism: Ubud’s yoga and retreat market drives demand for boutique villas.
  
  
• Digital Nomads: Villas with high-speed internet and workspaces cater to remote workers.
  
  

Zoning Restrictions: The 2025 Green Zone law protects agricultural land, increasing Yellow Zone land value.

Tip: Align investments with these trends—Bali Gaya designs wellness-focused, sustainable projects.

Pitfall: Developing in Green Zones is no longer viable, so verify zoning early.

For success:

• Location: Choose Yellow Zone plots near Ubud’s attractions for high occupancy.
• Design: Build photogenic villas with modern amenities like pools.
• Management: Use Bali Gaya’s rental services or a reputable manager for bookings and upkeep.

Marketing: List on Airbnb and leverage Bali Gaya’s social media campaigns.

Tip: Target peak seasons (June–August, December–January) with promotions.

Pitfall: Poor maintenance or bad reviews can hurt long-term profitability.

Bali’s culture values community:

• Respect Banjar: Engage the local village council for project approvals.
  
  
• Hire Locally: Employ local workers and artisans for quality and goodwill.
  
  

Cultural Sensitivity: Incorporate Balinese designs and participate in local ceremonies.

Tip: Bali Gaya facilitates community engagement to align projects with local values.

Pitfall: Ignoring the banjar risks delays or opposition.

Protect yourself by:

• Verifying Sellers: Work with Bali Gaya for vetted listings.
  
  
• Checking Titles: Confirm land certificates and zoning (Yellow Zone for development).
  
  
• Avoiding Cash Deals: Use bank transfers for traceability.
  
  

Seeking Legal Advice: Review contracts with a trusted lawyer, especially for PMA setups.

Tip: Bali Gaya’s platform ensures transparency and verified listings.

Pitfall: “Too good to be true” deals often lead to fraud.

Options are limited:

• Personal Funds: Most investors use savings or assets.
  
  
• Developer Financing: Bali Gaya may offer payment plans for land or construction.
  
  

Private Lenders: International or local lenders charge high rates (10–15%).