Checklist & FAQ

A practical, investor-focused checklist before buying property in Bali—covering Freehold/HGB/Hak Pakai and Leasehold— plus a short FAQ. Use this together with: Zoning, Permits, and Taxes & Fees.

Pre-Offer (Initial Due Diligence)

Verify title & land data
Check title type (SHM/HGB/HP), land area, official parcel map, and name of the owner matching ID / corporate documents.

Confirm ITR/RDTR zoning
Ensure the zoning allows your intended use (villa, commercial, residential, etc.).

Access & utilities
Check legal road access (status / ROW), water, electricity, and fiber. Clearly reflect these in the agreement.

Existing building status
PBG/SLF status or obligation to obtain them; avoid structures that violate setbacks or zoning (ITR/RDTR).

Ownership & Leasehold

Before PPJB / AJB (Freehold / HGB / Hak Pakai)

PPJB (optional)
For staged payments: define schedule, penalties, escrow, and clear cancellation terms.

Sale Deed (AJB) at PPAT
Ensure taxes are prepared (PPh, BPHTB), original title is available, and proof of full payment is ready.

Transfer of HGB / Hak Pakai
Where applicable, follow the correct notarial deed format and secure all required consents.

Title transfer at BPN
Monitor the process with the Land Office (BPN) until the new certificate is issued in your name.

Use escrow and milestone-based payments to significantly reduce dispute risk.

Leasehold (Hak Sewa): Key Clauses

Term & Extension
Clearly state the lease term (e.g. 25 years) plus any extension options (e.g. +25) with pricing and conditions defined in the contract.

Payment structure & escrow
Define instalments, escrow account, release conditions, and late-payment penalties.

Right to build / renovate
Allowed only in line with zoning (ITR) & PBG regulations; clarify who bears the cost and who holds the SLF.

Sub-lease & assignment
Specify if sub-leasing or assignment is allowed, and under which conditions owner approval is required.

Access & services
Road, parking, utilities, waste management, and ongoing service charges should be clearly written into the lease.

Force majeure & dispute resolution
Set out governing law, jurisdiction, and whether disputes go to mediation, local courts, or arbitration.

PBG / SLF & Other Permits

PBG (Building Approval)
Replaces IMB; required for new builds or change of use. Work with qualified architects/structural engineers.

SLF (Certificate of Proper Function)
Issued after construction is complete and the building passes inspection.

Environmental approvals
UKL-UPL / AMDAL as required by project scale; plus permits for wells, wastewater, etc., where applicable.

Permits in Detail

Taxes & Fees

Seller’s Final Tax (PPh)
Typically around 2.5% (subject to regulatory changes—always check the latest rules).

Buyer’s Acquisition Tax (BPHTB)
Generally 5% of the taxable base after regional tax-free threshold (NPOPTKP).

Notary / PPAT fees
For PPJB/AJB deeds, title searches, registration, and name transfer at BPN.

Taxes & Transaction Table

FAQ

Can foreigners own Freehold (SHM) land? ▾

No, not directly. Common legal options are: setting up a PT PMA (HGB), using a valid Hak Pakai structure, or long-term leasehold. See Ownership & Leasehold.

What is the difference between SHM, HGB, and Hak Pakai? ▾

SHM (Hak Milik) is the strongest freehold right for Indonesian citizens; HGB (Hak Guna Bangunan) is for legal entities (including PT PMA); Hak Pakai (HP) can be granted to eligible Indonesians and foreigners. Each has different terms, renewal options, and conditions.

Is a nominee structure safe? ▾

It is considered high risk and not recommended—there is a real risk of dispute and potential invalidation. Stick to legal structures: PT PMA with HGB, Hak Pakai, or properly drafted leasehold.

How long is a typical leasehold and how is extension handled? ▾

Typical terms are 25–30 years with clearly written extension options (e.g. +25 / +30). Make sure the price, mechanism, and conditions for renewal are explicitly stated in the deed.

Is my land zoned for a villa? ▾

You must check ITR/RDTR zoning. Short-stay villas and tourism accommodation are generally allowed only in certain tourism or residential zones. Start with the Bali Zoning page and then confirm with local authorities.

What are PPJB, AJB, and lease deeds? ▾

PPJB is a conditional sale and purchase agreement (optional, often used for staged payments); AJB is the final sale deed transferring title; Leasehold transactions use a Lease Agreement Deed. All of these are executed by a PPAT/Notary.

Do I need an escrow account? ▾

Strongly recommended for complex or staged transactions. Funds are released based on milestones (title verification, tax payment, deed signing), providing protection to both parties.

Which taxes apply at closing? ▾

Typically: Final income tax (PPh) for the seller, BPHTB for the buyer, plus notary/PPAT fees and land office (BPN) administrative costs. See details on Taxes & Transaction Fees.

What does proper due diligence include? ▾

Verifying certificate authenticity, encumbrances (mortgage, seizure), parcel boundaries, ITR/RDTR zoning, legal access, utilities, and the status of existing buildings (PBG/SLF). Work with licensed PPAT/Notaries and surveyors.

Can I sub-lease or assign my leasehold? ▾

Only if it is explicitly allowed in writing in the lease deed and consistent with zoning and permits. Many contracts prohibit sub-leasing without the owner’s prior consent.

Which permits are required for renovation or new construction? ▾

You will need PBG (Building Approval) and, after completion, SLF (Certificate of Proper Function), all in line with zoning and environmental regulations. See Permits & Building Regulations for more detail.

How long does title transfer at BPN usually take? ▾

Timing depends on completeness of documents and local office workload. In practice it may take from several weeks to a few months. Complete tax receipts and deed documents help avoid delays.