One of the first questions any property buyer in Bali must ask is: freehold or leasehold?

The answer isn't always obvious. Both structures offer distinct advantages and limitations, and the right choice depends on your investment goals, nationality, and long-term vision. This guide breaks down what you need to know before committing.

What Is Freehold?

Freehold ownership (Hak Milik) grants full, indefinite ownership of land and property. It is the most secure and absolute form of property ownership in Indonesia,but it is only available to Indonesian citizens.

Key Features:

• Permanent ownership
• Can be inherited or sold
• Can be used as collateral
• Not available to foreigners directly

Foreigners often attempt to access freehold by using nominee arrangements, where an Indonesian citizen holds the title on their behalf. However, this method is technically illegal and exposes both parties to significant risk.

What Is Leasehold?

Leasehold (Hak Sewa) grants usage rights over a fixed term, typically 25–30 years, with the option to extend. Foreigners can legally hold leasehold titles under their own name.

Key Features:

• Legally available to foreigners
• Fixed term, renewable (often 2 x 25 years)
• Can be sold or transferred during the lease period
• Lower upfront cost compared to freehold

Leasehold titles are widely used for villa rentals, holiday homes, and medium-term investments.

Price Differences & Resale Value

Freehold land typically commands a premium of 20–50% more than comparable leasehold land, depending on the area. However, resale dynamics vary:

• Freehold: Higher resale value and long-term appeal to local buyers
• Leasehold: Time-sensitive,value diminishes as lease duration shortens unless extended

Lease extensions should always be negotiated upfront to maintain future value.

Foreign Buyer Considerations

• Are you Indonesian? If yes, freehold is available.
• Are you holding via a PT PMA? You can legally hold Hak Guna Bangunan (Right to Build) or Hak Pakai (Right to Use), offering similar rights to leasehold or conditional freehold.
• Are you a lifestyle buyer or investor? Leasehold is generally more practical for foreign individuals.

Final Reflection

There’s no universal “best” option,only what’s best for you. Freehold offers permanence but legal complexity for foreigners. Leasehold provides access, legality, and often a better return profile for short- to mid-term investors.

At IndoVillas, we guide you through both structures with full legal clarity and market context. Explore our listings or speak with our legal team to navigate your Bali property journey with confidence.

Start with us at IndoVillas.