Villa Design Trends in Bali for 2025

Ricefield View Villa for Sale Leasehold in Berawa, Canggu - 34 Years

As for investment, you can earn long-term capital gains by buying leasehold villas in high demand locations such as Canggu, Seminyak, Sanur, and Uluwatu. Those are the most popular holiday destinations in Bali where the demand for rentals are always rising, and they should be your primary consideration if you want quick profit or a vacation home. Also, buying a villa in those locations is a huge advantage because the property value will increase sharply in a short time.

Also read: Top 5 Places in Bali for Villa Investment

Is it safe to buy leasehold property?

Leasing is the most secure method in buying property as a foreigner in Bali. Lease agreements are notarized and serve as legal proof that you have the right to occupy a property for a specified duration, after which you may extend depending on your agreement with the landowner. Indonesia’s property laws may be strict, but you can safely invest in Bali real estate as long as you don’t do illegal acts such as using nominees to buy freehold properties and respect the property regulations such as zoning, building height, etc.

Boho Style Villa for Sale in Pererenan - 34 Years

Lease lengths can vary but villas and land for sale in Bali are typically offered between 20 to 30 years not including extension, Lease extension requires mutual agreement between the landowner and the leaseholder regarding the possibility, terms, as well as price which should be specified in the initial lease contract. Having extension clauses in the contract ensures your right to extend in the future, hence it is an important topic to discuss before committing to any leasehold transaction.

Also read: 6 Things You Must Know Before Buying Property in Bali

What are the benefits of a long lease?

From an investment standpoint, a long lease allows you to yield better ROI. Pre-COVID statistics showed that the short-term rental industry continues to grow in well known areas such as Canggu, Pererenan, and is expanding to undeveloped areas including Nusa Penida, hence why there’s still plenty of room for profit gain. The longer duration and possibility for extension will also make the property easier to sell if you ever need to, plus you can enjoy good capital appreciation if it’s located where property price increases quickly. 

However, the most important benefit is peace of mind because being able to spend a lifetime in a slice of paradise that you’ve invested so much in is a luxury that only few can afford. Sure you can buy freehold properties in Malaysia or someplace where foreigners can legally do so, but you can’t replicate Bali’s lifestyle and experience anywhere else.

Mediterranean Villa for Sale in Canggu - 26 Years

Interested in buying a property with a long lease in Bali? We have prepared a curated selection of villas and land offered with a long lease duration for you to choose from. Or perhaps you would like to rent for a year or two before settling down? We also have a selection of villas for rent with good prices. If you have any inquiries or need more information on buying Bali property, please don’t hesitate to contact us.

Also read: How to Start an Airbnb Rental in Bali as a Foreigner

Disclaimer: The content of this publication is provided as general information only and does not constitute legal, financial, tax, or other professional advice from Bali Home Immo. Some of the information provided on this publication is obtained from a third-party source and we do not guarantee that the content of this publication is accurate, complete or up-to-date. Past performance is not indicative of future performance and should not be relied upon as a basis for an investment decision.

Also read "What is a leasehold vs. freehold property in Bali?" for more information. 

3. Right to Use (Hak Pakai) – Available to Foreigners

Hak Pakai is the only title that foreigners can hold individually under Indonesian law.

Validity: 30 years, extendable for 20 + 30 years (maximum 80 years).

Ownership Limit: A foreigner can own only one property under Hak Pakai.

• Requirements: The buyer must have a valid stay permit (KITAS/KITAP).

Example:
David, a retiree from France, wants to buy a villa in Bali for personal use. Since he has a long-term stay permit (KITAP), he qualifies for Hak Pakai. He purchases a house under this title, allowing him to legally live in it for up to 70 years (30 years initially, with two 20-year extensions).

4. Right to Build (Hak Guna Bangunan – HGB) – Available Through a PT PMA

Foreigners cannot own HGB individually, but they can acquire it by establishing a PT PMA (Foreign-Owned Company).

• Land Use: HGB allows a PT PMA to construct and own buildings on leased land.
• Validity: 30 years, extendable for 20 + 30 years.
• Restrictions: HGB remains linked to the PT PMA and is not considered personal ownership.

There are two types of HGB:

1. Pure HGB (HGB Murni)

This occurs when a landowner releases their Freehold rights (Hak Milik) and transfers the land to the Indonesian government, which then reassigns it as HGB under the PT PMA’s name.

- The original Freehold ownership is permanently removed.

- During renewals, the process is handled directly with the Indonesian National Land Agency (BPN) without involving the previous landowner.

- If the PT PMA does not renew HGB, the land becomes a government asset.

- HGB can be sold to another PT PMA or an Indonesian citizen. If sold to an Indonesian citizen, it can be converted back into Hak Milik (Freehold).

2. HGB Above Freehold (HGB di atas Hak Milik)

In this case, the Freehold owner retains ownership but grants the PT PMA HGB rights for a set period through an agreement.

- The landowner and PT PMA agree on how long the PT PMA can hold HGB rights.

- During extensions, the Freehold owner must approve the renewal before the process is handled by BPN.

- If the PT PMA does not renew HGB, the land returns to the original Freehold owner.

- Any transfer of HGB to another PT PMA also requires the Freehold owner’s approval.

Important Note: HGB cannot be inherited by individuals because it is classified as a company asset. It can only be transferred to another PT PMA or sold to an Indonesian citizen to convert it back into Hak Milik (Freehold).

How to Establish a PT PMA as a Foreigner?

Foreign investors who want to own property under HGB must establish a PT PMA.

- Minimum Investment Requirement: IDR 10 billion (~$650,000) per business sector depending on the business sector.

- Company Structure: Requires at least 2 shareholders (can be foreigners/foreign company or locals/local company).

- Legal Documents: Must register in the system of OSS Indonesian Republic and have Business Trade Number (NIB).

- Company Director: At least one director must be appointed (can be foreign).

- Business Activities: The PT PMA must operate in an approved business sector, such as tourism or property rental.

Key Legal Considerations

1. Due Diligence: Commonly focus on legal matters to verify the legality of land and the legality of ownership

2. Notary (PPAT) Involvement: A certified Indonesian notary should process the transaction.

3. Tax Obligations for Freehold Transactions:

- Buyer’s Tax (BPHTB): 5% of the property value.

- Seller’s Tax: 2.5% of the property value.

4. Tax Obligations for Leasehold Transactions:

- Withholding Tax: 10% (with NPWP) or 20% (without NPWP) for the lessor.

- Notary Fee: 1% of the lease transaction value paid by the buyer.

Remember, foreigners cannot own freehold property in Bali, but they can legally acquire property through Hak Sewa (Leasehold), Hak Pakai (Right to Use), or Hak Guna Bangunan (HGB through a PT PMA).

Photo by Ruben Hutabarat

The most recent post-pandemic event in Bali shows the same signs of a strong U-shaped recovery in its statistics. In 2021 Bali received only 51 visitors for the whole year. Upon reopening the border in February, the number of international visitors surged to more than 600 thousand by July. That is a more than 10 thousand percent growth.

Pent-up demand after a long period of lockdown might also contribute to its explosive growth.

Bali always recovers stronger from challenging periods.

Source: BPS Provinsi Bali

Bali Villa Market Overview

Despite the number of international arrivals to Bali having a shocking spike and constant rise, the 4-5 starred hotel experienced a dynamic trend and relatively low occupancy rate. On average, the occupancy rate between January to July only scores around 25-27%. 

Despite the massive rise in foreign tourist arrival, the starred hotel still maintains a relatively low occupancy rate.

Source: BPS Provinsi Bali (2022)

A stark difference in the occupancy rate of villas. The 50th percentile of villas in Bali alone at least had a 60% occupancy rate in March. This number continues to rise until it finally reached 91% in August.

Villa occupancy retains a higher rate compared to starred hotels

Source: AirDNA (2022)

The demand and revenue growth for villas also continues to increase. The number of nights booked keeps rising from March until reaching nearly 40,000 in August.

Villa booking between March to August saw a staggering 152% increase.

Source: AirDNA (2022)

Bali villas in the 50th percentile range generated 20.9 million IDR in monthly revenue in March and steadily climbed to 110 million IDR in August. Whereas the 75th percentile of Bali villas generated around 53 million IDR a month in March and reached 179 million IDR in August.

Source: AirDNA (2022)

Opportunity for Bali Villa Market

The data shown above is a sign for Bali villas to seize the golden opportunity.

The lower numbers of people staying in hotels and positive growth in the demand for villas indicate that there’s a growing trend among international travelers that led them to lean toward villa rentals rather than hotels. It is even more so after the pandemic.

It stands to reason that villas offer more varied options for various kinds of tourists. It can accommodate the single digital nomad while also providing options for the large tourist group.

According to a survey, more people preferred to rent a private villa than a hotel for added privacy, security, and peace of mind.

Villa offers more variable options to choose from.

Photo by Bali Home Immo

Besides the supporting market statistics, there are other factors worth considering for the villa business in Bali after the border reopened.

As Indonesia established its vision to organize tourism that would bring brand awareness and revenue, its government also introduced convenient regulations and favorable policies that would facilitate tourism.

The most recent one is the implementation of a digital nomad visa that may let foreigners stay continuously in Indonesia for a total of 6 months.

The digital nomad visa will be an opportunity for the Bali villa

to capture the longer-stay international visitors.

Photo by Unsplash

The second home visa also might entice the advanced age group to spend their retirement years in a more climate-friendly Bali.

G20 as one of the most influential international events also brings new bouts of tourists to Bali, expanding its brand awareness and range of visitors to a considerable degree.

Also Read: Bali Opportunity in the G20 2022

With all these factors considered, the villa rental market in Bali should seize the golden opportunity presented.

Looking to buy or rent a villa in Bali? Our villas for sale and rent cover the best areas, including Canggu, Seminyak, Pererenan, Sanur, Uluwatu, and more. Interested in buying land suitable for residential or investment development? 

We also have an extensive selection of land for sale and lease that you might be interested in. No matter what your goal is, we aim to help find the right property that suits you perfectly so please don’t hesitate to contact us.

Disclaimer: The content of this publication is provided as general information only and does not constitute legal, financial, tax, or other professional advice from Bali Home Immo. Some of the information provided in this publication is obtained from a third-party source, and we do not guarantee that the content of this publication is accurate, complete or up-to-date. Past performance is not indicative of future performance and should not be relied upon as a basis for an investment decision.