Leasing land or a house in Bali

Under the Civil Code a lease (sewa-menyewa) is an agreement by which one party lets the other enjoy a thing for a fixed period against a price. The owner must hand over the property, keep it fit for the agreed use and let the tenant enjoy it in peace; the tenant must use it with care and pay the rent when due.

The land stays the owner's. A lease gives the right to use it for the agreed time, not a land right registered in the tenant's name.

The Basic Agrarian Law recognises a lease right for building: the right to use land owned by someone else for building on it, against rent paid to the owner, once or in instalments.

Indonesian citizens, foreigners domiciled in Indonesia, Indonesian legal entities and foreign legal entities with a representative in Indonesia may hold it.

We found no national rule that sets a maximum or minimum term for a private lease of land. The Civil Code asks only for a fixed period. Terms such as 25 or 30 years come from practice and from the contract, not from a statute.

A lease is different from Hak Pakai, a registered land right that a foreigner may hold. Hak Pakai on state land runs up to 30 years, can be extended by up to 20 years and renewed for up to 30 years. Hak Pakai on Hak Milik land runs up to 30 years and can be renewed by a new deed.

The law does not require a lease to be made before a notary to be valid. A deed made before a notary is full proof of what it says between the parties and those who succeed them. A signed private agreement has the same force between them only once the parties acknowledge their signatures.

A lease of registered land can be recorded at the land office, in the land register and on the certificate, if an interested party applies with a copy of the lease deed. Recording is optional. Registering a lease right for building over Hak Milik land in the land register needs a deed made by a PPAT.

A contract with an Indonesian person or private company must be written in Bahasa Indonesia, and, where a foreign party is involved, also in that party's language or in English. A signed agreement carries stamp duty of Rp10,000.

A sale of the leased property does not end an earlier lease, unless the lease itself allowed that. If it did, a buyer of land who wants the tenant to leave must give at least one year's notice.

A lease does not end when the owner or the tenant dies.

A written lease ends by law when the agreed time has passed, without notice. If the tenant stays on and the owner allows it, a new lease arises under the rules for unwritten leases.

No article deals with an option to extend as such. An option is a contract term, valid if it meets the general conditions for an agreement, and binding on the parties like a law. Write the price and the conditions of any extension into the lease.

The building approval (PBG) is applied for by the owner of the building. The building regulation states that clear land rights are an absolute requirement, and that a building may stand on another person's land under a land use agreement with the landowner.

When that agreement ends and is not extended, the building ownership certificate can be deleted on application. At the end of a lease the tenant may take away what they built at their own cost, if this does not damage the property. The law does not say who owns the building after that, so the lease must say it.

Hak Milik is for Indonesian citizens, with narrow exceptions set by law; a foreigner who acquires it by inheritance without a will or through mixing of marital property must release it within one year. Any act meant to transfer Hak Milik directly or indirectly to a foreigner, including a bequest by will, is void by law, the land falls to the state, and money already paid cannot be reclaimed.

Bali's 2026 regulation bans acting as a go-between or facilitator in arrangements where someone holds land on behalf of a foreign beneficial owner. The law gives no test for when a lease becomes such an arrangement. A lease that is a lease in substance, for a fixed time and a price, is lawful; ask your notary to check any side agreement, loan or power of attorney.

The person leasing to you is the holder named on the certificate, and the certificate matches the land office register.

Whether the certificate carries a mortgage (Hak Tanggungan). Ask your notary how a mortgage affects the lease if the owner's bank enforces it.

The plot is not protected farmland (LP2B) or protected rice field (LSD), and its zoning in the detailed plan (RDTR) allows what you plan to build.

If the land is joint marital property, both spouses consent to the lease.

The contract is in Bahasa Indonesia and in a language you read, and you understand every clause on renewal, the building and ending the lease.

The lease is made before a notary, and you decide whether to record it at the land office.

The owner pays a final income tax of 10 percent of the gross rent, including maintenance, security and service charges paid under the lease. This does not apply to income from lodging services, such as letting rooms, dormitories or boarding houses; ask your tax adviser how this applies to a villa let to guests. If the tenant is a domestic company or another withholding agent named in the regulation, the tenant withholds it; otherwise the owner pays it. See the page on taxes and official costs.