15 Things Every Foreign Buyer Worries About Before Buying in Bali, Answered Honestly

Table of Contents

Key Takeaways: Foreign Buyer Worries About Bali Property
Almost every issue prospective buyers have is with paperwork and legal issues, not with market conditions. Sorts out the paperwork first, and the market takes care of itself.
Nominee agreements are the most common negative circumstantial evidence in the market, and the legal and real estate industry in general. They offer no legal protection whatsoever.
Plan to spend at least 8-12% more than the purchase price to cover the costs for legalization, notarization, and other administration costs. These are the costs that catch buyers the most by surprise.

Buyers from abroad are always concerned with buying property in Bali, and it is not because the process is opaque. In fact, there is a lot of information online, and it is often times sensationalized to create a false sense of security or to instill needless anxiety. With more than 20 years of experience with clients from Europe, Australia and Asia, here is what is most often asked and answered.

Legal and Ownership Concerns

Is a leasehold safe, and what happens when it expires?

A properly structured leasehold in Bali is a notarised, legally enforceable contract, not a handshake deal. Standard terms run 25 to 30 years, and with a well-drafted extension clause specifying duration, notice period, and pricing, total terms of 50 to 80 years are achievable. The real risk sits entirely in that clause, without it written explicitly into the agreement, you have no automatic right to extend, and the property simply reverts to the landowner. Insist on a properly negotiated extension clause before you sign anything.

Are nominee agreements legal, and what’s the risk?

No, and this is the single most damaging misunderstanding in the market. A nominee arrangement, where an Indonesian citizen holds freehold title on your behalf, is expressly prohibited under Indonesian law and offers zero legal protection if the nominee disputes it, sells the property, or passes away. It is the leading cause of total investment loss among foreign buyers. Never use this structure, regardless of how it is presented to you.

Can a foreigner actually own property here, or is it always through someone else?

You own it, not “someone else” holding it for you. Leasehold gives you direct contractual rights in your own name. A PT PMA is your own company, with you as shareholder, holding a registered title. Hak Pakai, for residents, is a government title issued directly to you. None of these require trusting a third party with your ownership. Understand which structure suits your goal before you start looking at properties, not after.

What happens if the landowner dies or sells?

If your lease is properly notarised and ideally registered at BPN, it is binding on the landowner’s heirs or any new buyer of the underlying land. Informal or unregistered arrangements offer no such protection and can leave you exposed the moment ownership changes hands. This is precisely why the quality of your notary and paperwork matters more than the charm of the seller.

What is a PT PMA, and is it worth the cost?

A PT PMA is a foreign-owned company holding an HGB title, the strongest ownership structure available to foreigners, with capital requirements around IDR 2.5 billion and setup costs of roughly USD 1,500 to 3,000. It is genuinely worth it if you plan to operate a formal rental business, since current regulations require it for licensed short-term rentals. If you simply want a personal villa with no commercial ambitions, leasehold is usually the more proportionate choice.

For a full breakdown of every legal structure available to foreign buyers, read our complete guide to buying property in Bali as a foreigner.

Market and Financial Concerns

Are the rental yield numbers real, or just marketing?

Some are real, many are optimistic. Genuine gross yields across Bali currently range from roughly 6 to 14 percent depending on area and quality, but developer and seller projections routinely round up and rarely account for management fees, tax, and maintenance. Ask for actual historical booking data, not projected figures, and model your own net return before believing anyone else’s number. For current yield data by area, read our Bali property investment guide.

What does it actually cost, beyond the purchase price?

Budget an additional 8 to 12 percent on top of whatever price you agree. This covers acquisition tax around 5 percent, notary fees of roughly 0.5 to 2 percent, and company setup costs if you are using a PT PMA. Buyers who only budget for the headline price are the ones who feel ambushed later, plan for the full cost from day one.

Is now a good time to buy, or will prices drop?

Nobody can time this market with certainty, and treating it like a stock ticker misses the point. Tourism demand and genuinely limited land supply have supported values for years, but that does not mean every area or every property is a safe bet right now. Focus less on macro timing and more on whether the specific property, area, and structure make sense for your own horizon.

What if I can’t find tenants?

This is a real and common failure point, usually caused by buying in an oversupplied area with a generic villa and no management plan. Areas differ enormously in occupancy and guest profile, and a well-designed property with professional management consistently outperforms an average one in a supposedly better location. Choose your management company and target guest before you choose the villa, not after settlement.

How do I get money in and out of Indonesia?

Funds move through licensed banks and registered money transfer providers, with standard know-your-customer documentation required on both ends. This is not a grey area to improvise around, using informal channels or unlicensed transfer agents creates real legal exposure. Work with your bank and notary to set up the correct transfer process before you need to move any significant sum. For business licensing and company registration matters, the official OSS business licensing portal is the authoritative source.

Process and Trust Concerns

How do I know I’m not getting scammed?

Due diligence removes almost all of this risk. Verify the land certificate directly through the official BPN National Land Agency rather than trusting a copy from the seller, choose your own notary rather than accepting the seller’s, and insist your deposit goes into a notary escrow account, never directly to the seller or a nominee. The buyers who get burned are almost always the ones who skipped one of these three steps under time pressure. For the full verification process, read our Bali property due diligence checklist.

I don’t know anyone in Bali, who do I actually trust?

Trust the process and the paper trail, not a single personality. An independent notary, ideally an independent lawyer for anything substantial, and an agency with a genuinely verifiable track record together create checks on each other. No single relationship, however warm it feels, should be the only thing standing between you and your money.

I’ve never bought property abroad before, where do I even start?

Start with understanding the ownership structures before you start looking at villas, not the other way around. Most people begin with the exciting part, browsing properties, and only confront the legal questions once they are emotionally attached to a specific villa, which is exactly when clear thinking gets harder. Get the legal picture straight first, then let it inform what you actually look at.

What if something goes wrong after I buy?

Your recourse depends entirely on how the purchase was structured in the first place. A notarised leasehold or a properly registered PT PMA gives you genuine legal standing to act if a dispute arises. An informal or nominee-based arrangement generally does not, which is why the paperwork you accept at the start defines your options later, retroactively fixing a bad structure is far harder than doing it properly the first time.

I visited Bali once, is that enough to make this decision?

Loving a place on holiday and understanding it as a property market are two different things, and conflating them is how good instincts lead to bad decisions. A single visit tells you about the beaches and the food, not about zoning, area saturation, or which micro-location will actually perform. Use that instinct as a starting point for curiosity, not as the basis for a six-figure decision.

Where This Leaves You

Excel Real Estate Bali has spent more than 20 years helping international buyers work through exactly these questions, across both leasehold and freehold-equivalent structures, without the sales pressure that so often clouds this market. If any of this raised a question specific to your own situation, our team is happy to talk it through. You can also start with our short property finder, a conversational way to tell us what you are after before we point you toward anything specific.

Start here: excelbali.com/start-your-bali-journey

Karl: +62 815-5701-729
Siska: +62 815-5749-228
Email: info@excelbali.com

Frequently Asked Questions

What is the biggest risk foreign buyers face in Bali?

The biggest risk is using an illegal nominee arrangement to hold property, or skipping due diligence on the land certificate and zoning before signing anything. Both are entirely avoidable with the correct legal structure and proper verification at the outset.

How much should I budget beyond the purchase price when buying in Bali?

Budget an additional 8 to 12% above the purchase price for acquisition tax, notary fees, and PT PMA setup costs if applicable. This is the most common area where buyers underestimate their true total cost.

Is leasehold or PT PMA the right structure for a first-time foreign buyer in Bali?

Leasehold suits buyers who want a personal villa without commercial ambitions, and requires no company setup. PT PMA suits buyers planning to operate a formal rental business, since current regulations require it for licensed short-term rentals.