Disclaimer: This article is for informational purposes only. Prices and regulations may change. We recommend consulting a senior advisor before making any decisions.
Key Takeaways
- The official cost to convert leasehold to freehold in Bali is relatively affordable, estimated at around IDR 8–8.5 million ($473 - $503), depending on land size and tax value. However, this only covers government fees, BPHTB tax, and notary services.
- Before converting, investors should evaluate key factors such as remaining lease years, rental income, land appreciation, location demand, and exit strategy.
- In many cases, extending a leasehold can be more cost-efficient than converting.
- A well-managed leasehold can still deliver strong returns. For example, Ocean Breeze Villa in Nusa Dua shows a 13.20% net ROI and 75% occupancy rate, with capital recovery in 7–8 years.
- Foreigners cannot convert leasehold to freehold under personal ownership. The closest legal structure is through a PT PMA
How much does it cost to convert leasehold to freehold in Bali? This is one of the biggest questions foreign investors ask before investing in Bali real estate.
Many investors are more interested in freehold because it provides full ownership and flexibility, and some believe it can generate more profit compared to leasehold.
In reality, foreigners cannot convert their leasehold property into freehold under personal ownership. The only legal way to control a structure similar to freehold is through a PT PMA (foreign-owned company).
Still, let’s break down the cost to convert leasehold to freehold property in Bali to give you a clear overview. We’ll also review a real case example to show that a leasehold villa can generate strong rental income without needing to be converted
1. Land Registration Fee
The registration fee for land up to 600 m² is IDR 50,000 ($2,96). This is paid directly to the BPN during the application process.
This step is important for transferring property ownership, so the applicant must ensure all required documents are complete before submission.
Read More: Bali Leasehold Properties: Everything You Need to Know
2. BPHTB Tax (Land and Building Acquisition Duty)
BPHTB (Bea Perolehan Hak Atas Tanah dan Bangunan) is one of the property taxes in Bali. It is a regional tax charged on the acquisition of land and/or building rights by individuals or legal entities, and it is paid by the buyer.
This is usually the largest official fee. The amount is calculated using this formula: 5% × (NPOP – NPOPTKP)
Note:
- NPOP = Acquisition value
- NPOPTKP = Non-taxable threshold
Calculation example:
- NPOP: IDR 200,000,000 ($11,839)
- NPOPTKP: IDR 80,000,000 ($4,735)
- BPHTB: 5% × (200,000,000 – 80,000,000)
= 5% × 120,000,000
= IDR 6,000,000 ($355)
3. Measurement Fee
If the land is larger than 600 m², you will need to pay an additional land measurement fee. The formula is: [(Land Area / 500) × 120,000] + 100,000
For example, if you have leasehold land of 800 m² that you want to convert:
[(800/500) × 120,000] + 100,000
= IDR 292,000 ($17,29)
4. Konstatering Report Fee (Land Over 600 m²)
For land above 600 m², you also need a Konstatering Report.
This is an official field verification report that confirms the boundaries, size, and physical condition of the land and building. It ensures there are no procedural mistakes during the legal process.
The formula is: [(Land Area / 500) × 20,000 + 350,000] / 2
Calculation example - for 800 m² land:
[(800/500) × 20,000 + 350,000] / 2
= IDR 191,000 ($11,31)
5. Notary PPAT Fees
You will need a Notary or PPAT (Pejabat Pembuat Akta Tanah) to handle the legal upgrade from HGB to SHM.
The fee varies depending on property complexity and location. Generally:
- Around 0.5% – 1% of the transaction value, or
- Starting from IDR 2,000,000 ($118)
Read More: How to Find Good Notary Services in Bali for Foreigners
Total Estimated Cost to Convert Leasehold to Freehold (Example)
Let’s calculate the estimated cost using two scenarios:
- Scenario A: Land ≤ 600 m²
- Scenario B: Land = 800 m² (> 600 m²)
- NPOP = IDR 200,000,000 ($11,839)
- NPOPTKP = IDR 80,000,000 ($4,735)
Scenario A: Land ≤ 600 m²
- Land Registration Fee: IDR 50,000 ($2,96)
- BPHTB Tax: IDR 6,000,000 ($355)
- Measurement Fee: Not required
- Konstatering Report: Not required
- Notary PPAT Fee: IDR 2,000,000 ($118)
Total Estimated Cost: 50,000 + 6,000,000 + 2,000,000 = IDR 8,050,000 ($476)
Scenario B: Land = 800 m² (> 600 m²)
- Land Registration Fee: IDR 50,000 ($2,96)
- BPHTB Tax: IDR 6,000,000 ($355)
- Measurement Fee: IDR 292,000 ($17,29)
- Konstatering Report: IDR 191,000 ($11,31)
- Notary PPAT Fee: IDR 2,000,000 ($118)
Total Estimated Cost: 50,000 + 6,000,000 + 292,000 + 191,000 + 2,000,000 = IDR 8,533,000 ($505)
Disclaimer: These calculations only cover:
- Government fees
- BPHTB tax
- Administrative process
- Notary service
They do NOT include:
- Negotiation costs with the current landowner
- Legal structuring for foreign ownership
- Additional due diligence costs
How to Value a Leasehold Property Before Converting
Before deciding whether to convert leasehold to freehold or simply extend your lease, you must understand how to properly value a leasehold property.
1. Remaining Lease Years
The remaining lease term strongly affects property value. A leasehold is essentially the right to use land for a specific period. As that period gets shorter, the property value usually decreases (this is also one of the biggest leasehold risks you need to be aware of)
When only a few years remain, buyers often discount the price because they will need to negotiate an extension.
Read More: What Happens When Your Bali Villa Lease Expires?
2. Annual Rental Income
Rental income is a major factor in valuation. Many investors calculate property value based on expected income using a capitalization approach.
For Bali leasehold villas, you should estimate:
- Realistic annual rental income
- Occupancy rate
- Seasonal fluctuations
3. Land Appreciation Rate
Land prices in Bali have grown strongly in areas such as Canggu, Uluwatu, and Pererenan. Even though leasehold investors do not own the land permanently, rising land values can still increase resale value and extension negotiation power.
Read More: Cost of Property in Bali 2026: What You Need to Know
4. Location Demand
Properties near beaches, tourist attractions, and lifestyle amenities usually generate higher rental income and better resale demand.
Ask yourself:
- Is it near high-traffic tourist areas?
- Does it have access to beaches or nightlife?
- Can it achieve above-average occupancy?
5. Exit Strategy
Your exit plan matters. If the lease has only a few years left, resale becomes more difficult. But if the lease is long and extension terms are clear, the property can remain attractive.
In many cases, extending a leasehold can be more cost-efficient than converting to freehold, especially when conversion fees are high compared to property value.
Read More: Best Exit Strategies for Your Bali Property Investment
Is Converting Leasehold to Freehold Worth It?
It depends on your strategy. Converting can make sense if:
- You plan to hold the property for 20+ years
- The area has strong appreciation potential
- You want easier resale and maximum control
But you may not need conversion if:
- Your rental ROI is already strong
- Lease extension terms are reasonable
- You plan to sell within 5–10 years
Not every property needs to be freehold to generate strong returns. A good example is Ocean Breeze Villa in Nusa Dua by Ilot Property Bali, which shows how a well-managed leasehold property can still be highly profitable.
- Purchase price: $260,000 (IDR 4,3B)
- Net annual ROI: 13.20%
- Average occupancy rate: 75%
At 13.20% ROI, the property generates approximately $34,331 (IDR 579M) per year in net income. That means the investor could recover the initial capital in about 7–8 years, assuming stable performance.
If the lease term is 25 years, and the payback period is under 8 years, the investor still has around 17 years of profit after recovering the capital. Even without converting to freehold, the property remains cash-flow positive for a long time.
Read More: How Long Can You Really Lease in Bali? Unlock the Facts
Can Foreigners Change Bali Leasehold to Freehold?
No. Foreigners cannot directly convert leasehold property into freehold (Hak Milik) because Indonesian law reserves freehold ownership exclusively for Indonesian citizens.
Foreigners are limited to leasehold (Hak Sewa), Right to Use (Hak Pakai), and ownership via PT PMA (which can hold HGB). This means you cannot convert leasehold into freehold under personal ownership.
If you currently own a leasehold villa in Bali, your options are:
- Extend the lease
- Restructure ownership under PT PMA
- Purchase through an Indonesian spouse (if legally married under Indonesian law)
Conclusion
That is how you calculate the total cost to convert leasehold property into freehold. The final amount depends on land size and tax value.
However, foreigners cannot convert leasehold into freehold under personal ownership. If you want stronger control, setting up a PT PMA may provide a structure closer to “freehold-like” ownership.
Always remember that the full cost includes tax calculations, legal structure, negotiation fees, and professional services.
If you need more detailed guidance, our senior property specialist is ready to assist you for free. Book your free session here.
FAQ
1. Can you sell leasehold property in Bali?
Yes. A leasehold property may be sold or assigned to another party while the lease is still active. However, the new owner must follow Indonesian property regulations, and the original lease agreement must be formally transferred.
2. Can a leasehold property be changed to freehold?
Yes, but this option is only available to Indonesian citizens. If you meet the legal requirements under Indonesian law, you may be eligible to upgrade a leasehold title to freehold through the proper legal process
3. What happens after leasehold expires in Bali?
Once the lease period ends, the land and any buildings on it return to the landowner, unless both parties agree to renew or extend the lease before it expires.
