Disclaimer: This article is for informational purposes only; prices, figures and regulation may change due. We recommend speaking with a senior advisor before making any final decisions.
Key Takeaways
- Leasehold is a common and legal way for foreigners to own property in Bali, but renewal is not automatic. Tt depends on your contract terms and the landowner’s approval.
- Lease extensions must be processed through a notary (PPAT) with a new deed and physical signing; the process cannot be completed online.
- Start negotiating early (ideally 12–24 months before expiry, or before the lease drops below 20 years) to maintain resale value and stronger bargaining power.
- Extension costs are based on current land market value, not the original price, and can vary significantly depending on location, demand, and negotiation outcome.
Leasehold is one of the easiest ways for foreigners to own property in Bali, whether it’s a villa, land, an apartment, or a commercial space.
Even better, you can legally extend leasehold for up to 99 years in total—but, how?
Don’t worry, renewing a leasehold property is simpler than it sounds. In this article, we’ll explain how the extension process works in Bali, when you should renew, and the costs you need to prepare for.
Legal Requirements to Extend a Lease
Based on Law No. 5 of 1960 on Basic Agrarian Principles (UUPA), Law No. 11 of 2020 on Job Creation (Omnibus Law), and Government Regulation No. 18 of 2021, foreigners holding land under certain rights (such as Hak Pakai with a fixed term) may extend their rights if the following conditions are met:
- The land is still being properly used according to its original purpose.
- All conditions of the granted rights have been fulfilled.
- The rights holder still qualifies under Indonesian law.
- The land remains in accordance with spatial zoning regulations.
- The land is not being used or planned for public interest purposes.
In addition, approval from the land rights holder (the owner) is required. The owner’s consent is always essential.
How to Renew Lease on Leasehold Property (Step-by-Step)
Assuming your contract allows renewal, here are the typical steps to extend your Bali villa lease:
1. Seek Professional Advice
Once you decide to extend your lease, it is strongly recommended to work with a reputable real estate agent or legal advisor who specializes in Bali leasehold property.
An experienced advisor can:
- Review your contract
- Help you understand your negotiation position
- Provide market insights
- Guide you through legal procedures
Bali Villa Realty can help you with this. Our senior property specialists are ready to assist you, from selecting the right leasehold property, handling legal checks (due diligence), to negotiating directly with the landowner on your behalf.
Feel free to contact us here and discuss your situation.
2. Negotiate the Extension Terms
Your agent or advisor will help negotiate directly with the landowner. The negotiation usually covers length of extension, extension price, and payment terms.
The extension cost is generally based on current land market value, not the original lease price. This is where professional valuation and negotiation become very important.
Read More: How Long Can You Really Lease in Bali? Unlock the Facts
3. Draft and Sign the Lease Extension Agreement
Once the terms and conditions of the lease extension have been agreed upon, a formal lease extension agreement will be prepared by notary or PPAT. This document outlines all agreed details, including the extension period, any rental adjustments, and other provisions specific to your lease arrangement.
The process generally includes:
- Preparing the original lease deed, land certificate, ID card/passport of both parties, and other proof of ownership documents.
- The notary drafts the lease extension deed (authentic deed) for both parties to review.
- Once you are satisfied with the terms, both parties (the landowner and the tenant) sign the agreement before the notary.
- The notary records the agreement in the official register (waarmerking) or legalizes it to grant full legal force.
The renewal process typically takes 1–2 working days once documents are complete.
💡 Smart tips: It is important to seek legal advice to ensure all agreed terms are accurately reflected in the official deed.
4. Update Licensing (If You Operate a Rental Villa)
If your leasehold property is used as a rental business, you may also need to update your NIB (Business Identification Number) and adjust your tourism or rental license validity.
Keeping your permits aligned with your renewed lease ensures your business remains legal and operational.
Can Foreigner Renew Their Bali Villa Lease?
In practice, leasehold property in Bali can be structured to reach a total period of 80–99 years through extensions (see how leasehold works here). However, it does not happen automatically.
Unlike some countries that provide statutory rights to extend a lease, Indonesia does not grant automatic renewal rights for private lease agreements.
A leasehold agreement in Bali is a private contract between the landowner/freeholder (an Indonesian citizen) and the leaseholder (you or your PT PMA). So, your ability to renew depends entirely on:
- The wording of the original contract
- Your negotiation strength
- Market conditions at the time of renewal
- The landowner’s willingness
This is why contract drafting from day one is extremely important. Buyers should always review and discuss extension clauses carefully before signing.
If your contract includes an "option to extend" or a "priority right to renew", that is a positive sign and may allow you to continue for another 20–30 years.
That said, pay close attention to the terminology:
- “Extendable” → You may negotiate an extension, but there is no guarantee.
- “Guaranteed extension at fixed price” → Very strong protection for you, but rare.
- No extension clause → Renewal becomes a full renegotiation from scratch, and the owner is not obligated to agree.
Can You Renew Lease on Leasehold Property Online?
Many people ask whether they can renew a lease online. For foreign nationals, the answer is no, because the process requires:
- A new notarial deed prepared by a PPAT
- Physical signing before the notary
- Official registration
Therefore, it cannot be completed independently online.
Online services are available for visa extensions through Indonesia’s immigration website (evisa.imigrasi.go.id), but this is unrelated to lease renewal.
If you work with a real estate agency that has an in-house legal team and trusted notary partners like Bali Villa Realty, the process can be managed smoothly without you needing to handle every step personally.
When Should You Start the Renewal Process?
The ideal time to begin renewal discussions is 12–18 months before the lease expires. However, many professionals recommend starting even earlier (around 2–5 years before expiry) to secure better terms.
You should also understand the informal “20-year rule.” If your lease has less than 20 years remaining:
- Resale becomes more difficult
- Buyer interest decreases
- Bankability drops
A smart strategy is to renegotiate once your lease approaches this threshold, extending it back to a safer long-term duration. Waiting too long may result in higher market-driven prices, reduced negotiation power and risk of non-renewal. See what happens when your Bali villa lease expires for a clearer picture.
How Much Does It Cost to Extend a Lease?
There is no fixed government tariff for lease extension. The rates may range approximately from IDR 3,000,000 (around USD 192) to over IDR 30,000,000 (around USD 1,925) per are (100m²) per year. The figure is usually based on current land value at the time of negotiation and demand.
A common calculation approach is: Price per are × Land size × Extension duration.
For example, let’s say you’re leasing a property in Bali with the following details:
- Current land value: IDR 15,000,000 per m²
- Land size: 300 m²
- Total land value: IDR 4.5 billion
- Extension duration: 20 years
Landowners may request 40–70% of current land value for a 20-year extension, though this varies significantly. The final price always depends on:
- Remaining lease term
- Relationship with the owner
- Market conditions
- Area popularity
To verify fair pricing, you can check:
- NJOP (government land value reference)
- Local market transactions
- Professional property valuation
Conclusion
That’s how foreigners renew a leasehold term for a property in Bali. For expats, the extension must be processed through a notary (PPAT).
It cannot be done online, as a new property deed must be drafted and signed in front of the notary for legal validation. The costs will also vary depending on market value and the outcome of the negotiation.
However, the process can be much easier with the support of a real estate agency that provides legal and notary assistance. Bali Villa Realty can help you with negotiations, due diligence, and document handling—all in one place.
You can book a free, no-obligation consultation to discuss your situation with one of our senior property specialist. Let us help you plan your renewal strategy safely.
FAQ
Yes, they can be. When structured correctly, leasehold properties can offer long-term use and steady rental income potential.
When a lease term reaches its end and is not renewed, the land and any structures on it typically return to the landowner or the state, depending on the legal structure. There is usually no compensation once the term has fully expired.
One drawback is that leasehold properties can become harder to sell as the remaining lease term decreases. In some cases, ongoing payments such as ground rent may increase over time and potentially become expensive.
Generally, payments made toward a leasehold—such as ground rent or service charges—are not refundable. If you decide to move or sell, you typically cannot claim those payments back
