Invest in Land or Villa Bali: Better Option for Foreigners

Disclaimer: This article is for informational purposes only. We recommend speaking with a senior property advisor before making any final decisions.

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Key Takeaways

Investing in Bali property is not limited to villas. Many foreign investors are also drawn to land because it offers flexibility and the potential for long-term value growth.

So, which is the better choice for you: investing in land or a villa in Bali? Which is easier to access, and which could give you a better return?

Both options have their own costs, legal requirements, income potential, and risks. Let’s take a closer look at each one.

Which Type of Property Is Best for Your Investment in Bali?

From our perspective as a real estate agency, investing in a Bali villa can be a more practical option for foreign investors.

A completed and legally operational villa can start generating rental income sooner, so you don’t have to rely entirely on a long-term hold-and-exit strategy—which can become more complicated with leasehold property as the remaining lease term gets shorter.

Investing in a completed villa can also help you avoid much of the development process, including the time and additional costs involved in architectural design and construction.

That said, it always depends on your circumstances and investment goals. Land can still be a suitable option if you:

• Have a longer investment horizon.
• Want to create a distinctive villa or hospitality concept.
• Are comfortable navigating legal and construction processes.

Remember, there is no single best property type for every investor. Always match the investment to your objectives and risk profile first.

Can Foreigners Buy Land or Villas in Bali for Investment?

Yes, foreigners can buy land and villas here. However, you usually cannot own Indonesian freehold land, called Hak Milik, in your own name.

For both land and villas, you can invest using several alternative structures:

• Leasehold (Hak Sewa) – can be used by anyone, including tourists. It’s generally simpler and less expensive.
• Right to Use (Hak Pakai) – available to eligible foreign individuals who meet Indonesian requirements, including applicable residence and immigration conditions. It is intended for residential use only.
• PT PMA with HGB – suitable for commercial purposes.

The best structure always depends on your investment goals.

Read More: Do You Need a Specific Visa to Buy a Villa in Bali?

Pros and Cons of Investing in Land & Villas in Bali

Read More: Most Profitable Business to Invest in Bali for Foreigners (2026 Update)

Is It Cheaper to Buy Land or Turnkey Villas in Bali? Costs Breakdown

Land and villas come with different costs. For land investment, you typically pay per sqm, with prices generally ranging from $30 to $800 per sqm (or $3,000 to $80,000 per “are”—a local Balinese unit of measurement equal to 100 m²). Here are the details:

• Base land cost: $30 to $800 per sqm (always remember that land prices vary by area. Check our Bali property prices guide for a detailed breakdown).
• If you buy via leasehold:
  • Leasehold income tax (PPh): 10%–20% of the lease value (By law, this is an income tax levied on the seller. However, in practice, Bali sellers often quote prices as “net,” meaning they may try to pass this cost on to the buyer. Always clarify this upfront)
  • Notary / PPAT fee: 1%–2.5% of the lease value.
  • Total Estimated Leasehold Transaction Add-on: 2%–4% (assuming the seller pays their own tax).
• If you buy via PT PMA:
  • Buyer’s Land Acquisition Tax (BPHTB): 5% of the transaction value.
  • Seller’s Income Tax (PPh Final): 2.5%, paid by the seller.
  • Notary & Land Deed Official (PPAT) Fee: 0.5%–1% (regulated cap of 1%, often split between buyer and seller).
  • Value Added Tax (PPN): 12% (only applies if you are buying land from a taxable corporate entity or developer—not between private individuals).
  • Total Estimated Freehold Transaction Add-on: 7%–15%+, depending on PPN applicability and notary negotiations.

In addition, if you’re purchasing land and planning to develop it, you’ll need to budget for architectural and construction services. Once the building is completed, you’ll also need to account for property management and marketing.

If you buy a turnkey property instead, you’ll typically only need to handle ongoing villa management costs.

Read More: What Are the Annual Real Estate Taxes in Bali? Full Breakdown

Let’s Compare Land vs Villa Investment in Bali

Below is a simplified comparison between investing in leasehold land and investing in a leasehold villa in Bali. The figures are illustrative rather than a guaranteed investment forecast. Actual numbers can always vary.

Let’s say your property investment has the following assumptions:

This case study assumes that the buyer pays the agreed lease value plus a 3% buyer-side transaction allowance, covering notary, documentation, and related costs.

Scenario A: Invest in Leasehold Land

The investor leases 200 sqm of land for 25 years but does not immediately construct a villa. Here’s the investment value:

Investing in land means you won’t generate income unless the land is subleased or developed. However, if you buy land and hold it for several years, its value could increase as development in the surrounding area grows. This could create an opportunity for capital gains.

Now, if the investor later develops the land into a villa, additional costs may include:

The total investment would therefore become: $105,000 + $265,000 = $370,000

You need to understand how to exit safely if you want to invest in land. Foreign investors typically use leasehold structures, and the value of a leasehold asset can decrease as the remaining lease term gets shorter.

For example, if you lease land for 25 years and the land experiences 7% capital appreciation after 15 years, its actual market value could still be lower than expected because only 10 years remain on the lease.

If you want to maintain the property’s value, you may need to renew or extend the lease—which adds additional costs. The value compression caused by a shorter remaining lease term can offset a significant portion of that 7% capital appreciation.

Scenario B: Invest in a Leasehold Villa

In this scenario, the investor acquires a completed, furnished, and rental-ready two-bedroom villa on the same 200 sqm leasehold site. Here’s the initial investment:

This scenario assumes that the villa is completed and legally ready to operate. Here are the rental revenue assumptions:

With operating costs estimated as follows:

Your approximate net operating income may therefore be: $59,250 − $34,553 = $24,697 per year

This is before financing costs, investor income tax, and major capital expenditures.

Your estimated net return would be: $24,697 ÷ $345,000 × 100% = 7.2%

Estimated payback period: $345,000 ÷ $24,697 = 14 years

Conclusion

In the end, make sure to review costs, legal rights, income potential, development risks, operating expenses, and long-term goals. This will help you decide whether a plot of land or a turnkey villa is the better choice for you.

Still have questions or ready to explore options based on your budget? Share what’s on your mind, and let’s talk about it in more detail—all free, with no commitment required.

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