Freehold ownership is highly desirable for expats looking to invest in property in Bali. Having a place that’s fully yours, with no time limits, sounds perfect. But what does freehold ownership really mean, and more importantly, is it the best choice for you?
In this guide, we’ll explain how freehold property works in Bali, the main benefits, and some of the challenges you might face along the way.
By the end, you’ll have a clear picture to help you decide if buying a freehold villa in Bali is the right step for your future.
Key Takeaways
- Freehold means full, permanent ownership but is only available to Indonesian citizens; foreigners usually need a PT PMA or Hak Pakai title.
- Key benefits of freehold property ownership include lifetime ownership, strong capital growth, rental income opportunities, and full freedom to design or renovate.
- Challenges of freehold ownership include higher upfront costs, legal complexities, and market risks—making expert guidance essential.
Explore Top Deals: Available Bali Villa For Sale - Freehold!
What is Freehold?
A freehold is the complete ownership of the villa/building and the land it sits on. With a freehold villa, you literally own every part of the property—it is 100% yours forever, with no time limits or leases involved.
This is different than some other property types:
- Leasehold: You temporarily rent or lease the property for a set number of years, like 25-30 years. When the lease ends, you must renew, pay fees, or move out.
- Right to Use/Build (Hak Guna Usaha/Hak Pakai): You can construct a villa on land you don't fully own; you just have permission to use it for a limited time.
However, Indonesian regulations allow this type of ownership only for Indonesian citizens, making it difficult for foreign buyers to acquire freehold property. Still, many investors believe the long-term security and potential profits outweigh the higher costs and added challenges.
Here’s a quick look at the pros and cons of freehold ownership:
| Pros | Cons |
|---|---|
| Full ownership and authority over the property and investment | Requires a larger upfront payment compared to leasehold options |
| Freedom to use the property without limitations | All maintenance and upkeep costs are the owner’s responsibility |
| Can be inherited and kept within the family for generations | — |
Read More: Freehold vs Leasehold: Which Ownership Type is Right for You?
What Are the Benefits of Leasehold for Foreign Investors?
After knowing what freehold is, here are five benefits you can get from owning a freehold investment property in Bali:
1. Total Investment Security
With a freehold, you permanently own your Bali villa—no time limits, no lease expirations, and no renewal fees. The property is yours for life and can even be passed down to your children and grandchildren.
Unlike leasehold, which ends after 25–60 years and often loses value as the expiration date approaches, freehold ownership gives you complete confidence.
It’s the most secure way to invest in Bali real estate with no future uncertainty.
Read More: What Happens After the Lease Expires? Bali Leasehold Property Guide
2. You Own It Forever
A freehold title means you own both the land and the villa forever. This is different from leasehold, where you only rent for a set period.
Freehold property can be inherited, ensuring it stays in your family for generations.
You have full control and freedom to manage, use, or pass down your property as you wish. It’s the ultimate option for investors seeking permanent ownership in Bali.
3. Your Investment Grows in Value
Bali is one of the world’s most popular destinations, but land in prime areas is limited. This scarcity drives property values up over time.
Freehold villas in Bali's prime areas have shown steady growth—around 6–8% annually in the past decade. Owning freehold property allows your investment to appreciate significantly over the years.
4. Make Money by Renting It Out
Bali attracts over 6 million tourists every year, creating strong demand for luxury villa rentals. By renting out your freehold villa, you can generate consistent income to cover costs or even profit.
With the help of a professional property manager, your villa can stay fully booked, while they handle everything from marketing to guest services and maintenance.
5. Design Your Dream Villa
As the full legal owner, you can design and upgrade your villa however you like. Want a private pool, a Balinese-style redesign, or a lush tropical garden? With freehold ownership, the choice is yours.
This flexibility lets you create your dream home in Bali or design a unique rental property that appeals to guests.
How Does Freehold Ownership Impact Foreigners Buying Property?
As noted earlier, foreigners are not allowed to directly purchase freehold property in Bali. Still, there are alternative ways that make investing possible.
One common method is to establish a local PT PMA company (a foreign-owned company) that can legally buy property on behalf of its foreign shareholders.
Another option is to enter into a long-term lease agreement with a local owner. In this case, the property remains under the local’s name, but you secure a contract that grants you usage rights—often for rentals—in exchange for an agreed payment to the legal owner.
Things to Consider for Foreign Investors
Before you buy a freehold investment in Bali, you should be aware of 3 things to have a safe and lucrative investment:
1. Legal Ownership Structure
Foreigners cannot directly buy freehold property in Bali under their own name. Instead, you need a legal structure recognized by Indonesian law.
The most common option is setting up a PT PMA (foreign-owned company). This entity allows foreign investors to legally acquire freehold land and villa ownership rights.
It’s strongly recommended to work with a qualified local legal expert to establish your PT PMA correctly and avoid complications.
Read More: Can Foreigners Own Property in Bali (2025)?
2. Higher Upfront Costs
Freehold villas in Bali usually have higher prices compared to leasehold properties. This reflects the permanent ownership benefits that freehold provides.
While leasehold might look cheaper at first, its limited duration reduces long-term value. Freehold, on the other hand, is a lifetime asset that can grow significantly in value over time.
Paying more upfront secures an investment that can appreciate steadily over decades.
3. Monitor Market Trends
Like any real estate investment, freehold properties are affected by market conditions. Factors such as location, new developments, tourism growth, and the economy all play a role in determining value.
To make the best decision, stay updated on market data and work with a trusted local agent.
At Bali Villa Realty, we provide real-time insights and expert guidance to help you secure the right freehold property with strong growth potential.
Challenges of Buying and Managing a Freehold
Buying a freehold doesn’t mean all problems disappear.
1. Managing a Freehold Is Not Always Simple
Owning a freehold doesn’t remove all challenges. Running a building involves strict rules and regulations, from fire safety to maintenance laws.
If you also take on the role of company director, you must understand and fulfill these responsibilities. Even with a managing agent handling daily tasks, you remain ultimately accountable.
2. Conflicts Between Co-Freeholders
Disagreements among co-freeholders are common. Tensions often arise when chasing late payments, especially since those who owe money may also be your neighbors. This can create uncomfortable situations that need careful handling.
3. Complex Purchase Process
Acquiring a freehold can be complicated from the start. Drafting the initial notice is not straightforward, and calculating the purchase price depends on many variables.
Factors such as commercial units, caretaker flats, roof development potential, or layered ownership structures can add even more complexity.
4. Keeping Leaseholders Motivated
If the process takes too long or costs rise, some leaseholders may lose interest or even pull out.
Coordinating payments and getting documents signed on time can be especially challenging when some owners live abroad. Strong organization and communication are crucial to keeping everyone aligned.
5. Overcoming the Drawbacks
Although there are many challenges, they are not impossible to solve. By working with proactive and experienced solicitors and valuers, you can anticipate potential problems early and find effective solutions.
This teamwork can smooth the path to successfully securing the freehold.
Read More: Managing Your Bali Investment Property from Abroad: Expert Tips
Conclusion: Securing Your Bali Freehold Investment
More foreigners are investing in Bali, and freehold villas are a top choice. This option gives you stability and full control over your property.
Since foreigners can’t directly own property in their name, you’ll need to set up a PT PMA company or choose a long-term leasehold.
We understand that navigating Bali’s real estate market can feel challenging. That’s why choosing the right partner, like Bali Villa Realty, makes all the difference. For over 14 years, we’ve guided expats step by step—ensuring every purchase is legal, secure, and aligned with long-term goals.
If you have any questions about investing in a Bali villa, we’re here to help. Click the link below to book a free, no-obligation consultation with one of our agents at your convenience.
FAQ
1. What is the difference between leasehold and freehold in Bali?
Freehold gives permanent ownership of the property, but it is only available to Indonesian citizens. Leasehold, on the other hand, allows you to use the land for a fixed period (usually 25–30 years) with the option to extend.
2. Can you own freehold land in Bali?
Foreigners cannot directly own freehold land. However, if you have a valid residential stay permit, you can purchase one home by converting the freehold into a Hak Pakai (Right of Use) title under your own name.
3. Is it worth buying a freehold?
Yes, because owning a freehold means you don’t have to worry about paying extra fees to extend a lease. Over time, this can save you a significant amount of money compared to leasehold.
