What Happens After the Lease Expires? Bali Leasehold Property Guide

Leasehold is the main way for foreigners to own property in Bali. It offers access to Bali’s property market with a more affordable entry point. But what happens when the lease expires?

You can either renew the lease or return the property to the landowner. Some people also choose to sell the remaining lease to make a profit.

Still unsure what to do? Today, we’ll share tips and strategies for when your lease ends—based on our experience helping clients navigate expired leases in Bali. Let’s dive in.

Contents

Key Takeaways

When a lease expires, you can choose to renew it, renegotiate with the landowner, sell the remaining lease, or return the property.
Any buildings or improvements made during the lease usually go back to the landowner, unless your lease says otherwise.
Renewal costs are unpredictable, as they depend on market trends and land value—but prices in Bali often increase over time.
Selling a leasehold is allowed, either by subleasing or terminating your lease and letting the landowner sign a new one with the buyer.

With over 12+ years in the market, here’s what we can do for you:

Find the best location to invest in Bali.
Reliable guidance on Bali’s property market and laws.
Personalized strategy to maximize returns and meet your financial goals.

How Leasehold Works in Bali

When you buy a leasehold in Bali, you’re buying the right to use the property for a set number of years. Lease terms are typically between 25 to 30 years, though they can be as short as 15, or as long as 99 years.

It’s not full ownership like freehold property, but it allows you to enjoy the land and any buildings on it for a specific time and without any complicated ownership structure.

Consequences of Not Renewing a Lease in Bali

lease expires consequences — *Source: Seekers Guidance – What happens when a lease runs out on a property you own*

When a property lease in Bali reaches its end date, both landlords (lessors) and tenants (lessees) face important decisions that can affect their finances, legal standing, and future plans.

For lessees: Missing the lease renewal deadline can lead to losing property rights, disrupting income, business, or investment plans. It may also cause legal uncertainty or force renegotiation under worse terms.
For lessors: Letting a lease expire without renewal can result in lost income and vacant property. Landlords must choose to renew, adjust terms, or find new tenants—while following local property laws.

That’s why it’s crucial for both parties to review their original lease agreement, stay proactive, and seek legal advice if needed.

What to Do When Your Villa Lease Expires

option When Your Villa Lease Expires — *Source: GKT.com* – *What happens when your rental agreement expires*

When the your rental agreement expires, you generally have four main options:

1. Renewal the Lease

These are clauses written in your original lease agreement that allow you to extend your lease under pre-agreed terms. You just need to follow the conditions stated to renew.

2. Negotiating a Lease Extension

If your lease doesn’t include renewal terms, you’ll need to negotiate directly with the landowner to extend your stay. This could mean adjusting price or contract terms.

3. Return the Property

If renewing doesn’t interest you, you can return the property to the landowner.

In most cases, any buildings or improvements you’ve added will also go to the landowner unless you’ve arranged otherwise in your lease.

4. Sell the Remaining Lease

If your lease has time left, you can sell those remaining years to another buyer. This option is especially helpful if your plans change and you want to recoup some of your investment.

Will Lease Extensions Become Cheaper Over Time?

Many foreigners often ask, “Will it cost less to renew my lease later?”. Unfortunately, renewal costs in Bali are hard to predict because they depend on current land values and market trends.

In reality, land prices in Bali tend to rise, meaning renewal costs are more likely to go up rather than down.

However, if you include a renewal clause in your lease, you may be able to lock in a predictable renewal price or rate, helping keep your future costs stable.

Pro Tip: Negotiate a renewal clause before you sign the lease. This is an agreement between you and the landowner on extending your lease if you decide to stay longer.

What Happens to Building and Improvements when the Lease Expires?

Another thing to consider is what happens to any buildings or improvements you’ve made on the property when the lease is up.

In Bali, the general rule is that structures and improvements revert to the landowner once the lease expires unless you agree on something different.

However, if you structure your lease well, you may be able to negotiate terms that let you sell any improvements to a new leaseholder.

But more often than not, all the improvements you’ve made will revert to the landowner. So, plan and decide wisely.

Tips on Planning Your Leasehold for the Future

When you’re considering a leasehold, it helps to think about the long-term goal. Planning can ensure you’re covered when the lease ends, so you can focus on enjoying your Bali property now.

Here are some smart strategies to consider:

Include a Sale Clause: This lets you sell any remaining lease years if your plans change, giving you more flexibility to move on.
Choose a Longer Lease: Longer leases often cost more upfront, but they give you stability, especially if you plan to stay in Bali for a while.
Negotiate a Renewal Clause: Agreeing on a renewal option upfront can prevent surprises when the lease expires.

Final Thoughts

Leasehold property in Bali is a great way to make the island your home for years to come, but it’s wise to plan for when the lease expires.

With a good renewal clause, flexible terms, and an idea of what to expect, you can prepare for an easy transition when the time comes to renew or move on.

Hopefully, this guide will clarify questions about leasehold expiration, helping you feel more informed and prepared for the future.

If you need more information or find villas in the right location, click below to book your free, no-obligation strategy session.

Have a quick chat with our real estate experts for personalized advice on your Bali investments. No commitment required.

FAQ

1. Can I sell my leasehold property in Bali?

Yes, you can. You can either sublease it to the new buyer or end your lease and have the owner create a new lease directly with the buyer.

2. How much does it cost to extend a leasehold in Bali?

It depends on the property’s location and market prices, but it usually ranges from IDR 500 million to 1 billion.

3. What are the disadvantages of extending a lease?

You’ll usually need to negotiate with the landowner, which can take time and may not always be in your favor.

4. How do I sell a leasehold?

Start by hiring an agent, then inform the landowner. You’ll need a lawyer, collect all documents, review offers, answer buyer questions, and finalize the deal through contracts.

5. What happens when a 99-year lease expires?

The land goes back to the original owner, and you no longer have rights to the property. In many cases, the landowner is the government or a developer.