Why Long Lease in Bali Is More Profitable Than Freehold
When it comes to buying property in Bali, one of the first questions investors ask is:
“Should I buy freehold or leasehold (long lease)?”
While freehold might sound more appealing at first, in Bali’s unique property market, a long lease is often the smarter and more profitable choice — especially for foreign investors. Let’s break down why.
1. Foreigners Can’t Legally Own Freehold Land
In Indonesia, freehold (Hak Milik) ownership is only available to Indonesian citizens.
Foreigners can’t directly own land under freehold status — unless they go through complex legal structures involving local nominees or company setups, which carry potential risks.
That’s why most foreign investors choose long lease (Hak Sewa or Hak Pakai) — it’s safe, legal, and secure for up to 30 years or more.
2. Lower Initial Cost = Higher ROI
Leasehold properties in Bali usually cost 30–50% less than similar freehold properties in the same area.
That means you can invest less money upfront and get returns faster.
For example:
- Freehold villa: IDR 7 billion
- Leasehold villa (25 years): IDR 4.5 billion
If both rent for IDR 400 million/year, your ROI from the leasehold is significantly higher.
In short: smaller investment, same rental income, higher return!
3. Flexible Duration and Renewal Options
A standard long lease in Bali lasts between 20 to 30 years, and many contracts allow extension clauses at market value.
This gives you long-term control and flexibility — you can rent it out, resell the remaining lease, or even renew for another 20–25 years.
Most investors treat leasehold villas like “mini freeholds” — you can manage, design, and profit just the same way.
4. Easier to Resell to Other Foreigners
Foreign buyers are much more comfortable purchasing leasehold villas, since they don’t need to worry about legal complications.
This makes the resale process smoother and faster — especially in high-demand areas like Canggu, Pererenan, Uluwatu, and Bingin.
5. No Need to Deal with Complex Legal Ownership
Owning a freehold through a local nominee or company (PMA) can be complicated, with legal fees, taxes, and ongoing maintenance costs.
Leasehold ownership, on the other hand, is simple and straightforward:
- You pay once upfront.
- The villa is yours to use, rent, or manage.
- No corporate paperwork or nominee risk.
6. You Still Get Capital Appreciation
Even though leasehold properties have a time limit, prices in strategic areas like Canggu and Uluwatu continue to rise due to high demand.
So, if you buy a leasehold villa early in a developing area, you can still resell it later at a profit before the lease runs short.
Conclusion
In Bali’s property market, long lease (leasehold) gives you the best balance between profit, legality, and peace of mind.
It’s the ideal option for foreigners who want to invest safely, generate rental income, and enjoy a tropical lifestyle — without worrying about ownership restrictions.
Looking for the Best Long Lease Opportunities in Bali?
JC Bali Property specializes in premium long-lease villas across top areas like Canggu, Pererenan, Seseh, and Bingin.
We help investors find the right property with strong ROI and secure contracts.
Contact us today to start your Bali investment journey!
