Most villas sold to foreign investors in Bali are leasehold. In this system, the contract is the asset: its quality determines what you actually own. Here are the ten points I systematically have checked.
1. The exact term and the start date
Does the lease run from signing, from handover or from another date? On a project delivered in two years, the difference can mean two fewer years of use.
2. The extension option
Is the right to extend written down? At what price (fixed, indexed, “to be negotiated”)? With what notice? An extension “to be discussed” is not a guarantee.
3. The right to assign the lease
Can you resell your leasehold to a third party without the lessor's consent, or with consent that cannot be withheld without reason? This is your exit route.
4. Transfer in the event of death
Can the lease be passed on to your heirs? The clause must be explicit.
5. The right to sublet
Essential for a rental investment: holiday letting to third parties must be expressly authorised.
6. The operating licence
Who holds or will apply for the rental licence? Does the lessor undertake to maintain it? What happens if they do not? See the rental rules in 2026.
7. Permits and compliance
Does the contract mention the building permit and the certificate of conformity? Who bears the consequences of non-compliance that predates signing?
8. What happens to the buildings at expiry
At the end of the lease, does the villa revert to the lessor without compensation? Is a right of first refusal to renew provided for?
9. Taxes and charges
Who pays the annual land tax, the taxes linked to the lease and any service charges of the development? These items must be quantified.
10. Governing law and language
Is the contract drafted in Indonesian with a faithful translation? Which court or arbitration procedure applies in the event of a dispute?
In summary
- An attractive price does not make up for a weak contract.
- Have the lease reviewed by a lawyer who is independent of the seller.
- Require the lessor's title to be verified with the land office (BPN) by a PPAT notary.
Frequently asked questions
What leasehold term should you aim for in Bali?
Leases of 20 to 30 years are common. More than the headline term, look at the term remaining at handover and the written extension conditions.
Can a leasehold be resold?
Yes, if the contract allows the lease to be assigned. Resale value depends heavily on the remaining term.
Does a leasehold pass to heirs?
Only if the contract explicitly provides for it. Check this clause before signing.
Mago Kitaev, licensed real estate broker in Dubai (RERA, BRN 82528), based in Business Bay. A former project manager in banking and IT, he has been advising French-speaking investors since 2024. See his background
This article is for information purposes and was updated on 28 September 2026. It does not constitute legal, tax or financial advice. Indonesian regulations change frequently: have every project checked by an independent PPAT notary and an independent lawyer.