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Bali’s real estate market offers incredible opportunities, but deciding between freehold (Hak Milik) and leasehold (Hak Sewa) can be daunting. Whether you’re an experienced investor or buying property in Bali for the first time, understanding these ownership options is critical to making an informed decision. Freehold vs. Leasehold: Which one is the best option for property investment in Bali? Let’s break it down for you.
What’s the difference: Freehold and Leasehold?
Freehold (Hak Milik)
- What it means: This is the highest form of property ownership in Indonesia. You own the land and any structures on it indefinitely.
- Who can own it: Only Indonesian citizens are legally permitted to hold freehold titles.
Leasehold (Hak Sewa)
- What it means: Leasehold allows you to lease land for a set period, typically 25–30 years, with options to extend up to 80 or even 99 years. Once the lease ends, ownership reverts to the landowner.
- Who can own it: Leasehold is the most common and legally sound option for foreign investors.
Why choose freehold?
If you’re an Indonesian citizen or have a legal partner in Indonesia, freehold ownership is the ideal option for long-term investment:
- Complete ownership: You own the land indefinitely, offering maximum stability and control.
- Generational wealth: Freehold properties increase in value over time and can be passed down to future generations.
- Flexibility to sell: You can sell or transfer ownership without restrictions.
Note for foreigners: Non-Indonesians cannot legally own freehold property directly. Alternatives like nominee arrangements or setting up a PT PMA (a foreign-owned company) exist, but they come with legal complexities and risks.
Why choose leasehold?
For foreign investors, leasehold is the safest, most straightforward choice. Here’s why:
- Lower entry cost: Leasehold properties are more affordable than freehold, making them accessible to a wider range of investors.
- Rental income potential: Leasehold properties in tourism zones are highly lucrative for short-term rentals, offering excellent ROI.
- Flexibility: Ideal for short- to mid-term investments. Investors often enjoy rental income for 10–15 years before selling the remaining lease for a profit.
Which option is right for you?
The right choice depends on your investment goals:
- Foreign Investors: Leasehold is the most secure and legal option for owning property in Bali.
- Indonesian Citizens: Freehold offers long-term stability and control, making it the superior choice for generational wealth.
Why work with Seacrest Real Estate?
Navigating the complexities of Bali’s real estate market requires expert guidance. That’s where Seacrest Real Estate comes in:
- Exclusive listings: Access the best freehold and leasehold properties in emerging hotspots like Kedungu, Nyanyi, and Seseh.
- Legal expertise: Our team ensures all transactions are compliant with Indonesian property laws.
- Comprehensive support: From negotiations to legal paperwork, we handle every step to make your investment seamless.
Your Bali property journey starts here
Whether you’re seeking a beachfront villa, rental investment, or long-term home, Seacrest Real Estate ensures you get the best deal tailored to your goals. Either Freehold or Leasehold, property investment in Bali, we will give you the best option for you.
Ready to explore your options? Visit Seacrest Real Estate today and take the first step toward owning your dream property in Bali.
