Leasehold or Hak Pakai? What a KITAS Holder Should Choose in 2026

The short answer is this. If you live in Bali on a KITAS or KITAP, plan to keep the house for a long time and the property clears the minimum price threshold, Hak Pakai gives you a title in your own name in the BPN register. If you are buying an investment villa, visit the island a few times a year or are not sure your resident status will last for decades, leasehold is simpler, cheaper to enter and does not depend on a visa. In 2026 most foreign purchases in Bali go through leasehold, and Hak Pakai remains a tool for a narrow circle of residents. Below we compare both forms along eight axes, run the numbers and say who each suits.

Two forms, two different kinds of right

Leasehold, Hak Sewa in Indonesian, is a land lease agreement between you and a private owner. The owner stays the owner, their Hak Milik certificate sits at BPN unchanged, and you receive the right to use the plot, build on it, let the house and transfer your rights for an agreed term. A notary certifies the agreement, and the term, price, extension, inheritance and assignment all live in its text. It is open to any foreigner with no visa conditions.

Hak Pakai is a state right-of-use title. It is not a contract with a private person but an entry in the BPN register in your name with a certificate issued to you. A foreigner can hold Hak Pakai over a house or a plot for a house under two conditions. First, they legally reside in Indonesia on a KITAS or KITAP. Second, the property costs no less than the minimum threshold the ATR/BPN ministry sets for each province. The base rules come from PP 18/2021 and 2021 ministerial regulations, and the specific thresholds are revised from time to time.

That difference in the nature of the right explains almost everything else. Leasehold is your relationship with a specific person for a specific term. Hak Pakai is your relationship with the state, and the state sets conditions for the holder.

A comparison along eight axes

Who qualifies and what the price threshold means

Leasehold is open to everyone. Any passport, a tourist visa, a visa on arrival, none of it affects your right to sign a lease. That is why leasehold became the market standard for foreign buyers, and the median lease term in Bali villa listings is 26 years as of September 2026, as we covered in the article on villa lease terms.

Hak Pakai is closed to non-residents. You need a valid KITAS or KITAP, and the notary will check it before signing. The second filter is price. For each province the ministry has set a minimum value for the house or apartment a foreigner may hold on Hak Pakai. For Bali the threshold for a detached house is among the highest in the country and, by open data, runs into billions of rupiah, which means most off-plan villas in Ubud do not qualify. Confirm the exact figure with a notary on the date of your deal, because thresholds are revised.

Leasehold is your relationship with a specific landowner for a specific term. Hak Pakai is your relationship with the state, and the state sets conditions for the holder.

Term and extension

A leasehold runs for whatever the contract says. Notaries in Bali certify a single term of up to 25–30 years, after which extensions follow. In the projects DOMA runs the horizon is built as 29+10+30 years, 69 in total, with a price formula for each step written into the agreement. How that structure works and what to check in it is covered in the glossary entry on leasehold extension and in leasehold in Bali for foreigners. The weak point of leasehold is that the extension is an obligation of a specific owner and their heirs, not of the state.

A Hak Pakai on state land has a statutory term. PP 18/2021 gives 30 years, an extension of 20 and a renewal of another 30. The extension is an application to BPN, not a negotiation with an owner. If the Hak Pakai sits on private Hak Milik land, the term is up to 30 years and renewal goes by agreement with the owner through a new deed, closer to leasehold logic. In practice most homes for foreigners are set up on private land, so ask the notary which of the two regimes your property falls under.

Registration at BPN and what you hold

A leasehold is not entered in the BPN register as a title. You hold a notarial lease deed, the owner holds their certificate. Checks come down to a clean owner's certificate, a cadastral number in the lease that matches the certificate, and plot zoning that allows housing and rental. That takes a few days through a notary and a BPN extract.

Hak Pakai goes through full registration. A PPAT notary draws up the deed, BPN re-registers the right and issues a certificate in your name. Since 2026 the PERINTIS programme compresses re-registration to 10 working days, and Gianyar joined it on 24 September 2026, see the article on land registration in 10 days. The upside is that your title is visible in the state register, easier to mortgage and harder to challenge. The downside is that notaries handle Hak Pakai less often than leasehold, so check the specific PPAT's experience before the deal.

Inheritance and sale

A leasehold is inherited as a contract. To keep heirs out of court, the notarial deed must carry an explicit clause on the transfer of rights to heirs, which we covered in the article on inheriting a leasehold villa. The heir needs no visa, they simply become the lessee for the remaining term. A sale is an assignment of the remaining term. The buyer can be anyone, but the price falls with the remaining term, and below 15 years the market discount reaches 30–40 percent.

Hak Pakai is also inherited, but the heir must meet the holder conditions themselves. If they hold a KITAS or KITAP, the title is re-registered to them. If not, the one-year rule on transfer applies. A sale goes through a sale and purchase deed at a PPAT, and the buyer must be either a foreigner with a KITAS buying above the threshold or an Indonesian citizen, who can convert the title back to Hak Milik. The buyer pool is narrower than for leasehold, but you are selling a title rather than a remaining term, and its value does not melt away with the years the way a lease does.

What happens if the KITAS expires

For a leasehold, nothing. The agreement is signed with a private person, carries no visa conditions, and after you leave you remain the lessee until the end of the term. The villa keeps working under management and payouts keep coming to your account.

For Hak Pakai this is the main risk. If the holder stops meeting the conditions, as a general rule they must transfer the right within one year to someone entitled to hold it. If that does not happen, the state can terminate the title. A year is not nothing, but in a market with a narrow buyer pool it is a sale under time pressure. So before choosing Hak Pakai, answer honestly how many years of KITAS or KITAP grounds you have ahead of you. Which visas give long status in 2026 is covered in the glossary entries on the Second Home Visa and the Golden Visa.

Taxes on purchase, holding and sale

On a leasehold purchase there is no separate buyer's tax. The tax on the lease payment falls on the landowner and is usually already inside the price. On the buyer's side remain the notary at 0.5–1 percent and legal due diligence at $1,000–2,500. A Hak Pakai purchase is a transfer of right, so the buyer pays BPHTB at 5 percent of the taxable base and the seller pays 2.5 percent final PPh. On top come the notary and registration, which by the benchmarks in the article on villa cost adds 6–7 percent to the price.

While holding, PBB on land and building under Hak Pakai is paid by you as the title holder, Rp500,000–3,000,000 a year for a typical villa. Under a leasehold PBB legally stays with the owner unless the contract shifts it to you, so read that clause. Rental income under both forms is taxed at a 10 percent final rate on the gross amount. On the sale of a leasehold a 2.5 percent final tax applies to the assignment amount, on the sale of a Hak Pakai the seller pays the same 2.5 percent and the buyer pays BPHTB again.

Running the numbers

Take a finished two-bedroom villa in Ubud and compare the two forms on the site's data.

Leasehold. The median finished 2BR leasehold villa in Ubud is $220,000 per the DUVI index (Q3 2026). The cost per lease year for 2BR villas in Ubud is $9,270 by the calculation in the lease-term article (September 2026, 2,502 listings). Add the notary and checks, around $3,000–5,000. Entry into a new project is lower, Mirador in Lodtunduh starts at $139,000 for a 72 m² 2BR with a 29+10+30 horizon.

Hak Pakai. The title is priced at freehold level. The median freehold villa in Ubud is $386,000 against $320,000 for leasehold by listings (Balitecture, data from the Ubud district page). BPHTB at 5 percent is about $19,000, notary and registration another $6,000–8,000. Full entry is around $411,000–413,000. Spread over the first 30-year term that is about $13,700 a year against $9,270 for leasehold.

That one-and-a-half-times gap is the price of a title that does not melt. After 20 years a leasehold with 6–9 years left sells at a 30–40 percent discount to a full asset, while a Hak Pakai after extension remains a title in your name and sells close to market. But only to a buyer who qualifies. Which is better depends on whether you sell at all, and to whom.

Sources: the DUVI index (issue 1, Q3 2026), DOMA's article on lease terms (September 2026 data), the Ubud district page (Balitecture, LandLoom), DOMA's article on villa cost (BPHTB, notary and registration rates), PP 18/2021 and the DOMA glossary entry on Hak Pakai.

Who each suits

• Hak Pakai suits a resident with a KITAP or a long KITAS who is buying a home to live in rather than to sell in five years, is ready to pay freehold-level price plus BPHTB, and whose property clears the price threshold. A family that has moved to Bali for the long term, a retiree on an E33F visa with years in hand, a business owner on an investor KITAS.
• Leasehold suits an investor who lives in another country and visits a few times a year, a buyer of an off-plan villa below the Hak Pakai threshold, anyone who wants entry from $139,000 rather than from $400,000, and anyone unsure their resident status will last 30 years.
• You are in between if you hold a KITAS now but your ten-year plans are blurry. In that case a leasehold with a long fixed horizon is safer, because it does not turn into a forced sale when your status changes.

Bottom line. Leasehold and Hak Pakai are two legal ownership forms for a foreigner in Bali, and both beat any nominee scheme, as we wrote in the article on Perda 4/2026 and Coretax. Leasehold is open to everyone, cheaper to enter and per year of use and independent of a visa, but its value declines with the remaining term. Hak Pakai gives a title in your name at BPN with a statutory 30+20+30 term and preserves capital better, but needs a KITAS or KITAP, a property above the threshold and discipline in case you lose status. For an investor who does not live on the island, leasehold is the baseline. For a resident buying a home for the long run, Hak Pakai is worth costing out with a notary. If you want to check your own case, write to us and we will run both options on your property.

This material is for information only and is not legal advice. Hak Pakai price thresholds, tax rates and registration procedures change, verify them with a PPAT notary and an independent lawyer on the date of the deal.