Hak Pakai and Hak Sewa — The Foreigner's Two Legal Options
The two legal residential paths for foreigners. Hak Pakai (25–30 year use right, KITAS/KITAP) and Hak Sewa (lease). Procedure, cost, taxes, and renewal conditions for each.
After foreign land ownership is barred (5.4.1), the two legal residential options are Hak Pakai (HP) and Hak Sewa (Lease). Hak Pakai gives KITAS / KITAP foreigners a 25–30 year use right + renewal; Hak Sewa gives any foreigner a lease (25–30 year agreement). The differences in legal protection, cost, taxes, and operation shape every choice in foreigner villa and hotel projects. The legal foundation for 5–30 years of foreign residence sits on these two options.
A. Hak Pakai (HP) — Use Right
Definition:
- 25–30 year use right + renewal (20–30 years)
- Foreigner KITAS / KITAP holders eligible
- Residential (some business)
- Sertifikat Hak Pakai (SHP) issued
Conditions:
- KITAS Spouse, KITAP
- Pensionado Visa
- Investor KITAS
- Working KITAS (some)
Minimum land area:
- Bali — 200 m² villa land
- Jakarta / Bandung — smaller
- Bali government — minimum area clauses for foreigner villas
Maximum area:
- No official cap; practically — up to 2,000 m² recommended
- Larger — PMA HGB recommended
Pricing terms (2024):
- Bali — minimum market value about Rp 5B (USD $330K) — government protective policy
- Foreigner — safety margin above local prices
Renewal:
- Apply before 25–30 year expiry
- Document renewal, tax payments
- Refusable on Bali-government policy change — risk
- Term — 20–30 years added
Taxes:
- BPHTB (acquisition tax) 5%
- PPh (income tax) 5% — seller
- PBB (property tax) 0.5% annually
- Notary / registration 1–2%
Inheritance:
- Foreigner heirs possible — if they hold KITAS/KITAP
- If not — must sell within 1 year
- Balinese heirs can convert to Hak Milik
Sources: PP 103/2015 · BPN Land Office · The Jakarta Post — Hak Pakai coverage
B. Hak Sewa — Lease Right
Definition:
- Agreed-term lease (usually 25–30 years, renewable)
- Any foreigner — even without KITAS
- Notaris-notarized contract
- 80%+ of foreigner Bali real estate uses this
Structure:
- Lessor — Balinese (holds Hak Milik)
- Lessee — foreigner or foreigner PMA
- Contract — lump-sum or instalment payment
- Buildings / facilities — lessee may build
Term:
- 25–30 year standard
- 50 years + renewal — some (large hotels / resorts)
- 2 + 3 + 5 short — rental (Sewa Tahunan)
- Distinguish Lease vs Rent (short-term rental)
Cost:
- 25-year Hak Sewa = 50–70% of Hak Milik price
- Example — Rp 5B market value land — 25-year Sewa Rp 2.5–3.5B
- Looks expensive — but legally + safety for foreigners
Taxes:
- PPh rental income — 10% (usually lessor pays)
- No BPHTB (not ownership transfer)
- Notarization — 1% of transaction
Renewal:
- Include renewal option at signing
- 25 + 25 = 50 years possible
- Legal residence until 2050+
Risks:
- Lessor's death — dispute with heirs
- Lessor divorce / move / bankruptcy
- Renewal refusal at term end
Prevention:
- Notaris registration, BPN notification
- Lessor family consent forms
- Adat (Klian Banjar) acknowledgement
- Foreigner-lawyer review
Sources: Indonesian land law · Bali Post — Hak Sewa guide
C. Hak Pakai vs Hak Sewa — Comparison
| Item | Hak Pakai | Hak Sewa |
|---|---|---|
| Legal nature | Use right (closer to ownership) | Lease right |
| Requirement | KITAS / KITAP required | Visa not required |
| Term | 25–30 years + renewal | Agreed (25–30 standard) |
| Cost | 70–80% of Hak Milik | 50–70% of Hak Milik |
| Construction / alteration | Free | Lessor consent |
| Sale | Possible (as Hak Pakai) | Transfer (lessor consent) |
| Inheritance | KITAS heir within 1 year | Transferable |
| Taxes | BPHTB · PBB · PPh | PPh (income) |
| Certificate | SHP (government issued) | Notaris contract |
| Dispute risk | Low (government certified) | Medium (contract-dependent) |
When to use which?
Hak Pakai recommended:
- Long-term residence (10+ years)
- Holds KITAS / KITAP
- Need to build / alter freely
- Possible child inheritance
- Sufficient budget
Hak Sewa recommended:
- 5–25 year residence
- Visa may change
- Building / facility self-operating
- Budget-constrained
- Flexibility-first
Sources: Bali Discovery — foreigner real-estate guide · The Jakarta Post — Hak Pakai vs Hak Sewa
D. PMA + HGB — The Business Option
Real estate via a foreigner company (PMA) — a separate option.
Hak Guna Bangunan (HGB):
- 30 + 20 + 30 = max 80 years
- Construction / commercial / residential
- Possible under PMA company
- Many Bali hotels, restaurants, business sites
Conditions:
- PMA company setup (5.6.2)
- Min capital Rp 10B (USD $670K)
- Business licenses (NIB, SIUP)
- Bali government zoning permits
Cost — PMA setup:
- Notaris / BKPM registration — Rp 20–50M
- Min capital Rp 10B (paper declaration)
- Annual accounting / tax filing — Rp 30–60M/year
Example:
- Foreigner runs a Bali cafe
- Set up PMA → buy HGB land → build → operate
- Some residential use possible (mixed use)
HGB advantages:
- Use up to 80 years
- Business + residential mix
- Foreigner-company title — stable
Disadvantages:
- Higher PMA-setup cost
- Annual accounting duty
- Overkill for pure residence
Sources: BKPM (Investment Coordinating Board) · Indonesia Investment Coordinating Board
E. The Foreigner's View — Procedure, Cost, Mistakes
Hak Pakai procedure:
- Engage a Notaris
- Check land — original SHM, BPN registration
- Check Adat — Klian Banjar
- Contract — Notaris notarized
- Pay taxes — BPHTB 5%
- BPN registration / SHP issuance — 2–6 months
- Mecaru rite
- Annual PBB payment
Hak Sewa procedure:
- Engage Notaris / lawyer
- Verify lessor identity / SHM
- Contract — term, amount, renewal
- Notaris notarized
- Taxes — PPh 10% (typically lessor)
- Adat — Klian acknowledgement
- Mecaru
- Annual tax filing
Common mistakes:
1. No Notaris
- Direct contract with Balinese lessor
- Weak legal protection
- Notaris essential
2. Skipping SHM verification
- Fake SHM scam
- Verify BPN original
3. Ignoring Adat
- Proceeding without Klian Banjar acknowledgement
- Weak in later disputes
4. Skipping Mecaru
- Skipping Balinese purification rite
- Discontent with neighbors / Banjar
5. English-only contract
- Bahasa Indonesia original essential
- English is reference / translation
Total cost (Hak Pakai):
- Market value Rp 5B villa land
- Hak Pakai — Rp 3.5–4B
- Taxes / Notaris / lawyer — Rp 700M–1B
- Construction / interior — separate
- Adat / Mecaru — Rp 50–200M
- Total — Rp 5–6B (USD $330–400K)
The Notaris's Role in Bali Real Estate — Indonesia's Notaris (notary) is the pillar of legal trust in Bali real estate. Foreigners contracting directly without a Notaris have almost no dispute protection. Many English-fluent Notaris operate in Ubud, Sanur, Seminyak. Fees of 1–2% of the transaction act as foreigner real-estate insurance. Choosing the Notaris matters more than choosing the property. Foreign residents trade Notaris recommendations — a core resource for Bali real-estate adaptation.
Quick Summary
| Item | Hak Pakai | Hak Sewa |
|---|---|---|
| Requirement | KITAS / KITAP | No visa |
| Term | 25–30 yr + renewal | 25–30 yr agreed |
| Legal strength | Government SHP | Notaris contract |
| Cost | 70–80% of Hak Milik | 50–70% of Hak Milik |
| Taxes | BPHTB 5% + PBB | PPh 10% (lessor) |
| Construction | Free | Lessor consent |
| Inheritance | KITAS children within 1 year | Transferable |
| Dispute risk | Low | Medium |
| Recommended for | Long-term · KITAS | Short / mid-term · flexible |
Sources / References
- Wiki — Land tenure in Indonesia · Property law
- Official — PP 103/2015 (foreigner property) · UU 25/2007 (Investment) · UU 5/1960 (BAL) · Kementerian ATR/BPN · BKPM
- News — The Jakarta Post — Hak Pakai / Hak Sewa coverage · Bali Post — real-estate guide · Tempo — foreigner property disputes · Bali Discovery — foreigner guide
- Academic — Slaats H., Adat Law and Indonesia (Routledge, 2018); Vickers A., Bali: A Paradise Created (2012); Hauser-Schäublin B., Traditional Indonesian Polities (Routledge, 2013)
