In Bali you do not buy the land. You buy the right to use, rent out and sell a property over the long term — a leasehold. This is the structure used for Villa Seseh, and in this article we explain how it works. If you understand it, you can assess an offer. If you don’t, you either walk away for no reason or sign something you do not understand.
Freehold and leasehold: two different titles
Indonesian law distinguishes several forms of rights to property. Two of them matter for an investor.
Freehold (hak milik) is full ownership of the land and, by law, is reserved for Indonesian citizens. Structures in which a local nominee formally “owns” the land are not safe — Indonesian courts have repeatedly declared them invalid. Treat any offer of “freehold for foreigners” as a warning sign.
Leasehold (hak sewa) is a long-term lease right to the land and the building, recorded by a notary, transferable and inheritable. You buy the right to use the property, sublet it and sell it for a period agreed in advance. It is not a fixed-term flat rental; it is a property right that can be traded.
For how long
The length of a leasehold always depends on the specific contract. In Bali you will typically see terms of 25 to 35 years, with or without an option to extend. For Villa Seseh the leasehold runs until 30 November 2052, with an extension for a further 30 years. These terms apply to this project — another villa may have different ones, which is why we state them separately for each offer.
The investment maths is simple: at a modelled annual return of 15–18%, the initial investment is recovered in the model in roughly five and a half to seven years, and the leasehold continues after that. The closer you get to the end of the term, the lower the value of the remaining right — which is why the extension matters.
Extension: agreed today, not in thirty years
An extension option only makes sense if its price and procedure are already agreed in the original contract. Wording such as “we will agree at the time of extension” means the landowner of the day will decide the price. For our projects we require the extension option, its price or method of calculation and the deadline for exercising it to be part of the notarial deed.
What to check before signing
- Land title certificate. The lessor must be the actual owner with a clean title, free of encumbrances and disputes.
- Building permit (PBG, formerly IMB). A villa built without a permit, or in breach of it, is a risk that no return can offset.
- Zoning. The plot must lie in a zone where short-term rental is permitted. There are areas in Bali where tourist accommodation is not legal.
- Notarial contract. The contract is prepared and certified by a licensed notary (notaris), not by a real-estate agent.
- Subletting. The contract must explicitly permit letting to third parties; otherwise the investment plan is at risk.
For the villas we offer, this process is handled by our legal team in Bali, and the investor receives the results of the review before signing.
How it works with a share in a villa
With a fractional investment you do not hold the leasehold directly. It is held by the AMANI group’s Indonesian company (PT PMA), which is the contracting party to the leasehold and the operator of the villa. You hold a contractual share in the villa and in its rental income — with the same legal review in the background. For you, this means you do not deal with the Indonesian notarial process, tax registrations or operating licences; these are handled by the company.
A share in a villa, a leasehold and a share in the AMANI Invest company are three different things. An investor in a villa holds a share in a specific property and its returns, not a share in the company. How a fractional investment works step by step is described in our article Fractional property investing.
What happens at the end of the leasehold
If the extension option is exercised, the right continues on the agreed terms. If not, the property reverts to the landowner. When making an investment decision, therefore, take three things into account: the remaining term, the extension terms and the fact that the traded value of a leasehold reflects that term.
Next steps
If you want to see what a leasehold looks like in practice, look at the terms for Villa Seseh: the term, the extension and the holding structure are set out directly with the offer. In a personal projection we will also show you the conservative return scenario.
