Start with a call.
Usually within one business day
The terms, plainly
Each one is used loosely by people with an interest in it being used loosely. Here is what each actually means, and the single question we put to the developer about it.
Average daily rate: room revenue divided by the number of nights sold. It is an achieved figure, not an asking one, and it says nothing at all about unsold nights – which is why a villa can post a strong ADR and a weak business in the same year.
AirROI puts the average daily rate across Canggu's active Airbnb listings at USD 214 for the twelve months to July 2026. That is a market average across roughly 3,900 listings, not a target for any particular villa.
Two questions decide whether an ADR you are shown means anything. Over how many nights was it earned, and is it before or after the booking platform's commission? A rate quoted gross of platform commission is 15 per cent or so higher than the money that reaches the account, and nobody volunteers which one they are quoting.
Akta Jual Beli, the deed of sale and purchase. It is the instrument that transfers a registered land right from one holder to the next, and it is executed in front of a PPAT, the land deed official. Until the AJB is signed and the transfer registered, ownership has not moved, whatever the earlier agreements say.
The sequence on off-plan is PPJB first, AJB at completion. Between them sit the staged payments, the build, and the acquisition duty – BPHTB has to be settled before the deed can be executed.
It only exists where there is a title to transfer. A PT PMA acquiring HGB signs an AJB. A foreign individual acquiring Hak Pakai signs an AJB. A leaseholder does not: a lease creates a contractual right, not a registered title, and it is documented by a notarial lease deed instead. That difference is why a lease attracts no BPHTB, and it is also why a lease has no entry in the land register standing behind it.
Bea Perolehan Hak atas Tanah dan Bangunan, the duty on acquiring a right over land and buildings. Five per cent of the acquisition value, paid by the buyer, settled before the deed can be executed. A tax-free threshold is deducted and is set regionally, so the same price produces a different bill in different regencies.
It applies to an acquisition of title – HGB through a PT PMA, or Hak Pakai. A lease acquires no title and does not attract it. That is a genuine five per cent difference between the routes, and it is not always spelled out in leasehold marketing.
The amount you put aside each year against replacing what short-stay use destroys: mattresses, sofas, outdoor furniture, air-conditioning units, pool equipment, linen stock, the pool surface. It is not maintenance. Maintenance keeps a thing working; this replaces it when it stops being worth keeping.
Weekly guest turnover in a hot, humid, salt-laden climate is hard on everything, and the bill does not arrive evenly. It arrives in the year the villa stops photographing well and the rate starts slipping, which is also the year an unreserved owner discovers they are funding a refurbishment out of income.
We publish no benchmark reserve rate. We have not found a dataset of actual refurbishment spend on Bali villas that we could open and cite, and a percentage invented for the look of the thing would be worse than this sentence. Ask the operator or developer what they have really spent on their oldest unit instead.
In our yield calculator, put the reserve into the fixed annual charges rather than the percentage running costs. It is a figure you set, not one occupancy sets, and putting it there raises the break-even occupancy the model reports – which is the honest effect of promising yourself you will pay for a new roof one day.
The window after handover in which the builder must put defects right, and the retention held back until they have been. In a private purchase it is whatever your contract says. There is no default period to fall back on.
That is worth saying plainly, because a much longer number circulates and it is a different thing. Indonesian construction law makes the service provider liable for building failure for the period matching the design life of the works, capped at ten years from final handover where the design life is longer. But building failure means collapse, or a building that has ceased to function, determined by an expert assessor appointed by the Minister. That is a structural remedy of last resort, not a snagging list, and it runs between the parties to the construction contract – normally the developer and its contractor, not the developer and you.
So your contract with the developer is what gives you a snagging right, and it has to be negotiated before signature, not requested at handover when the leverage has gone. Five to ten per cent held until the list is closed is a reasonable retention. Released at handover, it is not a retention at all.
The window between reserving a unit and committing money you cannot recover, during which the paperwork is checked. Two to four weeks is normal. It is a market convention, not a legal right – nothing in Indonesian law gives a private buyer a diligence period, so if you want one it has to be a term of your reservation.
Four things are checked and they are routinely collapsed into one: the land certificate, including whether the boundaries match the plot you were shown; the zoning letter for that specific plot rather than the area; the PBG for the specific design on that plot; and the seller's capacity to sign, which on family-owned land can mean several signatures.
Do not confuse it with the seven working days a buyer may spend studying a PPJB before signing. That is a reading window for a contract. This is an investigation into an asset, it takes longer, and it comes first.
The sequencing rule is the whole value of the term. No non-refundable money falls due until diligence has closed.
Rental income divided by purchase price, before anything is deducted. Bali marketing quotes 12 to 20 per cent routinely.
Net of operator commission (15-25%), service charge, tax (10% final on gross rent, or corporate tax where the property is run as an accommodation business), maintenance, and realistic occupancy, the same property lands somewhere between 4 and 8 per cent. That is a decent return. It is not the number on the brochure.
You cannot hold Indonesian freehold as a foreigner. What you can do is set up a PT PMA – a foreign-owned Indonesian company – and have that company hold Hak Guna Bangunan, the right to build on and own the structure. HGB runs 30 years, extendable 20, then renewable 30. Eighty years in total if every extension is granted.
It is the strongest position available to a foreign buyer and it is what the serious developments use. It costs more to set up than a lease – budget around USD 4,000 to 6,000 and six to ten weeks – and it carries monthly tax filings, annual accounts and a quarterly investment report for as long as you hold it.
On capital, check the current figure rather than the guides. BKPM Regulation No. 5 of 2025 cut the minimum paid-up capital for a PT PMA from IDR 10 billion to IDR 2.5 billion. The separate requirement that total investment value exceed IDR 10 billion per business line per location, excluding land and buildings, is a different test and is constantly confused with it. Almost everything written online still quotes the old paid-up figure.
A right of use held directly by a foreign individual with a residence permit, running 30 years, extendable 20, renewable 30. No company needed.
Rarely used for investment because it is tied to your residency and it restricts renting out. Good if you are actually moving to Bali, awkward if you are not.
Koefisien Dasar Bangunan and Koefisien Lantai Bangunan – the building coverage coefficient and the floor area coefficient. KDB caps the share of the plot the building footprint may occupy. KLB caps total floor area across all storeys as a multiple of the plot area.
They are not fine print. They are the arithmetic that decides whether the development you are being shown fits on the land it is being built on, and they appear on the face of the spatial-conformity approval: both are among the minimum contents a KKPR must state under Government Regulation 21 of 2021.
The check takes a minute. Plot area times KDB gives the maximum footprint; plot area times KLB gives the maximum total floor area. Compare those with the site plan and the schedule of unit sizes. In Bali the constraint usually bites through KDB rather than KLB, because the 15-metre height limit already caps the number of storeys, and a scheme that needs more footprint than the coefficient allows has to either shrink or seek a change it may not get.
Kartu Izin Tinggal Tetap, the permanent stay permit. Five years, renewable, and far less administrative friction than a run of KITAS renewals. Generally reached after several consecutive years on a qualifying KITAS, with a shorter route for the foreign spouse of an Indonesian citizen.
For property it is the difference between Hak Pakai being viable and Hak Pakai being comfortable: the title stops depending on a permit you are re-applying for every year or two.
Kartu Izin Tinggal Terbatas, the limited stay permit. Issued for a stated purpose – employment, investment, a spouse, retirement, study – for a term that typically runs six months to two years, renewable. The permit belongs to the purpose and to the sponsor: end the sponsorship and the permit ends with it.
It matters here for one reason. A foreign individual may hold Hak Pakai only while they hold a valid Indonesian residence permit, and a KITAS is the usual one. It also carries a tax consequence: combined with presence of more than 183 days in a twelve-month period it makes you an Indonesian tax resident, which brings worldwide income into scope.
Lahan Sawah Dilindungi, protected paddy land. It is a national map of rice fields whose coordinates are locked against conversion, and it sits on top of the ordinary zoning question: a plot can be correctly zoned, correctly certificated and still be unbuildable because it is on this map.
The rule was rewritten in 2026. Presidential Regulation 4 of 2026 came into force on 2 April 2026 and revoked the 2019 regulation that most published guidance still quotes. Under the new rule, land inside the protected map that has not yet been written into the local spatial plan as sustainable food agricultural land cannot be converted without a land-use-change recommendation from the minister responsible for land and spatial planning. That is a national-level decision, not a regency one, and it is not routine.
It matters in Bali more than almost anywhere else, because the rice terrace is the product. Ubud, Tabanan, inland Pererenan and the Subak landscapes that hold UNESCO status are precisely where paddy and premium land values overlap. A development that sells the view of a rice field is often sitting on the edge of a plot that is on the map.
Transferring your remaining leasehold interest to a new lessee. It is how a Bali leasehold is sold, and it is not a sale of land, because a lease conveys no title to sell.
The mechanics follow from one fact. A lease is not a registered right. Pasal 9(1) of PP 24/1997 lists what the land office actually registers – hak milik, hak guna usaha, hak guna bangunan, hak pakai, hak pengelolaan land, wakaf land, strata title, hak tanggungan and state land – and hak sewa is not on the list. Your interest lives in a notarial deed, not on the certificate. So does your buyer's.
The landowner is therefore a party to your exit. Article 1559 of the civil code provides that a lessee who has not been given permission may neither sub-let the property nor assign the lease to another, with cancellation of the lease and damages as the consequence. If the original deed does not grant that permission and fix what the owner may charge for it, you will be negotiating for it at the worst possible moment.
Two further clauses decide what you are actually able to sell. Whether the extension option runs to your successors or is personal to you, because if it is personal you are selling a shorter lease than you bought. And whether the landowner's heirs are bound, since a thirty-year lease will usually outlive the person who granted it.
How an assignment is taxed is not settled as far as we can establish. UUPA Pasal 16 does list hak sewa among the rights over land, which suggests the final tax on transfers of land and buildings reaches it, but there is no registered right and therefore no land deed official to withhold at, and we found no ruling from the tax authority on the point. Get the answer from your notary in writing before you agree a price.
You lease the land from an Indonesian owner for a fixed term – usually 25 or 30 years – with an extension written into the contract. Cheaper and faster than a PT PMA, and you can be on a beach in a fortnight.
The weakness is the extension. It is a contractual promise from a person, not a right from the state, and its value depends entirely on who that person is and whether their heirs honour it.
A memorandum of understanding is whatever the parties wrote. Indonesian law gives the label no special status: it does not make a document non-binding, and it does not make it binding either. Whether a clause creates an obligation turns on the ordinary requirements for a valid agreement, not on the word at the top.
That catches people both ways. One buyer signs believing it is a placeholder and meets a forfeiture clause with teeth. Another signs believing it locks the price, and finds the only clause drafted carefully was the one about their money.
In Bali off-plan it is common practice – practice, not a rule – to take a reservation under an MOU months before any PPJB exists. Compare the two. A PPJB must be signed before a notary, and the buyer has at least seven working days to study it first. An MOU has neither protection, and is usually signed the same afternoon it is produced.
Treat it as a contract, because it may be one. Read the money clauses first.
What the operator charges to run the letting: pricing, listings, guest handling, housekeeping supervision, maintenance coordination and remittance. Bali operators charge 15 to 25 per cent of gross, and a good one earns it.
The percentage is the part everyone negotiates and the base is the part that matters. A 20 per cent fee charged on gross booking value takes USD 20 from a USD 100 booking. The same 20 per cent charged on what reaches the account after a 15.5 per cent platform commission takes USD 16.90. Run both through the full cost stack and the first leaves USD 45.91 before fixed costs where the second leaves USD 49.01 – three points of net, on one clause of one sentence.
If your fee is charged on gross booking value and you want to model it in our yield calculator, which works from a nightly rate already net of platform commission, gross the fee up: 20 per cent of booking value is 23.7 per cent of what survives the platform.
Then find out what sits outside the fee. Linen, consumables, utilities, minor repairs, listing photography and paid placement are all charged separately by some operators and absorbed by others, and a 15 per cent fee with everything invoiced on top is more expensive than a 22 per cent fee with nothing.
Nilai Jual Objek Pajak, the assessed sale value of a property. It is set by the regency or city government, published annually, and it is the base for the annual land and building tax.
It also functions as a floor. The buyer's acquisition duty is charged on the acquisition value – normally the transaction price – but where that value is not known, or is lower than the NJOP for the year in which the acquisition happens, the NJOP is used instead. Declaring a lower price on the deed therefore does not reduce the bill below the assessment, and it creates a second problem: an understated deed value is the value you will be arguing from when you come to sell.
For a foreign buyer, NJOP is most useful as a sanity check rather than a tax input. It is a published government number for the same land, from the same year, in the same regency, and in a market with no sold-price data at all, that is one of the very few external reference points available.
Net income divided by what you paid for the property. The number a brochure does not print.
Our calculator defines the numerator as gross rent less the operator's commission, less running costs, less tax charged on gross rent, less the fixed annual charges owed whether or not anyone stays. It stops there. It does not deduct finance costs, because a yield is a property of the asset and a mortgage is a property of the buyer, and mixing them makes two properties incomparable. It does not deduct the tax your own country will charge you on the income once it arrives.
The denominator is where the number is most often quietly improved. Net yield should be calculated on the all-in acquisition cost – price plus acquisition duty, notary fees, company formation if you incorporated, and the furniture package without which the villa cannot be let – not on the headline price. On a purchase where those add ten per cent, using the headline price flatters the yield by about a tenth of itself.
The second fudge is subtraction by omission. A net yield with no replacement capital reserve in it is a net yield for a villa that is never refurnished, which is not a villa anyone would buy.
An Indonesian notary (PPAT) holds staged payments and releases them against verified construction milestones rather than the developer's say-so.
It is not universal in Bali. Plenty of developments take payment directly, which means your money funds the build and you are an unsecured creditor if it stops.
The share of a booking taken by the platform that produced it – Airbnb, Booking.com, Agoda, Vrbo. It comes off before the manager's fee, before running costs and before tax, which makes it the first and largest single deduction in most cost stacks.
Airbnb publishes two structures. Under the split fee the host pays 3 per cent and the guest pays a further 14.1 to 16.5 per cent of the booking subtotal. Under the single fee the host pays it all: 15.5 per cent for most hosts, 14 to 16 per cent for the rest. The single fee is not a choice for everyone – Airbnb requires it of hotels, serviced apartments and any host connected through property management software, which is how a professional Bali operator runs a portfolio. If your villa sits on a channel manager, model 15.5 per cent, not 3.
We have not verified a Booking.com or Agoda commission rate for Indonesia. Their partner documentation refuses automated access and we will not publish a figure we have not read. Get it from your operator, in writing, with the channel mix beside it.
The share of nights the property was let. Booked nights divided by nights available – and everything turns on how "available" is counted. Divide by 365 and an owner's own three weeks in August drag the number down. Divide by nights the calendar was actually open and they do not.
Our yield calculator divides by 365, flat. That is a choice, and it is the conservative one: a night you spend in your own villa earns nothing, and a model that hides owner use inside the denominator will tell you the property is performing when it is not.
Aggregators publish an occupancy figure without publishing the denominator behind it. AirROI records median occupancy of 36 per cent across active Canggu Airbnb listings for the twelve months to July 2026, with the top quartile above 62 per cent, the top decile above 80 per cent and the bottom quartile at 18 per cent. It does not define how it counts an available night, so treat the level as indicative and the spread as the useful part. When a brochure quotes 80 per cent, it is quoting the top tenth of the market as the expected case.
Persetujuan Bangunan Gedung, which replaced the old IMB in 2021. It is the approval to construct, issued against a specific design on a specific plot.
An off-plan development without a PBG is selling you an intention. It usually arrives, but 'usually' is doing a lot of work in that sentence.
Persetujuan Kesesuaian Kegiatan Pemanfaatan Ruang, the spatial-conformity approval. It is the state's finding that a named activity, at named coordinates, matches the applicable spatial plan. Under Government Regulation 21 of 2021 it replaced the old location permit, and it is obtained through OSS, the national online business licensing system.
There are two forms and the difference is worth knowing, because it tells you how much scrutiny the plot has actually had. Where a detailed spatial plan – an RDTR – exists for the location and is integrated into OSS, the applicant gets a confirmation, KKKPR, issued within one working day. Where no such plan exists, they get an approval, PKKPR, which takes up to twenty working days because the application has to be assessed against the higher-level plans and against a technical land opinion from the local land office. Much of Bali outside the established urban areas falls into the second category.
The document states at minimum the location, the type of allocation, the building coverage and floor area coefficients, and the conditions attached. It is valid for three years from issue. That is a shorter window than most Bali build programmes, and an expired KKPR on a scheme that has not broken ground is a question, not a formality.
Pejabat Pembuat Akta Tanah, the land deed official. A PPAT is authorised to draw up the deeds that create, transfer or encumber registered land rights, and a transfer that is not evidenced by a PPAT deed cannot be registered. In practice the same person is usually also a notaris, a civil law notary, and the two roles are used interchangeably in conversation even though they are distinct appointments with distinct powers.
For a foreign buyer, the PPAT does the work a conveyancing solicitor does elsewhere: verifies the certificate against the land register, checks encumbrances, drafts the deed, collects the acquisition duty and lodges the registration. Their territorial jurisdiction is limited, so a PPAT appointed for one regency cannot execute a deed over land in another.
They are meant to be neutral. The one introduced by the developer has an ongoing commercial relationship with the developer, and you do not.
Perjanjian Pengikatan Jual Beli, the binding preliminary sale and purchase agreement. It is what a developer signs when there is no completed building and therefore no deed yet. In Indonesian housing law it is the second of two stages: marketing first, then the PPJB.
The conditions on it are the useful part, because they are a specification a developer either meets or does not. A PPJB may only be signed once there is certainty of land ownership status, of the matters agreed, the PBG, availability of infrastructure and utilities, and at least 20 per cent built. For houses that is 20 per cent of the planned units plus infrastructure; for a strata block, 20 per cent of construction volume. It is evidenced by the supervising or construction management consultant, not by the developer.
Three more provisions are worth knowing by heart. You may study the agreement for at least seven working days before signing. It must be signed before a notary. And the developer may not collect more than 80 per cent of the price until those conditions are met.
Whether that regime binds a foreigner buying a leasehold villa is not settled, and we could not find authority either way. It is still the right benchmark to hold a contract against.
Pajak Penghasilan – income tax – has a set of final regimes that charge a flat rate on a gross amount and discharge the liability on that income entirely. Two of them matter to a foreign buyer. Rental of land and buildings attracts ten per cent on gross rent. The sale of land and buildings attracts two and a half per cent of the transaction value, payable by the seller, under the standard regime.
Final on gross is the part that catches people. It does not shrink when your operator takes a larger cut, or when the service charge rises, or in a bad year. It is a tenth off the top line before any of your costs are counted, which is a large part of why brochure yields and achieved yields diverge as much as they do.
The capital a PT PMA must actually issue and pay in, as opposed to the investment it must plan to make. BKPM Regulation No. 5 of 2025 cut the minimum from IDR 10 billion to IDR 2.5 billion. Most guides written before 2025 – which is most guides – still quote the old figure.
It is routinely confused with a separate test: that total investment value should exceed IDR 10 billion per business line per project location, excluding land and buildings. Those are two different numbers doing two different jobs, and conflating them is how a foreign buyer talks themselves out of the strongest structure available to them.
Paid-up capital is not a cost. It sits inside your company and remains yours. It is, however, cash you have committed and cannot spend, which is a real consideration on a smaller purchase.
The licence that makes short-stay rental legal. Without it you are letting illegally, which is common, tolerated until it isn't, and uninsurable.
It attaches to the property and the zoning, not to you – so it is either obtainable on that plot or it is not, and no amount of paperwork changes that.
The first payment, usually modest, taking a unit off the market for two to four weeks while diligence runs. It is not the deposit: that comes later, is typically ten per cent, and is usually not refundable.
It is the cheapest test you will run on a developer, because one question settles a lot. On exactly what conditions do I get this back? A developer who puts that in the document has a process. One who says it is normally refundable, without writing it down, has told you what normally is doing in that sentence.
For a benchmark, Indonesian housing law says this of a regulated sale. A developer taking money before the PPJB must disclose the construction schedule, the PPJB date and the handover date. If it misses them the buyer may cancel and everything is returned. If the buyer walks away for reasons that are not the developer's fault, the developer may deduct at least 20 per cent – a floor, not a ceiling. Refunds are due within 30 calendar days, with a daily penalty after that.
Then ask who holds the money. A fee in the developer's operating account is working capital, and you are an unsecured creditor for it.
The number of years still to run on a lease today, as opposed to the term it was written for. It is the number that prices a Bali leasehold, and it moves the price more than condition, furniture or view.
It does not decline in a straight line. What a buyer is paying for is the present worth of the years they will get, so the years nearest to hand carry most of the value and the far ones very little. Our lease decay tool at /guides/lease-decay models that as an annuity. At its 7% default, a thirty-year lease retains about 94% of its original value with twenty-five years left, 85% with twenty, 73% with fifteen, 57% with ten and 33% with five.
The useful reading is the gap between those, not the levels. The year that takes a lease from thirty to twenty-nine costs about 1% of value. The year that takes it from ten to nine costs about 4%. Decay accelerates exactly when a seller needs it not to, which is why the residual term you buy matters more than the term the lease was written for.
The same arithmetic prices an extension. Extending from thirty years to fifty adds about 11% to today's value at 7%. Twenty extra years is two thirds more lease and about a ninth more money, because those years are twenty to fifty years away. Anyone pricing an extension as though the added years were worth what the first ones were is asking you to pay for time at the wrong end of the curve.
That is a model, not a valuation. There is no published Bali sold-price series to calibrate it against, and where an extension is described as available but its price is not stated, we render no uplift at all – an unpriced option is not an asset.
Revenue per available rental: the average daily rate multiplied by the occupancy rate. It answers the question ADR and occupancy each dodge on their own – what did the property earn per night of the year, whether or not anyone was in it.
It is the honest headline for a letting business, and it is the one figure a weak operator will not lead with. A high rate at low occupancy and a low rate at high occupancy can produce the same RevPAR, and only one of those is a pricing problem you can fix.
AirROI reports Canggu RevPAR at USD 79 for the twelve months to July 2026, against an average daily rate of USD 214 and occupancy of 36.2 per cent. Note that those two multiply to USD 77, not USD 79 – a small gap, but AirROI publishes no methodology that explains it, and it is a reminder that aggregator metrics are not always computed over the same base as each other.
Sertifikat Hak Milik, the certificate evidencing Hak Milik – the strongest right in Indonesian land law, with no term and no expiry. It is what people mean by Indonesian freehold.
Only Indonesian citizens may hold it. That is not a technicality that structuring gets around: a transaction whose purpose is to pass Hak Milik to a foreign national, directly or indirectly, is void by operation of law under the Basic Agrarian Law, and the land can fall to the state. The buyer is not left with a weaker right. They are left with nothing.
This matters to a foreign off-plan buyer for one reason. You will never hold SHM, but the land under your development almost certainly sits on one, and whose name is on it decides how solid the chain above it is. HGB granted by a PT PMA over its own land is one position. HGB granted over someone else's Hak Milik is another, weaker one, because it depends on the certificate holder. A twenty-five year lease from an Indonesian family is a third. Ask which one you are in, and ask to see the certificate rather than a summary of it.
The strip of land running inland from the shoreline that is reserved from building. Nationally it is at least 100 metres measured from the highest tide line landward, under Presidential Regulation 51 of 2016. Regional governments set the actual line for their own coast, taking account of topography, coastal physical conditions, tsunami and erosion risk, ecosystems, public access and drainage – and the line they set can be wider than the national floor, not narrower.
In the spatial plan it appears as a protection zone, which is a different colour and a different rule set from the tourism and residential zones next to it. Building inside it is not a matter of getting a variance.
The practical consequence for a beachfront development is that the setback eats the most valuable part of the site. A scheme that shows villas at the sand either has an adopted setback line that permits it, has an older permission, or has a problem. Ask which.
Bali's spatial plan designates land as tourism, residential, agricultural or green belt. Only tourism zoning permits commercial short-stay accommodation.
Enforcement has historically been light and is tightening. Buildings have been demolished. This is the single most-ignored risk in the market.
Indonesian spatial plans are published as coloured maps, and the colours are not decorative or local. They are set nationally by Regulation of the Minister of Agrarian Affairs and Spatial Planning No. 14 of 2021, which fixes a code and an exact colour for every zone.
At detailed plan level – the RDTR, which is the scale that governs an individual plot – the ones a buyer meets are these.
Two cautions. The provincial-level plan uses a different palette for the same broad categories, so a colour read off an RTRW map does not mean the same thing as the same colour on an RDTR map. And a colour is a plan, not a permission. The document that says your specific plot may carry your specific use is the KKPR.