How to Finance Your Dream Villa in Bali: Options for Local and Foreign Buyers

A villa purchase within Bali is an ideal investment for many investors, and browsing Bali property for sale listings can be the first step to finding the right option. If you're in search of an exquisite holiday home within Uluwatu or a highly-performing rent-to-own property Bali properties offer an array of exciting possibilities.

However, financing your purchase isn't always straightforward, especially for foreign buyers navigating Indonesia's property rules. This guide explains the options for financing available for both locals as well as international investors, and will help you turn your idea of owning a house in Bali into a reality.

Why Financing a Bali Villa Is Unique

Bali's property market is unique from the other markets.

• Laws on foreign ownership: Non-Indonesian residents can't directly own freehold property (Hak Milik). Instead, they have to use leasehold agreements or create legal structures such as PT PMA (foreign-owned companies).
• Bank restrictions in the local area: A lot of Indonesian banks adhere to strict lending guidelines, making mortgages more difficult for foreign investors.
• Highly sought-after locations: Areas such as Uluwatu, Canggu, and Seminyak have seen price increases. Understanding how to finance your property is essential for ensuring the highest return on investment.

Financing Options for Local Buyers

Local Indonesian buyers can take more simple ways when it comes to funding Bali homes.

A. Conventional Bank Mortgages

• Available through the major Indonesian banks like BCA, Mandiri, and BNI.
• The majority of homes cover 60% to 70% of the value of the property.
• The loan term is between 15 and 20 years.
• Rates of interest: 8% to 10 percent annually (can differ depending on the customer profile and bank).

Ideal for first-time homebuyers or investors seeking to build their own portfolio of Bali real estate.

B. Developer Financing

Certain villa builders in Bali provide direct financing options.

• Lower upfront payment (e.g., 30% down).
• Monthly installments that are flexible and that spread over completion and construction phases.
• Quicker approvals compared to banks.

LeyLines Tips: Make sure you can verify that the company has a proven track record and has clear contract terms prior to signing.

C. Cash Purchases made with Investment Partners

Sharing resources through relatives, friends and investor organizations is a common practice for local buyers.

• Full ownership with no bank involvement.
• Reduces paperwork and eliminates the cost of interest.

Risk Control: Make an official agreement clearly outlining the ownership percentages and strategies for exit.

Financing Options for Foreign Buyers

Buying property in Bali requires meticulous planning in order to be compliant with Indonesian laws, especially for foreign investors.If you buy with LeyLines, we also offer flexible payment plans that make the process easier and more convenient, ensuring you can secure your dream villa without financial stress.
These are some of the more commonly used methods:

A. Leasehold Agreements (Hak Sewa)

The most straightforward and well-known option for foreign investors from abroad.

How it Works:

• The land you lease is for 25-30 years with renewal options.
• You own the villa you constructed on the site.
• Less legal complexity and costs than establishing a company.

Benefits:

• Lower capital requirement for upfront investment.
• Renewable, Renewable leasehold agreements, when drafted by a reputable notary, provide a secure and legally sound option for foreign investors.
• Perfect for those who are focused on rental income.

Example: A lot of luxury villas in Uluwatu Bali are leasehold properties that yield 8-12 percent net return on investment annually from rental.

B. PT PMA Structure (Foreign-Owned Company)

For investors who are serious or who are looking to build multiple properties.

Advantages:

• PT PMA allows you to legally own the Hak Guna Bangunan (Right to Build) title.
• It is easier for managing several properties as well as hiring local employees.
• Facilitates business expansion, such as managing properties or villas for a company.

Considerations:

• More expensive setup costs and annual conformity requirements.
• Legal guidance from a professional is required.
  
  

C. Offshore Financing or Personal Funds

Since Indonesian banks do not lend loans to foreigners, a lot of foreign investors

• Get home equity loans through the country where they reside.
• Make use of your personal savings or invest portfolios.
• Work With international banking institutions in Singapore, Hong Kong, or Australia to lend privately.

Tip: Be sure to verify currency rate and fees for transfer to avoid any hidden charges.

D. Joint Ventures with Local Partners

Certain foreign investors work with trustworthy Indonesian partners.

Structure:

• The local partner is the one who holds the title, and the foreign investor contributes funds and operational assistance.
• Responsibilities and revenues are divided according to an agreement in writing.

A word of caution: Always use an attorney in the creation of a legally binding contract to safeguard both the parties.

Key Costs to Budget Beyond the Purchase Price

If you are financing for your Bali villa, make sure you take into account these additional costs:

Cost Type	Typical Range	Notes
Notary & Legal Fees	1 - 2% of the property value	For contracts, due diligence
Taxes (BPHTB)	5%	Transaction tax
Renovation/Construction	Variable	Depends on design & quality
Property Manag Practical Steps to Secure Financing Step 1: Define Your Budget Include all other costs that are not included in the cost of your property. Step 2: Choose the Right Structure Leasehold Vs PT PMA based on your long-term objectives. Step 3: Get Pre-Approval (Locals) If you have a mortgage, you must obtain the bank's pre-approval. Step 4: Conduct Legal Due Diligence Verify the title to land and zoning by a reputable notary. Step 5: Plan for Currency Transfers Check for the compliance of Indonesian finance regulations. Step 6: Sign and seal by signing an Transparent Agreement It is important to clearly define the responsibilities, payment schedules and the exit clauses. FAQs About Financing a Bali Villa Q1. Can foreigners obtain a mortgage in Bali? A1. The majority of Indonesian banks don't offer mortgages for foreign buyers. Instead, you should use leasehold arrangements, PT PMA structures, or offshore financing. Q2. What ROI will I get from the purchase of a Bali villa? A2. Luxury villas located in prime locations such as Uluwatu typically produce 8-12 annual net ROI of 8-12. Q3. What is the leasehold minimum period for buyers from abroad? A3. Leasehold terms typically range from 25 to 30 years and include renewal options. Your Next Steps Toward Villa Ownership in Bali The process of buying property in Bali and financing your dream home is meticulous, whether you’re a local homeowner using conventional mortgages or a foreign investor navigating Indonesian property laws. When you know the various ways to finance, you will be able to pick the best structure that suits your investment needs. LeyLines offers professional assistance, legal advice and turnkey project administration to help you manage your project smoothly. Are you looking to discover luxurious villas as well as other best Bali locations? Contact us for a personal consultation. ‍ ‍ LATEST NEWS Browse articles Bali Real Estate vs. Other Asian Destinations: The Reasons Investors Choose Bali Posted on:  October 8, 2025 Read more Luxury Villas in Uluwatu Bali: Why the World’s Elite Are Investing Here Posted on:  August 28, 2025 Read more Buying Real Estate in Bali as an Expat: What You Need to Know Posted on:  August 29, 2025 Read more SITEMAP HomeAboutWhy UsProjectsInsights CONTACT BaliHong Kong Begin Your Investment Journey Thank you! Your submission has been received! Oops! Something went wrong while submitting the form. Contact Us Today © 2025 Made with love by LeyLines Limited Stay Connected: