Buying an off-plan villa in Bali: what the law requires before you sign

Off-plan villas are sold in Bali on renderings and payment schedules, often with most of the price paid before a roof exists. Indonesian housing law has a specific system for that: what a developer must hold before marketing, what must exist before the pre-sale agreement, how much can be collected, and what happens when either side walks away. The Ministry of Public Works regulation most guides still cite was revoked in 2021; the rules now sit in PP 12/2021.

Seven words in an off-plan purchase

The terms in the regulation and in the deed.

Stage 1: before the developer may market

PP 12/2021 Pasal 22C requires the developer to hold, at minimum, zoning certainty, land title, the house's status, a PBG and a construction guarantee. The permit is proved by the PBG letter; the guarantee by a support letter from a bank or non-bank institution.

What the marketing must say

Pasal 22D lists what marketing must state: the zoning letter number, the land certificate number, the support letter, the developer's identity, the number and date of the PBG, the site plan, specifications and floor plan, the sale price, and the promised infrastructure. A brochure with renderings and no PBG number is missing what the regulation requires. What a PBG is.

The schedules

A developer that takes payments during marketing must disclose the build, PPJB, and deed-and-handover schedules (Pasal 22F), and those payments count toward the price. There is no statutory deadline from PPJB to sale deed; the disclosed schedule is the yardstick for lateness.

Stage 2: the PPJB

The five conditions

UU 1/2011 Pasal 42(2), as amended in 2023, allows a PPJB only after certainty of land status, what is agreed, the PBG, infrastructure, and 20% built. The Elucidation spells out “what is agreed” — location, plot, form, specification, price, infrastructure, handover time and dispute settlement — and measures the 20% across all units of the planned estate.

At signing

The PPJB is made before a notary, and the buyer may study the draft for at least 7 working days first (Pasal 22K). At signing, the land certificate shown and a certified PBG copy handed over (Pasal 22I); infrastructure means at least roads and drainage built, and the 20% must be certified by a supervision or construction-management consultant.

What the PPJB must contain

Pasal 22J requires eleven items, from guarantees and handover to cancellation and disputes: identities, the object, price and payment method, the developer's guarantee, rights and obligations, handover time, maintenance, use, assignment, cancellation and dispute settlement. The regulation's annex adds the parties' nationality, maintenance of at least 3 months after handover at the developer's cost, and that assigning the PPJB before the deed needs the developer's written consent before a notary.

The money: how much, and when it comes back

A developer may draw no more than 80% of the price before the PPJB requirements are met (Pasal 22L(1)). Cancellation runs by stage and by fault.

Pasal 22H(3) says the developer may deduct “paling rendah 20%” — literally “at the lowest” 20% — when the buyer cancels without developer fault; we show 20%. After the PPJB, a buyer at fault who has paid 10% or less loses it; above that, the developer may deduct 10% of the transaction price (Pasal 22L(3)-(4)).

Stage 3: the sale deed, title and foreign buyers

The deed

The PPJB does not transfer the land. A sale can be registered only with a deed made by an authorized PPAT (PP 24/1997 Pasal 37(1)); the exception for a non-PPAT deed is for Indonesian citizens. At the deed the taxes are paid first — the seller's 2.5% and the buyer's BPHTB. Taxes on a transfer. Checking the land data.

A foreigner buying the house

A foreigner with an immigration document may own a house on hak pakai (PP 18/2021 Pasal 69, 71). The land ministry's rule allows new or existing houses, bought by sale, gift, exchange or auction, in the luxury category, one plot per person or family, at most 2,000 m² (Permen ATR/BPN 18/2021 Pasal 186). Pasal 187(3) has a freehold or HGB plot bought by a foreigner changed to hak pakai; but in 2025 Permen ATR/BPN 2/2025 revoked the 2021 provisions on changing hak milik into HGB or hak pakai, except at auction, so on freehold land that step no longer runs as written — PP 18/2021 itself also allows hak pakai over hak milik by PPAT deed (Pasal 71). How a change of right runs since 2025. The PPJB rules define parties as individuals or legal entities with no nationality limit, and the annex asks for nationality; that a foreigner can sign a PPJB is our reading, not a sentence in the regulation. Hak pakai and the stay permit.

An off-plan leasehold

Most off-plan villas offered to foreigners are leaseholds. The PPJB system is written for the sale of a house by a developer in a housing estate; a lease is a different contract, and we found nothing applying the 80% cap or the refund rules to it. Whatever protects a leasehold buyer — staged payments, a completion date, a refund clause — has to be written into the lease. Leasehold explained.

What this page does not cover

• Whether a single villa by a small builder counts as a housing estate. Not established.
• Apartments, which have their own strata rules.
• Any developer or project. We read rules, not offers. How to check a developer.

Common questions