What Is Hak Pakai?

Hak Pakai — literally "right of use" — is a property title under Indonesian land law (UUPA No. 5/1960) that permits foreign nationals to hold legal rights over land or buildings in their own name, without needing an Indonesian nominee or company structure. It is the most direct and transparent route for a foreigner to own property in Bali.

Under the current framework (Government Regulation 18/2021), a foreign national resident in Indonesia can hold Hak Pakai on residential property for an initial term of 30 years, extendable by 20 years, with a further 30-year renewal possible — giving a potential maximum term of 80 years. The property must be used for personal residential purposes, not commercial rental.

Key Conditions and Limitations

  • The buyer must hold a valid Indonesian residency document (KITAS or KITAP).
  • Hak Pakai is restricted to residential use — it cannot be used for commercial property or rental villa operations.
  • The maximum land area is 2,000 m² (20 are) for a single Hak Pakai title.
  • The underlying land must carry Hak Milik (freehold) title or be state land — Hak Pakai cannot be applied over leasehold land.
  • Not all locations are zoned for residential Hak Pakai — a notary (PPAT) must verify zone suitability.

Hak Pakai vs. Other Structures for Foreign Buyers

For buyers who intend to use their Bali property as a rental villa or investment, Hak Pakai is generally not the appropriate structure. Instead, most foreign investors use a leasehold (Hak Sewa) agreement or set up a PMA (foreign-owned company) to hold Hak Guna Bangunan (HGB) title, which does permit commercial use. Anara Property works with trusted Indonesian notaries and property lawyers across Bali to help buyers navigate the right structure for their needs. Contact us for a free introductory consultation.