Know the Difference Freehold and Leasehold

Freehold Versus Leasehold: What Is The Difference?

February 8, 2022 | Buyers

Want to have your very own piece of property, villa, or land here in Bali? Well, let’s make this happen for you in 2022!

You will have a couple of options, whether you wish to rent monthly, yearly, long-term, or buy Bali Property. Before you make your decision, you’ll need to understand the different property types and real estate options that are available to both foreigners and locals here in Indonesia.

The most important would be the status of the property; is it freehold, or leasehold?

Today, we’re going to discuss the difference between Freehold property and Leasehold property. Let’s take a look:

Freehold

Simply put, with freehold, you own the property and land. Everything including the deed and title will be transferred to your name.

Unfortunately, foreigners cannot own freehold property here in Indonesia. This status is reserved for Indonesians, who will have absolutely no limitations as long as everything is in accordance with Indonesian property laws.

If you’re a foreigner attempting to own a freehold property, you will be breaking the law. The property will be seized by the Indonesian government and your ownership status deemed null and void.

Leasehold

As mentioned above, the leasehold status lets you “own” the property within a fixed period of time whether 25 years or even 70 years. This does not include the land that the property stands on.

Depending on your agreement with the owner, payments can either be made annually, or you can make full payments upfront to cover the entire duration of the lease.

Once the lease has expired, you can either negotiate to renew the lease or the property will be returned to the rightful owner and reverted back to its freehold status.

We hope the above was helpful! If you’re looking to buy or sell property here in Bali, you can always refer to Bali Property Direct, we are an innovative online property platform that connects buyers and sellers directly with each other. No agents are involved and therefore no commissions are due.

Click here to find out more!

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