Valuing a Bali Leasehold: Price per Remaining Year, Discounting and the Extension Clause

Step one: price per remaining year

A leasehold is the right to use a villa for a fixed number of years, after which the land, and usually the building, return to the landowner. The simplest comparison between two leases is the price divided by the years left.

A completed 2-bedroom leasehold asked a median IDR 3.54 billion with a median 25 years left on 6 October 2026: about IDR 142 million a year. Check that the years in the listing are the years remaining, not the original term; listings use both.

Step two: why years are not all worth the same

Money in 20 years is worth less to you than money next year, and a valuer allows for that with a discount rate. The value of a lease is then the villa’s yearly net income multiplied by a factor that depends on the years left and the rate. The rate is a judgement about risk and alternatives, not a published Bali figure; the table uses 6%, 8% and 10% only to show the arithmetic.

• At 8%, 15 years left is worth about 80% of 25 years left at the same income; straight-line it would be 60%.
• At 8%, 10 years left is worth about 63% of 25 years; straight-line, 40%.
• Five more years on a 25-year lease add only about 5% at 8%; the distant years are worth little today.

What the listings show

Among completed leasehold villas listed by Baliestate’s partner agencies on 6 October 2026, those with under 20 years left (a median 16.5) asked a median IDR 26.8 million per m² of building over 38 listings, and those with 25–30 years IDR 31.1 million over 145: about 14% less. At an assumed 8%, 16.5 years against 25 is worth about 16% less; straight-line, about 34% less.

So sellers of short leases price as though buyers discount, and the lease-length guide shows the consequence: per m² per year of lease, short leases were the most expensive way to buy time, at IDR 1.70 million against IDR 1.17 million for 25–30 years. Which view should you use? The straight line, if you need the villa to pay for itself within the term, or if you will not be able to sell the remaining years later. The discounted view, if the price has to compare with another investment.

The extension clause

An extension written into the original deed with a price or a formula adds years at a known cost, and a valuation can count them, less what they cost. One left ‘to be agreed at the time’ is an option held by the landowner, and a buyer should value it at nothing.

Article 1576 of the Civil Code carries an existing lease over to a new landowner if the land is sold, but that protects the term already agreed, not an extension not yet exercised. Ask the notary whether the extension is binding on a future owner of the land.

Off-plan leases and the construction months

Off-plan leases had a median 28 years on 6 October 2026, against 25 for completed villas. If the lease starts at signing and the build takes the reported 12–18 months, the years you can use are fewer: 18 months off 28 years leaves 26.5. Ask for the lease to start at handover, or count from handover when you compare.

A worked comparison

Two villas of the same size in the same area, both asking IDR 3.5 billion. One has 25 years left, the other 15. Straight-line, the first costs IDR 140 million a year and the second about IDR 233 million. Discounted at an assumed 8%, the second is worth about 80% of the first at the same income, so it should ask about IDR 2.8 billion, not IDR 3.5 billion. On either view the 15-year villa is overpriced; the question is by how much, and the extension clause and the villa’s real income decide that.

Common questions

Sources and further reading

• Leasehold villas for sale, with today’s median lease term
• Leasehold against freehold prices in every area
• For agencies: price listings against comparable leases

Related guides

• Does a Shorter Lease Make a Bali Villa Cheaper? The Data Says Barely
• The lease extension clause: the most valuable paragraph in the deed
• Leasehold vs Freehold in Bali and Indonesia (2026): Who Can Own
• Selling a Leasehold Villa in Bali: Assignment, Tax and What Buyers Pay For
• How a Bali Villa Is Valued: Comparables, Income, Cost and When You Need a Licensed Appraiser
• Bali Villa Rental Yield 2026: Why Net Is 40–60% Below Gross

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