Business and Legal Consultant
July 1, 2025

Splitable Land vs Non-Splitable Land in Bali and Lombok: 7 Critical Facts Foreign Investors Must Know

Article by Admin

Introduction: Beyond the Brochure 

The dream of owning a slice of paradise in Indonesia is alive and well. With demand for land in Bali and Lombok continuing to surge, foreign investors are flocking to these islands to build villas, resorts, coworking spaces, and hospitality ventures. The appeal is obvious: stunning landscapes, booming tourism, and favorable returns on investment.

But behind the glossy brochures and Instagram-worthy plots lies a layer of legal complexity that many newcomers overlook. One of the most important—and often misunderstood—concepts is the distinction between splitable and non-splitable land in Bali and Lombok.

This isn’t just legal jargon. The ability (or inability) to legally subdivide a plot affects resale value, development potential, permit approval, and even your ability to rent or sell individual units in the future.

In this article, we’ll unpack everything you need to know about this critical distinction. Whether you're buying for personal use or as part of a larger investment strategy, understanding how land in Bali and Lombok is classified could save you time, money, and future legal headaches.

What Is Splitable Land? What Is Non-Splitable Land?

When investing in land in Bali and Lombok, one of the most critical legal distinctions to understand is whether the land is splitable (tanah bisa dipecah) or non-splitable. This classification has a direct impact on your development options, exit strategy, and long-term return on investment.

Splitable land refers to land that can legally be subdivided into smaller plots, each of which can be certified individually with separate land certificates. This is especially important for investors planning to develop multiple villas, townhouses, or commercial units that may be rented, sold, or owned individually. With the correct zoning (usually residential or tourism), splitable land allows flexibility in planning and scalability of your project.

On the other hand, non-splitable land is land that, due to zoning restrictions, certificate types, or local regulations, cannot be subdivided into individual titles. This is common with agricultural land, green zones, or land under communal/customary (adat) arrangements. While these plots may be available at lower prices, they limit your ability to develop legally or to transfer ownership of smaller units—posing a major risk for foreign investors unaware of the restrictions.

For those investing in land in Bali and Lombok, the implications are real:

  • Want to build a villa complex and sell each unit? You’ll need splitable land.
  • Planning a partnership where each stakeholder owns a separate portion? Again, splitable land is a must.
  • Thinking long-term resale value? Buyers prefer plots with clear subdivision rights.

In short, always verify whether your land in Bali and Lombok is splitable during the due diligence phase. It could make or break your investment plans.

Legal Classifications of Land in Bali and Lombok

Understanding the legal classifications of land in Bali and Lombok is crucial before making any investment—especially if you're planning to develop or subdivide the land. Whether or not land can be split depends on two main things: the type of land certificate and the zoning regulations in the area.

Here are the four most common land titles foreign investors encounter:

  • SHM (Sertifikat Hak Milik) – Freehold ownership. This is the strongest land title but is not available to foreigners directly. However, Indonesians or entities with a nominee structure often hold SHM titles. SHM land is usually splitable, depending on the zoning.
  • HGB (Hak Guna Bangunan) – Right to build, typically issued to PT PMA (foreign-owned companies). HGB land is commonly splitable and allows you to construct commercial or residential buildings, making it ideal for investors. However, HGB must align with local zoning laws to qualify for subdivision.
  • Hak Pakai – Right to use. Often used by foreigners for residential properties. This is usually not splitable, especially when held under an individual foreigner’s name, as the certificate is tied to a single usage.
  • Hak Sewa – Leasehold land. This is not a formal land title, but rather a rental agreement. Many investors mistakenly assume leasehold land can be freely divided among multiple stakeholders or subleased. In fact, attempting to subdivide leasehold land without proper legal structure is a common mistake and can lead to legal disputes or contract invalidation.

One of the biggest misconceptions among foreign investors buying land in Bali and Lombok is that all leased land offers flexibility. But unless the land is legally classified as splitable under its certificate and zoning status, no subdivision is allowed—even if your notary or agent says otherwise.

To protect your investment, always review zoning maps, land books, and consult legal experts before purchasing any land in Bali and Lombok.

Zoning Rules & Pemecahan Izin (Permit Splitting)

Understanding zoning regulations is essential when evaluating land in Bali and Lombok, especially for foreign investors planning to develop villas, resorts, or commercial buildings. Every piece of land is governed by the ITR (Informasi Tata Ruang), which outlines the permitted use of that parcel.

There are three primary zoning classifications:

  • Pariwisata (Tourism) – Allows for development of accommodations, restaurants, and hospitality-related infrastructure. This zoning is preferred for commercial projects.
  • Pemukiman (Residential) – Suitable for housing or private villas. While development is allowed, there are often restrictions on the number of dwellings per plot.
  • Pertanian (Agricultural) – Typically non-splitable and not eligible for building permits unless rezoned. This land is primarily reserved for farming and cannot be legally developed for tourism or residential use.

One of the most overlooked issues is how zoning impacts pemecahan izin—the legal process of splitting land certificates. Even if the land is technically large enough, the zoning category may limit how many separate ownership certificates (SHM or HGB) can be created. This affects scalability, resale value, and legal clarity for multiple investors.

In Bali, banjar (local customary village) approval is often required before any development or land certificate division can proceed—especially in tourism zones. In Lombok, village heads or desa authorities play a similar gatekeeping role.

The pemecahan izin process is handled by a licensed notary in coordination with BPN (Badan Pertanahan Nasional / Land Office). It involves mapping, surveys, legal verification, and formal application to the zoning and licensing authorities.

For any investment in land in Bali and Lombok, zoning clarity is just as important as the land title. Before purchasing, ask for the ITR certificate and consult professionals who understand the regional differences in zoning and permit-splitting processes.

Risks of Buying Non-Splitable Land for Villa Projects

Buying land in Bali and Lombok for villa development may seem straightforward—until you discover the land is non-splitable. This technicality has caused serious setbacks for many foreign investors who were unaware of its implications.

One of the biggest issues is that you can’t create individual land certificates for each villa unit. That means each unit can’t have its own legal identity, which creates massive roadblocks if you intend to sell or lease individual units. Instead, the entire plot must remain under a single certificate, limiting flexibility and growth.

Worse, this restriction can lead to legal classification problems. A villa project on non-splitable land may not meet the zoning or building code for a commercial accommodation business. Without pemecahan izin (splitting permit), your building permit (PBG) application may be rejected, your NIB (Business Identification Number) could be suspended, and utility hookups like PLN (electricity) or PDAM (water) may be denied.

There have been real cases where investors built 4–6 villa units on one piece of land in Bali or Lombok, assuming they could divide and sell later. But when they tried to sell, they discovered the land was non-splitable based on its zoning, certificate type, or local village restrictions. In some cases, the entire project was deemed illegal, and marketing had to be stopped—costing hundreds of millions in losses.

Another risk? If your buyer conducts legal due diligence and discovers the land can’t be split, the deal falls through. Or worse—they demand compensation post-purchase. That’s why due diligence on land in Bali and Lombok must include a “pemecahan potensi” review: Can this land legally be split and sold in smaller parts?

Don’t rely on verbal promises or assumptions. Insist on a zoning check, land certificate verification, and formal review by a notary or land consultant who understands regional restrictions.

Real Case: 5-Villa Project Blocked Due to Land Type

A foreign investor, eager to tap into Bali’s booming villa rental market, signed a long-term lease for 10 are of land in Bali and Lombok, specifically in Uluwatu. The vision? Build five luxury villas, split the land, and sell each unit individually to other foreign buyers through leasehold contracts.

The problem? The land was in a residential zone (pemukiman) that did not allow pemecahan izin (permit splitting). Even though construction was completed, the investor quickly realized they could not obtain individual land certificates or register each villa under a separate business entity.

This meant the entire 5-villa complex had to operate under one business license (NIB) and one PBG (building permit), making it legally a single property—not five separate ones. Not only did this block their resale strategy, but it also complicated tax reporting and staffing structures.

The issue spiraled into a legal dispute with the lessor. The investor claimed they were misled; the lessor argued the buyer didn’t perform due diligence. The case dragged on while the villas sat vacant, and potential buyers backed out due to unclear legal standing.

This real-life scenario shows why reviewing zoning, land status, and pemecahan potential is non-negotiable. For any villa project, especially on land in Bali and Lombok, the assumption that all land is “splitable” can lead to costly surprises.

How to Check If Land is Splitable in Bali or Lombok

Before purchasing or leasing land in Bali or Lombok, it’s essential to verify whether the land is legally splitable. Many foreign investors assume they can divide a plot for multiple villas or resale units—only to discover that zoning restrictions or land certificate types prevent it.

Here’s a step-by-step guide to ensure you’re making a safe and legal investment:

1. Review the Land Certificate Type

Check whether the land holds a SHM (Sertifikat Hak Milik) or HGB (Hak Guna Bangunan) title. SHM is typically required for ownership splits, while HGB is used for business and leasehold. Not all HGBs can be split without conversion or ownership change.

2. Check the Zoning (ITR) and KDB

Access the ITR (Informasi Tata Ruang) map to understand if the land falls under pemukiman (residential), pariwisata (tourism), or pertanian (agricultural) zones. The KDB (Building Coefficient) will tell you how much of the land can be built upon—and if subdivision is permissible.

3. Ask a Notary to Request BPN Pre-Approval

Your notary can submit an inquiry to BPN (Badan Pertanahan Nasional) to confirm if pemecahan is allowed. This process reduces risk before any transaction.

4. Involve Local Authorities

If the land is in a desa adat or tourism area, you’ll often need clearance from the banjar, village head, or local tourism board.

5. Get Written Consent from the Owner

If leasing land, obtain a signed pemecahan clause from the landlord allowing you to subdivide. Without this, even technically splitable land becomes restricted.

Tip: Always work with a licensed agent, legal consultant, or notary familiar with land in Bali and Lombok to avoid costly setbacks.

Smart Land Investment Starts with Legal Clarity

When it comes to land in Bali and Lombok, the real risks often hide behind beautiful visuals and persuasive marketing. One of the most overlooked—yet critical—factors is whether the land is actually splitable.

Just because a plot looks large and promising doesn’t mean you can divide it for multiple villas or resale. Zoning restrictions, permit limitations, and unclear land rights can make your entire investment legally unviable.

That’s why smart investors don’t just focus on price or location—they prioritize legal clarity. Before committing to any purchase or lease, verify zoning regulations, land certificate type, and whether pemecahan izin (permit splitting) is possible.

Most importantly, don’t go at it alone. Work with professionals who understand the nuances of land in Bali and Lombok—from notaries and legal consultants to licensed land agents. These experts can perform due diligence early in the process, saving you from future disputes, resale limitations, or even demolition orders.

Considering a land purchase? Speak to a trusted legal advisor or notary first to ensure your investment is not only beautiful—but also legally sound.

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