Building permits are a critical compliance requirement for any Bali villa investment intended for rental. This guide explains the transition from IMB to PBG, what each permits covers, and how to ensure your property is fully compliant for legal short-term rental operations.
From IMB to PBG: The Regulatory Transition
Indonesia replaced the Izin Mendirikan Bangunan (IMB) system with the Persetujuan Bangunan Gedung (PBG) system in 2021 under Government Regulation PP 16/2021. For investors, this means: new villa construction requires PBG (not IMB), existing villas with valid IMBs retain their permits (IMB is still legally valid), and any significant renovation or expansion of existing buildings may require a PBG application.
What PBG (and IMB) Covers
The building permit confirms: the building structure complies with technical regulations, the intended use is consistent with the zoning classification of the land, the building design has been reviewed for safety standards, and the owner has authority to construct on that specific plot. For rental villas, the PBG must specify commercial/hospitality use (not residential-only) to enable legal short-term rental operations.
Operational Permits for Villa Rental
Beyond the building permit, a Bali villa renting legally also needs: Tanda Daftar Usaha Pariwisata (TDUP) – tourism business registration from the local government (Kabupaten/Kota), Nomor Induk Berusaha (NIB) – business identification from OSS, and for PT PMA-owned villas, the relevant sectoral permits under the PT PMA license. Villas operating without these permits risk fines, forced closure, or difficulties renewing visas for foreign-national operators.
Due Diligence on Permits for Existing Villas
When purchasing an existing villa in Bali, always verify: the original IMB or PBG is present and matches the physical structure, the building permit allows commercial/rental use, all tourism business registrations are current, and there are no outstanding compliance notices from local government. Our due diligence service covers permit verification as a standard step. Contact us via WhatsApp +62 811-3941-4563.
