A Bali villa was built without a PBG — what is the fine, and who has to demolish it?

A contractor says the paperwork is in process and the foundations are already poured. Or the villa you are shown was finished two seasons ago and nobody can produce the approval. Underneath both sits one question, and the answer that circulates on permit pages has the wrong shape.

The penalty for building without a PBG is widely described as a fine of 10 per cent of the building’s value.Unverified How widely we cannot say. We did not survey agencies, we name no party, and we record the sentence because the law as it now stands does not contain it. We read that statute in both its versions and two government regulations, in the copies the ministries publish themselves, and the word that governs this situation is not a fine at all.

What does the law oblige the owner to do?

Article 41(2) of Law 28 of 2002, as substituted by Article 24 of Law 6 of 2023, lists what the owner and the user of a building are obliged to do, and the last item on that list is to demolish it — in four cases, one of which is that the building has no Persetujuan Bangunan Gedung.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified The Indonesian noun heading the list is kewajiban: obligation. It sits beside using the building for its stated function, maintaining it periodically and having its fitness inspected. It does not sit in the list of penalties, which is four articles further on.

The same amendment puts holding a PBG among the owner’s own obligations, at Article 40(2)(b) of Law 28 of 2002.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified Article 41(3) adds one qualification and only one: the obligation to demolish is carried out without disturbing public safety and order.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified Nothing in the article makes the duty wait for an order, a notice or an inspection.

The obligation is older than the permit’s present name: the 2002 text put holding an izin mendirikan bangunan, the IMB, among the owner’s obligations at Article 40(2)(b), and its Article 41(2)(f) already obliged owner and user to demolish a building that had none.^{Source: 2}JDIH Kementerian Agraria dan Tata Ruang/Badan Pertanahan Nasional, Last reviewed 29/09/2026Confidence: Verified What 2023 changed there was the name of the document the duty turns on.

When was the approval supposed to exist?

Article 36A(1) of Law 28 of 2002 has the construction of a building — construction of the kind Article 35(1) describes, which is building work carried out through the stages of planning, execution and supervision — done after the Persetujuan Bangunan Gedung has been obtained.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified We carry that cross-reference rather than dropping it. The rule is written against a defined stage of work, and generalising it into a free-standing sentence would be our reading rather than the statute’s, even where the two coincide.

That last clause needs care, because a reader who opens the regulation and searches for demolition will find it repeatedly inside that very list. The list restricts demolition work, halts it, freezes the approval for it and revokes that approval: it treats demolition as an activity the state controls, not as a thing it orders. And the same regulation does order demolition elsewhere. Article 12(2) of Government Regulation 16 of 2021 ends its own list of sanctions with an order to demolish the building, for an owner whose building does not meet the function fixed for it in its PBG.^{Source: 3}JDIH Kemenko Bidang Infrastruktur dan Pembangunan Kewilayahan, Last reviewed 27/09/2026Confidence: Verified Naming that neighbouring clause sharpens the contrast rather than softening it: the regulation knows how to order a demolition, and for the missing approval it does not.

Is there a fine, and how much?

Not an administrative one. Article 45(1) of Law 28 of 2002 lists nine administrative sanctions, from a written warning through to an order of demolition, and not one of them is a monetary fine.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified A case-insensitive search of the full text of Government Regulation 16 of 2021, the regulation that implements that statute, returns the Indonesian word for a fine, denda, zero times.^{Source: 3}JDIH Kemenko Bidang Infrastruktur dan Pembangunan Kewilayahan, Last reviewed 27/09/2026Confidence: Verified

There is a version of this law that carried such a fine, and it stopped being the current text in 2023. The building law as promulgated in December 2002 allowed, at its Article 45(2), a fine of at most 10 per cent of the value of the building being built or already built, on top of those nine sanctions.^{Source: 2}JDIH Kementerian Agraria dan Tata Ruang/Badan Pertanahan Nasional, Last reviewed 29/09/2026Confidence: Verified Law 6 of 2023 amended Article 45 to read differently, and the replacing text has no fine in it: paragraph (2) now only sends the criteria, the kinds and the procedure to a government regulation.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 29/09/2026Confidence: Verified Why the figure is still quoted we did not investigate. We read the 2002 wording at jdih.atrbpn.go.id, the legal portal of the ministry for agrarian affairs and spatial planning.

Then the percentages, which are real, and criminal. Article 46 of Law 28 of 2002 sets imprisonment of up to three years or a fine capped at 10 per cent of the building’s value where the breach caused loss to another person’s property; up to four years or a fine capped at 15 per cent where it caused an accident leaving someone disabled for life; and up to five years and a fine capped at 20 per cent where it caused a death.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified The conjunction is the point, and it is not decorative. For the first two subsections the statute writes atau — or — so the prison term and the fine stand as alternatives rather than as a pair. Only the third, the one about a death, writes dan: and.

Article 46(5) then leaves the criteria, the kinds, the amount of the fine and the procedure for imposing these sanctions to a government regulation.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified The percentages are ceilings the statute writes down, not a tariff it applies by itself.

A villa standing quietly on its plot meets none of those three conditions on its face. That is why the figure quoted in the market is wrong in both directions at once. It is too harsh as a description of the ordinary case, because no criminal ceiling is reached at all without a victim; and it is too mild as a description of what Article 41 asks, because the obligation to take the building down does not depend on anyone having been harmed. That reading of the two articles against each other is ours. It is an inference from the texts, not a sentence either of them contains.

What if the villa is already standing?

There is a route, and it is narrower than it sounds. Article 123(1) of Government Regulation 28 of 2025 provides that a business actor whose building already stood without a building licence or a PBG before that regulation came into force does not need to obtain a PBG, and may apply for the SLF directly when it applies for or renews its business permit through the OSS system.^{Source: 4}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified That regulation came into force on the day it was promulgated: Article 552 says it takes effect on the date of promulgation, and the promulgation line reads 5 June 2025.^{Source: 4}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified

The route has a shape worth reading closely. Government Regulation 28 of 2025 names the PBG and the SLF among the basic requirements for a business actor, at Article 12(1), and its Article 122(3) has the SLF for a building that already exists issued on the strength of a functional-suitability inspection, carried out either by a technical assessor or by a panel the regional government forms.^{Source: 4}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified The 2021 regulation points the same way at Article 282(1), where the central government is to accelerate the SLF process for buildings that already exist.^{Source: 3}JDIH Kemenko Bidang Infrastruktur dan Pembangunan Kewilayahan, Last reviewed 27/09/2026Confidence: Verified

Three things narrow it all the same. It is addressed to a Pelaku Usaha moving through the business-licensing system, not to an owner as such. It reaches buildings that already stood before the regulation took effect, which makes that commencement date the one a reader has to check their own dates against. And it does not clear the ground behind it: Article 550 keeps earlier rules on basic requirements and business permits in force so far as they do not contradict the new regulation, and revokes only Government Regulation 5 of 2021.^{Source: 4}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified On our reading of the hierarchy of norms it could not do more than that in any case: a government regulation cannot amend an obligation written into the statute above it, and Article 41 is in the statute.

Where we may be wrong

Four limits, and they bound everything above.

We read the documents, not the practice. Whether any Bali regency will issue a PBG or an SLF for a finished building, and on what terms, is not in these texts, and we have not read a body of cases.

We cannot tell you whether the duty travels with the keys. Article 41 addresses the owner and the user in the present tense; it does not say what becomes of the obligation when someone buys a building that already lacks approval, and we are not going to settle that by tone.

We compared five articles, not two statutes. Against the 2002 original we read Articles 40, 41, 44, 45 and 46 and nothing else, so what we report as removed is removed from those. Two national databases refused us while we did it: peraturan.bpk.go.id and dpr.go.id each answered with an HTTP 403 on 27 September 2026 and again on 29 September. Nothing here rests on a copy from either, and we did not open the other portals that publish it.

We read the amendment record, not the amending laws. The finance ministry’s record page for Law 6 of 2023, which is the URL registered for that source, shows the law in force from 30 December 2022 until revoked, and its history panel names two later laws that amend it: Law 1 of 2025 and Law 16 of 2025, both amendments to the 2003 law on state-owned enterprises.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 29/09/2026Confidence: Verified Neither is addressed to building permits on its face; we did not open either to check.

One more thing about the documents themselves, which we did establish rather than fail to. Three of the four text layers are damaged by font mapping, the 2002 copy being the clean one. Government Regulation 16 of 2021 renders its own promulgation date as “2O2L”; the statute letters its ninth administrative sanction “i” and renders that letter as a digit; Government Regulation 28 of 2025 prints “Pasal I24” where it means Article 124. The percentages survive it, because the statute writes each of them twice — in figures and again in Indonesian words — and we read both. The dates that came through damaged we checked against the portals’ own record pages for the documents.

The amendments read above were enacted and promulgated on 31 March 2023, the date on Law 6 of 2023.^{Source: 1}JDIH Kementerian Keuangan, Last reviewed 27/09/2026Confidence: Verified That is the date a reader should weigh a freshness check against, because it is the date of the text we read. We read the four documents in the copies three ministries’ own legal-documentation portals publish: the current three as those files stood on 27 September 2026, the 2002 original as it stood on 29 September. Where to look inside each of them — the article, the page or sheet, and the damage — is recorded against the source in the register.