How to Buy Property in Bali: A Comprehensive Guide

How to Buy Property in Bali

Introduction: If you are reading this article, it’s likely that you have already made the decision to buy property in Bali. We won’t delve into the numerous benefits of owning property in this beautiful destination. Instead, let’s focus on the essential steps involved in the buying process.

Understanding the Basics of Buying Property in Bali

When purchasing property in Bali, it’s important to note that you primarily acquire the land itself. The certificate is issued for the land, while the villa or house is covered by a building permit (PBG or SLF). Consequently, as the buyer, everything on the land automatically belongs to you as the certificate holder.

Key Steps for Buying Property in Bali:

  1. Selecting the Area: Choose the specific area in Bali where you wish to purchase land or a villa. Keep in mind that different areas of Bali have varying characteristics, which can impact the property’s value, resale potential, and rental value.
  2. Understanding Ownership Options: There are three legal ways for foreigners to obtain land in Bali:a. Long-Term Land Lease (Leasehold): Enter into a long-term lease agreement, typically lasting 25 years with an option to extend or renew the contract.b. Establishing an Investment Company (PT PMA): Register a local investment company in Indonesia (PT PMA) where all founders and shareholders can be foreigners. This option allows you to acquire land through the company.c. Foreign Citizen Hak Pakai: Foreigners can purchase land in Indonesia once in their lifetime through this method. The land certificate is issued individually, with a holding period of 80 years. However, it is not permitted to use the property for commercial purposes, only for personal use.
  3. Determining Property Size and Budget: Consider the desired size of the villa or land area you need, taking into account your budget constraints.
  4. Finding Real Estate Opportunities: To search for properties in Bali, you will need to utilize multiple sources, as there is no single online resource for land or villa listings. Some popular sources include real estate agents in Bali, Facebook Marketplace, OLX Indonesia classifieds website, and Rumah123 website.
  5. Understanding Zoning Regulations: Familiarize yourself with the three main land zones in Indonesia, particularly Bali, which regulate the permissible land uses:a. Green Zone: Reserved for agricultural purposes and unsuitable for construction.b. Yellow Zone: Intended for private residential development. You can build houses for personal or residential use and potentially rent out the property monthly.c. Tourist Zone: This zone offers attractive investment opportunities, as properties can be rented out on a daily basis and used as hotels.

Property Search and Transaction

Once you have addressed the above considerations, you can begin your property search. Suppose you opt for a long-term land lease (Leasehold) for 25 years. After selecting the desired area, budget, and property specifications, it’s advisable to engage a trusted real estate agency and continue searching independently. Sooner or later, you will find a suitable property. When you find a property you like, it’s crucial to make a deposit (usually 3-5 thousand dollars) to secure it, as desirable properties do not stay on the market for long.

After making the deposit, obtain copies of all relevant documents for the land and the house for further verification. Engage a trusted notary to verify the property, a process that typically takes around 7 days. Concurrently, ensure that your land is located in a suitable zoning area by checking its ITR zoning. In most cases, your real estate agent can assist with this. Once everything is confirmed to be in order, you can proceed with drafting a contract and discussing the transaction details. It is important to take into account the necessary nuances within the contract to avoid future issues with state authorities and the landlord. The entire process of buying property through a leasehold arrangement typically takes around 2 weeks.

Alternative Options

Aside from leasehold, the most reliable option for foreign buyers is to purchase real estate in Bali through an Indonesian company PT PMA. This option is more suitable for larger investors, as it requires registering an investment company in Indonesia and committing to investing a minimum of $750,000 in the Indonesian economy. Following the transaction, you will receive a land certificate in your company’s name, allowing you to utilize the land for the next 80 years. Eventually, you may choose to sell the property at market price or transfer it to another company. Many major foreign companies operating in Indonesia, such as TOYOTA and SAMSUNG, utilize this method to register their real estate holdings.

Lastly, Hak Pakai is another option available for foreigners to buy land in Bali and Indonesia. However, this method can only be used once in a foreigner’s lifetime and requires the property’s value to exceed 5 billion rupiah ($335,000). It’s important to note that commercial use of the property is prohibited, with permission granted only for personal use.

Conclusion: We hope this comprehensive guide has provided valuable insights into buying property in Bali. If you have any further questions or need assistance, please feel free to leave a comment or reach out to us via WhatsApp. Should you require assistance in finding land for purchase or rental in Bali, our company is here to help. Contact us, and we will be delighted to assist you.

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