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8 complete guides for foreigners buying property in Bali

8 complete guides for foreigners buying property in Bali

Bali is a stunning location that attracts numerous foreign investors who are keen to own a property there. However, purchasing a property in Bali as a foreigner can be a complex process. To ensure that everything runs smoothly and securely, it is crucial to have a clear understanding of the process and rules involved.

Can foreigners buy property in Bali?

Foreigners often inquire about property ownership when considering investments in Bali’s real estate market. You can acquire and hold leasehold and right-to-use titles for properties in Bali as a foreign individual. However, freehold titles are only available to Indonesian citizens.

This restriction applies universally, even to companies that are 100% domestically owned; they are not permitted to own freehold property. An exception to this rule exists for the ownership of apartments. 

Foreigners can own an apartment in Bali, although the ownership does not extend to the underlying land. However, such arrangements are infrequent, as most apartments are typically offered as leasehold properties.

Alternatively, foreigners can establish a foreign investment company, PT PMA, and acquire property under a right-to-build title. This avenue is available for specific business activities.

What are the laws on owning property in Bali?

The safest way for a foreigner to own property in Bali is by obtaining the ‘Right to Build’ (Hak Guna Bangunan) and ‘Right to Use’ (Hak Pakai/HP) certificates through PT PMA.

 

Aspects Hak Guna Bangunan Hak Pakai
Purpose Grants the right to build and own structures on state-owned or private land under a lease agreement. Grants the right to use a building or property on state-owned land under a lease agreement.
Certificate Validity The certificate is initially valid for 60 years, and it can be extended for 30 more years and renewed for 30 more years, for a total of 90 years. Similar to HGB, initially valid for 60 years, extendable for another 30 years, and potentially renewable for another 30 years, reaching a total of 90 years.

 

The differences between freehold and leasehold properties

If you are planning to buy a property, it’s important to understand the differences between freehold and leasehold properties. To help you make an informed decision, I have a table that provides a clear overview of these differences.

 

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Property Type Ownership Duration Pros Cons
Freehold Indefinite ownership Complete control, generational inheritance Higher initial costs, sole responsibility for maintenance
Leasehold Typically 25 to 99 years Lower upfront costs, less maintenance responsibility, straightforward exit strategy Usage restrictions, potential risks with lease renewals, limited property modifications

What type of properties can foreigners buy in Bali?

If you’re considering investing in a property in Bali, you’ll be pleased to know that there are a wide range of accommodations available to choose from. These properties come with different features and are priced differently, so you can select one that best suits your budget and preferences.

1. Villa

Villas in Bali have unique themes and cozy vibes. They typically include a pool, a small garden, a dining area, and bedrooms. Bali offers modern and traditional villas, making it a good choice for those who prefer cozy properties.

2. Apartment

Apartments are less common in Bali than in other cities like Jakarta. The available ones are usually studio or one-bedroom apartments. Vertical housing is rare in Bali compared to metropolitan areas.

3. Guesthouse

Guesthouses are common in Bali, catering to various preferences. However, budget-conscious travelers often choose alternative accommodations like motels that provide necessary amenities.

The process of buying property in Bali

the process of buying property in bali

As a foreigner interested in buying or leasing a property in Bali, you must follow these critical steps without fail. They are crucial to ensure a hassle-free and successful process.

Step 1: Set up a PT PMA

Establish a PT PMA through the Indonesian Investment Coordinating Board (BKPM) or a local agency. This allows the purchase of both freehold and leasehold properties.

Step 2: Work with a professional real estate agent

Navigate the complex Balinese real estate market by employing a skilled agent. They streamline the buying or selling process, provide access to diverse property listings, and assist with negotiations, ensuring your interests are protected. Contact InCorp Indonesia for land and property ownership services in Bali.

Step 3: Identify the right property

Explore Bali’s diverse property options, from spacious villas to affordable townhouses. Professional agents or property management companies can help identify suitable properties, ensuring legal requirements are met.

Step 4: Ensure property licenses

Request essential documents from the seller, including the Certificate of Property and Building Approval. Delay or refusal to provide these documents may indicate issues, helping prevent potential scams.

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Step 5: Conduct due diligence before buying property in Bali

Conduct due diligence to verify land ownership, licenses, and other crucial details. Ask questions about the owner, marital status, inheritance, property certificates, document location, local zoning laws, and tax obligations to make informed decisions.

Step 6: Finalize SPA and initial payment

Sign the Sales Purchase Agreement (SPA) with an authorized notary, ensuring comprehension. Pay 10-30% upfront directly to the certificate owner to avoid issues.

Step 7: Complete payment and handle taxes

Conclude the Deed of Sell and Buy with a notary, ensuring property tax payment. Be mindful of the 5% Transfer Tax (BPHTB) and the Land and Building Tax (PBB).

Step 8: Transfer ownership

Facilitate ownership transfer through the notary, registering it with the National Land Agency (BPN). Obtain the Certificate of Property, signifying agreement by both parties.

Guide to Doing Business in Bali & Lombok

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Own your property in Bali with InCorp Indonesia

Investing in Bali property can be a fulfilling experience. InCorp Indonesia has over a decade of experience in helping foreigners navigate the complexities of Indonesian property ownership, making it the perfect partner to make your dream come true.

Why choose InCorp Indonesia?

  • Expertise & efficiency: We handle all the legalities, paperwork, and administrative hurdles, saving you valuable time and ensuring a smooth process.
  • Seamless solutions: We offer comprehensive guidance from company registration for PT PMA setup to securing suitable land and property ownership titles.
  • Local knowledge & network: Our deep understanding of the Bali market and established connections ensure you get the best deals and avoid potential pitfalls.
  • Peace of mind: Relax and focus on your island dreams, knowing your investment is in safe and experienced hands.

Keep the complexities of foreign property ownership in Bali from holding you back. Contact us by clicking the button below.

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    David Susandi

    Branch Manager – Bali Office at InCorp Indonesia

    Leading the way at InCorp’s Bali office is David, the Branch Manager. His extensive career, which exceeds a decade, has seen him flourish in roles that include project management, operations leadership, and strategic corporate planning

    David has been on the board of many entrepreneurial organizations. He is a member of HIPMI (Himpunan Pengusaha Muda Indonesia), BPD Bali, and the President of JCI (Junior Chamber International) Badung, Bali in 2019. He holds a diploma in Russian Culture Studies from the University of Padjadjaran, Bandung.

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