Bali Property for Sale: 11 Things You Need to Know Before Buying

1. Due diligence is a must.
   The most important takeaway from this post is that you have to make your legal team run a background check of any property you’re thinking of buying. It will reveal any risks and issues that arise later and can cost you money, your building, and your legal status in Bali.
   
   Due diligence typically includes ownership checks, taxes, legal disputes, zoning, and land aspect checks. You need to confirm that the zoning allows you to build and/or rent the villa, that all necessary permits are issued, and that no tax payments are missed.

2. Avoid nominees at all costs.
   There are only two legal ways to buy property in Bali as a foreigner – through a foreign-owned company PT PMA with 10 billion IDR capital, or an individual investor through a leasehold agreement without such a significant investment. Decades ago, there was a risky and utterly unsafe practice to buy property under the name of a local citizen, but it is illegal today and will leave you with money loss and no property at all.

3. Location matters
   Property location affects the availability, possible returns on investments and occupancy rates, and most importantly, the asking price.
   
   The most significant difference in prices we see is in land value. In remote and less popular areas, you can purchase land property for about $400-500 per 100sq.m. per year, while in Canggu and the hottest tourist spots, the same 100sqm per year will go for up to $120,000.
   
   To be location-independent and secure better property prices, you can opt for an off-plan villa that can be built anywhere you’d like. Ilot Property monitors the Bali property market for the best plots, and our engineering and construction team builds premium villa complexes based on unique designs from our catalog. Our fantastic development types have proven to provide the best turnkey home and investment property with a high ROI of 13% to 16% per year.
   
   Our team will analyze the market for you and source a piece of land of a perfect size and location based on your requirements. Meanwhile, you will choose a villa layout from our portfolio and customize it with our professional team. We will build precisely to the specs you desire, and the villa will be completed in less than a year in any location you choose!

4. Know the market
   To successfully and safely buy a Bali property for sale, foreign investors will need an experienced real estate agent based such as Ilot Property.
   
   However, it is better to do homework and be prepared for negotiation. Browse online listings, the marketplace where owners and agents post real estate and ask questions in relevant Facebook groups dedicated to legal matters and real estate in Bali.

5. Notary
   The happy moment of signing a contract and the transfer of the property ownership title can only happen in the presence of an impartial notary. The government appointed them to witness, sign, stamp, and register your transaction.
   
   Do not trust agencies that say you don’t need a notary. It is illegal to close deals and transfer money or ownership without a notary.

6. Most Common Issues with Bali Property for Sale
   When you visit a Bali property for sale, you have to be very thorough with your check. The most common issues with villas in Bali are mold and moisture inside the house, termites, and leaking roofs. This happened due to inappropriate structural designs, not following high standards, poor building quality, and lack of proper maintenance.
   
   If you aren’t comfortable buying a property somebody built, build your own – it is a much safer, customizable, and affordable process. To avoid all common mistakes and issues, Ilot Property has designed a few villa layouts for modern houses, and we can find land for you, build it according to your specs and finish the project within 10 months.

7. You may need to set up a PT PMA company.
   The right way to invest in freehold property in Bali as a foreigner is to set up your own company PT PMA that allows you to own property fully and protects you on the international and national levels.
   
   To set up a company, you will have to hire a lawyer to gather all needed paperwork and invest a paid-up capital of a minimum of IDR 10 billion or roughly USD 700,000. You will become not only a fully legal real estate investor but also eligible for a special 2-year stay permit – investor KITAS that will significantly simplify your life in Bali and traveling.
   
   However, not everyone can afford such a significant investment at once, and this is one. There is another legal and safe alternative to lease a villa for your family long-term for up to 80 years – a leasehold agreement under your name. Ilot Property can help you with this!

8. You only own property for a specific time.
   Only Indonesian citizens have hereditary property rights and can legally own land or any property indefinitely. Foreigners are invited to invest and safely hold and use property in Bali for a specific pre-paid period. It usually starts with a 25-year lease, and then you can extend your lease for some time as per your leasehold agreement.
9. Hidden costs
   When buying land or a villa in Bali, you will face extra charges starting with paying a lawyer to run a legal check on the property you chose. The notary fee is a mandatory 1.5% or fixed payment for the notary witnessing and legalizing your contract. Once your transaction is set, you are encouraged to donate money to the village you will be living in.
   
   If you bought a piece of land and are planning to build, you must apply and pay for building permits and business permits for rental businesses or any other business. You will also have to hire an architect, an MEP specialist, and an interior designer to draw your future house in detail, as such plans are requested for building permits.
   
   Taxes on rental income will depend on the property size, the payment itself, and your tax residency status and will be around 10%-20%. The tax while buying Bali property for sale is 5% of the contract price. Land and building tax applies to all buildings exceeding 200 sq m and is calculated based on the property value.
   
   By choosing to invest in property with Ilot Property, you save time and energy on going through all these steps, as we are doing it all for you and handing you over a ready-to-move-in villa. Our services include architecture, development, construction, and property management. We value our clients and know investors’ needs. This is why our property managers will not only take care of bookings or cleaning but will be able to take care of your guests in 5 languages, guarantee regular maintenance checks and renovation, and let you enjoy a great paycheck and our monthly reports. All developments under Ilot Property management generate a stable ROI of 13% to 16%.

10. There are more cost-effective options
    While the Bali property market is expensive and constantly growing, there are always cheaper options. The 2 most common solutions to finding a more affordable Bali property for sale are choosing a less popular location or going off-plan.
    
    An off-plan villa is a lightly customizable villa concept, approved by architects and engineers and ready to be built. Ilot Property Developer has several validated off-plan villas that can be built anywhere in Bali within a few months and with a comfortable payment schedule.

11. What to expect
    Average returns on property investment in Bali are around 8%. The average occupancy rate is 60%. To evaluate your future profits, you can use our ROI simulator or talk to our financial team specializing in property management and investments. However, at Ilot, 20 years of experience in property development and management in Bali allows us to have a stable ROI of 13-16% for all properties we manage.

Ready to browse some Bali properties for sale or choose your layout and location? Contact our development & construction team today to find out how to find a perfect and affordable property for you. 

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