7-Step Guide to Safely Buying Property in Bali for Foreigners in 2022

#1 Understand the local law before buying property in Bali

The most common notion you learn researching property in Bali is that you can buy it freehold and leasehold. According to Indonesian law No. 5 from 1960 on Basic Agrarian Principles, “freehold” (Hak Milik title) – a free and lifetime ownership of the land or any other property applies only to locals. However, if you open a PT PMA company in Bali, you can own a freehold property under the Hak Pakai or HGB title. Otherwise, leasehold agreements are available for foreigners that do not require a company setup.

Can foreigners buy property in Bali? Yes, foreigners can legally and safely buy property in Bali under a lease agreement or “leasehold” (Hak Sewa title) or right to use (Hak Pakai) that will be valid for 25 to 30 years with an option to extend up to 80 years. Foreigners are invited to invest in property in Bali as individuals or through a special foreign-owned company called PT PMA (PT Penanaman Modal Asing) and those are the only legal ways to use land according to the law.

Initially, you will sign a lease agreement for 25 or 30 years, and when the lease expires you can either extend it for another 20-30 years or let it go and the ownership title will return to the original owner together with the building or any improvements you’ve made to this property. 

When you’re buying property for commercial use, you will acquire a special title – HGB, Hak Guna Bangunan that lasts, as well, for up to 80 years. Buying property in Bali via a local nominee is illegal and completely unsafe for foreigners. 

#2 Find a property to buy

Buying property in Bali, think about a few things:

1. What are your lifestyle and daily needs? Do you have kids that need schooling or elder parents? Do you like walking or prefer driving a car? It will determine the location and greatly affect your budget and rental income. 
2. What are your budget and investment goals? You can purchase property as a residence in Bali or you can invest in a rental property to earn passive income. 
3. What type of property are you looking for? Property in Bali mostly consists of land and villas, but new apartment developments are gaining in popularity too. 

The easiest solution is to invest in a turnkey villa through a western-owned company like Ilot Property. This French-Indonesian developer takes care of every step for you from sourcing the best land in a location most suitable for your needs to building a perfect house incorporating western standards of comfortable living. With only a 10% downpayment to get started and within 10 months you will be a luxury turnkey villa owner.

The best places for buying property in Bali are Canggu and Umalas, Nusa Dua and Sanur, Seminyak, Uluwatu, Jimbaran and Ubud. Canggu and Seminyak are trending areas with surfing, amazing cafes, beach clubs, and weekend activities. Ubud is a spiritual jungle mecca, while Nusa Dua and Sanur are perfect for families and tourists looking for 5-star hotels. For those who love surfing, white-sand beaches, and breathtaking cliff views – Uluwatu is the place to go.

There are a few modern off-plan property developments Ilot curates in tranquil residential Umalas and family-friendly prestigious Nusa Dua. They offer 4 to 6 bedrooms, come fully furnished, are finished with high-quality materials, and overlook rice fields. With Ilot you can build a perfect western-designed villa anywhere in Bali as we can research and analyze land investments for you.

#3 Complete Due Diligence Report

Due Diligence or property title background check is the most crucial step to ensure that you are buying property in Bali legally and with no risks, debts, or unpleasant surprises. 

You will need to ask the owner to provide the following:

• Original Hak Milik Certificate. Do not accept any copies as only the original document can confirm the ownership rights. 
• ID documents such as a copy of Kartu Tanda Penduduk (KTP) of the seller and his/her spouse. The names should match those on the Hak Milik Certificate, Family card (Kartu Keluarga/KK in Indonesian), and Marriage Certificate (or Death Certificate if the spouse has passed away).
• PBB tax payment, called SPPT PBB to make sure there are no due payments. 
• NPWP, or the seller’s tax number.

It is also important to confirm the zoning and the aspect of the land as according to Indonesian Law the zoning determines how this land can be used: some land is only for agriculture (green zone), and some land can be built on only for residential purposes with or without possibility to rent (types of the yellow zone), and finally, there is land zoning allowing commercial use. 

Sourcing the land for our clients for the past 20 years, our team at Ilot Property always takes care of the legal aspect of the transaction to make buying property in Bali stress-free.

#4 Sign and transfer money

Once you’re satisfied with the property you can move on to sign the contract and transfer the money. The signing is only legal in presence of a certified notary, who will revise, sign, stamp, and register your agreement. 

With a completed villa you will have to pay the full amount in advance. However off-plan projects mean the payments are structured throughout the build making it a more manageable and cost-effective solution. You also have a brand new villa at the end of the process.

How much does it cost to buy a property in Bali? In 2022, 100 sq.m (one are) of land per year in central locations (Canggu, Seminyak, Umalas) will cost up to $120,000 are/year, while remote areas still offer affordable land priced at $400-500 are/year. You can browse Ilot Property’s currently available stock here. 

It is often cheaper to buy an off-plan villa or a plot of land and build your own ideal house! Buying property in Bali with Ilot Property you will only have to pay a 10% settlement to start the building process. 

#5 Build your future property

If you are buying land in Bali your next move is probably to build your future residence. Ilot Property, with over 20 years of experience, has developed several optimal villa layouts to choose from. Our team of experts will take care of everything from land sourcing to design modifications, legal documentation, and taxes. In 10 months you will have a turnkey property that we can even manage for you to maximise your ROI. 

We have dedicated architectural and engineering teams passionate about building durable, low-maintenance sustainable houses with a luxury modern touch and high comfort of living. We use cutting-edge micro-piles, cavity floors for housing pipework and electrical, double-layer walls, and high-grade steel beams to ensure European-standard homes are built to last.

Building in Bali requires a special building permit. It was for a long time IMB (Izin Mendirikan Bangunan) but in 2021 it was supceded by – PBG (Persetujuan Bangunan Gedung). With IMB it was mandatory to apply for a permit before starting a building and it could take up to a few months to get your permit. The rules have changed somewhat with PBG including that it no longer has to be applied before the build starts as its function is to state the technical build requirement to which a building must be built. The rules in Indonesia tend to change quickly with little notice so you must be aware of the latest regulations or risk delays, costs, or other setbacks.

 Ilot Property Bali will get all the needed permits for you.

#6 Live or get a permit for rent

Within 10 months Ilot Property will hand you over a beautiful villa of your chosen design in a location selected for you. Such a concierge service allowed us to build trust and a legion of happy clients living in Bali. 

Once your villa is done, you can live in Bali permanently if you have an appropriate stay permit or travel and rent your place. Indonesia is about to introduce 5-year visas for foreigners that will allow you to live in Bali and keep working remotely. If you are planning on renting your property in Bali and the zoning allows you to rent it daily or monthly, you will have to apply for a special permit – Pondok Wisata. 

#7 Hire a Property manager

To make sure your villa remains as beautiful and functional as it is over years under merciless sun and rains on the tropical island, you will have to accommodate time and budget for maintenance. With Ilot Property’s elegant build and engineering, you know that your property is built to last in the challenging environment of the tropics. And our Property management team will take care of maintenance and general housekeeping, so you don’t have to.

For those clients who are buying property in Bali to rent it out, we offer full property management services with 24/7 personal guest assistance and can guarantee a high occupancy rate and returns on investments. Our villa management services have no sign-up fees, provide guest services in 5 languages and cover all your needs from marketing to filling tax returns forms and to weekly check of the villa followed by a detailed report. Talk to us if you want us to take premium care of your villa while you’re enjoying your life!

Whether you’re buying property in Bali for your residence or rental business, Ilot Property is here to offer you all-in-one property developer services from finding a perfect land to building a dream villa to live and work from Bali.

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