Buying property in Bali has become legal for foreigners since 2010.
However, the system is different from what foreign investors may be used to, and to safely buy a property in Bali, you must comply with certain regulations.
Ilot Property Bali has prepared this full guide on Buying Property in Bali as a foreigner to help you navigate the process.
Is Bali a good place to buy a property?
Voted the world’s best destination by TripAdvisor in 2021, Bali is one of the best places to buy property.
As the pricing trend is constantly climbing, squeezing out buyers on a budget and leaving fewer and fewer properties available in the hottest suburbs. It is still possible to find affordable land or villas with amazing views or a beachfront house for sale.
#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 or leasehold.
According to Indonesian law No. 5 from 1960 on Basic Agrarian Principles, “freehold” (Hak Milik title)—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.
But can foreigners buy property in Bali?
Yes, foreigners can legally and safely buy property in Bali.
If you buy the property under a lease agreement or “leasehold,” you can use it for 25-30 years, with a chance to extend it, depending on your agreement with the landowner.
But if you decide not to extend it, the property will return to the landowner.
If you invest in property in Bali as an individual or through a special foreign-owned company called PT PMA (PT Penanaman Modal Asing), there is a minimum of $700,000 initial investment and more requirements than the leasehold.
See also: Everything you need to know about PT PMA
#2 Find a property to buy
Buying property in Bali, think about a few things:
- What are your lifestyle and daily needs?
Do you have kids who need schooling or elderly parents? Do you like walking or prefer driving a car? These factors will determine the location and greatly affect your budget and rental income. - What are your budget and investment goals?
You can purchase property as a residence in Bali or invest in a rental property to earn passive income. - What type of property are you looking for?
Property in Bali mostly consists of land and villas, but new apartment developments are also becoming popular.
The easiest solution is to invest in a turnkey villa through a local real estate agent like Bali Villa Realty. We take care of every step for you, from sourcing the best land in the most suitable location to building a perfect house that incorporates 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 to buy property in Bali are Canggu and Umalas, Uluwatu, Jimbaran, and Ubud. Canggu and Seminyak are trending areas with surfing, amazing cafes, beach clubs, and weekend activities.
While Ubud is a spiritual jungle mecca, for those who love surfing, white-sand beaches, and breathtaking cliff views – Uluwatu is the place to go.
See also: Best Areas to Invest in Bali
#3 Complete Due Diligence Report
Due Diligence or a property title background check is the most crucial step to ensure that you buy property in Bali legally and without risks, debts, or unpleasant surprises.
You will need to ask the owner to provide the following:
- Original Hak Milik Certificate.
Do not accept copies, as only the original document confirms ownership rights. - ID documents, such as a copy of the seller’s and his/her spouse’s Kartu Tanda Penduduk (KTP), are required.
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 ensure there are no due payments.
- NPWP, or the seller’s tax number.
It is also important to confirm the zoning and aspects of the land according to Indonesian law.
The zoning determines how this land can be used: some land is only for agriculture (green zone), some land can be built on only for residential purposes with or without the possibility of renting (types of the yellow zone), and finally, there is land zoning allowing commercial use.
See this article to know more about Bali land zoning.
Sourcing the land for our clients for over 12 years, our team at Ilot Property Bali always takes care of the legal aspect of the transaction to make buying property in Bali stress-free.
#4 Sign and transfer money
Once satisfied with the property, you can begin signing the contract and transferring the money. The signing is only legal in the presence of a certified notary, who will revise, sign, stamp, and register your agreement.
With a completed villa, you must 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.
How much does it cost to buy a property in Bali?
Today, 100 sq.m (one are) of land per year in central locations (Canggu, Seminyak, Umalas) will cost up to $125,000/are, while remote areas still offer affordable land starting from $150/are.
You can browse Ilot Property Bali Listings on our real estate agency website, Bali Villa Realty!
It is often cheaper to buy an off-plan villa or a plot of land and build your ideal house! When buying property in Bali with Ilot Property Bali, you only have to pay a 10% settlement to start the building process.
#5 Build your future property
If you buy land in Bali, your next move is to build your future residence. Ilot Property Bali, with over 20 years of experience, has developed several optimal villa layouts.
Our team of experts will handle everything from land sourcing to design modifications, legal documentation, and taxes. In 10 months, you will have a turnkey property that we can manage to maximize your ROI.
We have dedicated architecture and construction teams who are passionate about building durable, low-maintenance, sustainable houses with a luxurious 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.
Buildings in Bali require a special building permit.
One is PBG (Persetujuan Bangunan Gedung), formerly known as IMB. With IMB, applying for a permit before starting a building is mandatory, 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 and risk delays, costs, or other setbacks.
Ilot Property Bali will get all the permits you need.
Read more about Building Permits in Bali
#6 Live or get a permit for rent
Within 10 months, Ilot Property Bali will hand you over a beautiful villa of your chosen design in a location selected for you. This concierge service has allowed us to build trust and a legion of happy clients living in Bali.
Once your villa is completed, you can live permanently in Bali if you have an appropriate stay permit or travel and rent your place.
Indonesia is about to introduce 5-year visas for foreigners, allowing you to live in Bali and continue working remotely. If you plan on renting your property in Bali and the zoning allows you to rent it daily or monthly, you must apply for a special permit—Pondok Wisata.
#7 Hire a Property manager
To ensure your villa remains as beautiful and functional as it has been over the years under merciless sun and rains on the tropical island, you must 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. Our property management team will handle maintenance and general housekeeping, so you don’t have to do it.
For clients buying property in Bali to rent it out, we offer full property management services with 24/7 personal guest assistance.
Our villa management services have no sign-up fees, provide guest services in 5 languages, and cover all your needs, from marketing to filling out tax return forms and weekly villa checks followed by detailed reports.
Or visit Bali Villa Realty, our real estate agency website, for those who want to sell or rent your properties!
Whether buying property in Bali for your residence or rental business, Ilot Property offers all-in-one property developer services, from finding a perfect land to building a dream villa to live and work in Bali.
Market Forecast and Future Outlook
When you think about buying property in Bali in the future, it’s important to consider what could make houses and lands more valuable.
In places like Ubud, people use green energy, like solar panels, to make electricity from sunlight. This is good for the Earth and can save money on energy bills.
Because more people want to live in a way that’s good for our planet, houses that use green energy might become more popular.
This means they could be worth more money, or more people might want to rent them.
These details can help you consider the long term when buying a property, especially if you care about nature and saving energy.
Financial Planning and Costs
When you want to buy a house or land in Bali, plan for all the money you’ll need to spend and understand the costs involved.
First, remember that if you’re not from Indonesia, you can’t borrow money from banks there. You need to have enough cash saved up to buy the property.
Let’s look at the different costs:
- Purchase Price:
This is the big amount you pay for the property. It’s usually the largest cost. - Taxes:
The amount of tax you pay depends on how you buy the property. If you buy through a foreign-owned company (PT PMA), you usually pay a 10% tax. However, for foreigners without a company, the tax can be higher. - Ongoing Costs:
Even after you buy your property, you’ll need to spend money to maintain it. This might include paying for repairs, cleaning, or community fees if you live in shared areas like a swimming pool or garden.
Planning for these costs is important to save enough money and avoid surprises. Knowing how much you’ll need to spend can help you plan well.
What to do next?
Now you know all the steps of buying a property in Bali safely and legally.
I hope you understand all the outlines and details I’ve mentioned above. Properties in Bali are going fast, and the best deals don’t stay on the market long.
What’s left is for you to take action.
If you have any further questions, our team is here to help. Book a free consultation using the link below to talk with one of our real estate advisors.
See also: Reasons to Invest in Real Estate in Bali
