Thinking about snapping up a beautiful villa in Bali? You’re not alone.
Even the most hardened property tycoons go weak at the knees upon seeing homes here. We're absolutely spoiled when it comes to jaw-dropping property suitable for groups, couples, families and purely as investments. BUT, renting accommodation for a holiday and actually buying here are two completely different beasts.
If you want to snap up a piece of paradise as a foreigner, you need to know what you're getting into.
Yes, it can seem overwhelming and even scary at first, but the following article proves that buying a house in Bali, Indonesia, can be surprisingly easy.
Before we launch into our step-by-step process for buying property in Bali as an expat, there are a few things we should cover.
All real estate in Bali (and Indonesia) is governed under law No 5/1960, otherwise known as the Basic Agrarian Law. The Basic Agrarian Law regulates all property ownership in the country.
For foreigners, this law directly impacts your rights as a property owner. The main way in which it does this is by stipulating that foreign buyers must buy a home in Bali through a limited liability company, known as a PT PMA.
Having this entity setup allows you to hold properties on Indonesian soil through the following means.
If you want to buy a home in Bali, this is the ideal solution. A Hak Pakai property grants you the right to use and benefit from said property for a term of 30 years. This can be extended by an additional 20 and 30 years.
Note: There must be an existing building. Vacant land is not covered by the Right to Use.
Leasing a property in Bali is a common option for foreigners. Generally, leases are set for 25 to 30 years with an option to extend.
It's important to note that you as the buyer (lessee) are not the legal owner of the property. You can live in, rent out and otherwise enjoy the property for the period of time specified, but the owner (lessor) is responsible for the land and building tax.
Note that leasehold properties can be purchased in Bali without a PT PMA. Buying a Bali leasehold home only requires a passport and tourist visa.
This right permits freehold ownership of a commercial property, such as a business or villa development.
Consequently, it's the highest right of ownership a foreigner can get. The main difference with freehold is that your name goes on the land title. You can even apply for a mortgage on it.
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Now that's out of the way, let's learn how you can buy a house in Bali as a foreigner. We hope that the following steps demystify the process and make purchasing property here less stressful.
Assuming you have your budget mapped out, it's time to get crystal clear on what you want.
Do you like the idea of a villa in Canggu? Has a beautiful property on the Bukit caught your eye? Perhaps you're looking for a mountain change and have fallen in love with Ubud?
We suggest doing your research on what's available, what's sold and what off-the-plan properties are in development. Join expat groups on social media to get a feel for which locations and properties are most popular with foreigners.
Don’t be afraid to fly in for a recon mission too. Actually visiting Bali with the intention of buying allows you to get a feel for the area. It also allows you to meet local agents and developers face-to-face.
While the internet has allowed for unparalleled access to information about buying in Bali as an expat, nothing beats feet-on-the-ground experience. Here are 5 ways in which partnering with a reliable real estate agency can make your life easier.
What taxes and fees are involved? Has the contract been updated to include new property additions? Is the land freehold or leasehold? These are just some of the important questions to ask when conducting due diligence on a property.
Due diligence is a crucial step in ensuring that you understand everything about the property before making a purchase. It's recommended to hire a lawyer or work with your real estate agency to complete this process thoroughly.
Here's a list of some key things to consider during due diligence:
Once and only when you’re completely satisfied with your due diligence, it's time to make an offer. Again, this is where having a trustworthy agent pays off.
They can negotiate on your behalf, ensuring your offer is fair and reasonable. They can also guide you through the process of making a deposit and signing a conditional contract.
This part of the buying process can be very nerve-wracking. Here at Yolla Realty, we want to ensure that you feel supported and informed every step of the way.
From escrow to property inspections, insurance and relocation services, we're essentially your one-stop-shop for buying property in Bali as a foreigner.
Congratulations! You've made it to the final stages of the buying process. Now it's time to sign the SPA.
The SPA is a critical legal document in property transactions. It must be signed in the presence of an authorised public notary (PPAT). Before signing, check with your lawyer or real estate agent to ensure the SPA safeguards your interests and that you understand all terms.
Once signed, the buyer typically pays 10-30% upfront as a deposit. This is transferred directly to the owner listed in the certificate.
If the ownership certificate is with a bank, agree on who will settle the remaining balance and wait for the notary's verification before making the final payment.
Yes! Expats can buy property in Bali under certain conditions and with the help of a reputable real estate agency.
Investing in Bali property as a foreigner is one of the best decisions you can make, as Bali's real estate market is currently booming.
With a favourable exchange rate and steady growth in tourism, property values are expected to continue rising.
Low maintenance villas, beachfront properties and luxury villas are popular with foreign buyers. However, there are also many expats who choose to purchase land and build their own dream home in Bali.
Yes. You can legally own property in Bali through various ownership models. Just make sure you understand the regulations to ensure compliance.
Some Indonesian banks do offer financing options for foreigners purchasing property in Bali. However, the loan amount is usually limited. Your best option is to secure financing from your home country or seek out a private lender.
Ongoing costs vary greatly depending on the title, size and location of the property.
However, some common costs include annual land taxes and building permits, as well as monthly costs for utilities, maintenance and management fees for villas or rental properties.
It's important to budget for these expenses when considering purchasing a property in Bali.
Above all else, your real estate agent should be trustworthy and certified.
They should also have experience and a thorough understanding of the local market, as well as connections with developers, contractors and other professionals.
It's also beneficial to work with an agent who offers full-service support for all aspects of purchasing property in Bali.
We're thrilled that you've decided to explore the possibility of purchasing property in Bali as a foreigner.
It's an exciting and rewarding investment opportunity that can bring you years of enjoyment or generate income through rental properties. With the help of a reputable real estate agency like Yolla Realty, we believe that buying real estate in Bali can be a smooth and stress-free process.
We hope this guide has provided valuable information to help make your dream of owning property in Bali a reality. Good luck!
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