Acquiring real estate in Bali for foreign buyers entails a thorough understanding of the local laws and specific legal processes. Explore this guide for a detailed understanding, ensuring you’re well-prepared at every stage.
Foreigners are not permitted to directly hold freehold property in Indonesia. However, there are legal frameworks that enable property acquisition in Bali. The primary land titles to know are:
Hak Milik (Right to Own): Restricted to locals with citizens.
Hak Pakai (Right to Use): Accessible for foreign ownership under certain conditions.
Hak Guna Bangunan (Right to Build): For commercial or residential use through a foreign-owned company.
The leasehold model is a popular choice for foreigners. It provides the legal right to utilize property or land for a fixed duration, typically from twenty-five to thirty years, with renewal options. While you won’t own the land, leaseholds provide long-term usage permissions.
Hak Pakai grants foreign nationals the ability to occupy land for living purposes. This entitlement remains valid for thirty years, with the option to extend for an extra twenty years, offering a more secure option recognized under Indonesian law.
Foreigners looking to invest in commercial ventures like hotels or rental properties can open a foreign-owned company (PT PMA). This enables the acquisition of Hak Guna Bangunan title lasting thirty years, with a twenty-year extension option and a renewal for another thirty years.
Proper due diligence is critical before concluding the purchase of any property. Make sure the following:
1. Set up a PT PMA
Contact the Indonesian Investment Coordinating Board (BKPM) or a regional consultant to set up your PT PMA. This option permits foreigners to own leasehold or commercial properties.
2. Work with a Professional Real Estate Agent
Exploring Bali’s real estate market often involves complexities. A reliable agent will help pinpoint the right properties for you, work out terms, and protect your interests. Consider contacting DDA Real Estate for expert guidance.
3. Obtain a Tax Identification Number (NPWP)
Obtaining an NPWP is essential for tax compliance and property transactions in Indonesia.
4. Find the Perfect Property
Work with your agent to locate properties that align with your goals and budget. Key investment hot spots include Seminyak, Sanur, Kedungu, etc.
5. Sign the Sales Purchase Agreement (SPA)
Complete the SPA with the help of an authorized notary. Carefully check all aspects before signing the agreement. An initial payment of 10–30% is typically required.
6. Complete the Payment and Finalize Ownership
After signing, pay the balance and transfer the property deed to your foreign-registered company.
At DDA Real Estate, we specialize in guiding foreign investors through the complexities of purchasing property in Bali. From understanding legal frameworks to securing the perfect property, we provide end-to-end support tailored to your needs.
