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Looking to get your own piece of paradise in Bali? Bali is a popular destination for tourists and investors, with its stunning scenery and unique culture.
As a foreigner, you can’t own land outright in Bali but can own property through a company or via an Indonesian citizen. The safest way for foreigners to buy land or property in Bali is through a foreign-owned company (PT PMA) and obtaining the Hak Guna Bangunan certificate (Right to Build).
To buy land in Bali, foreigners need to follow specific regulations and procedures. The process can be complex, especially for foreigners. As an expert with years of experience helping foreigners buy land in Bali, I’ll provide you with all the necessary guidance and support throughout the entire process. So, if you’re looking to buy property in Bali, I’ll guide you through the process of buying land in Bali, including the legal requirements and potential pitfalls.
Key Takeaways
- Have a clear understanding of the laws and regulations governing Bali property ownership.
- Have a solid understanding of the local property market, property prices, and demand.
- Land zoning and road access will impact your ability to use or develop your land.
- Working with an experienced agent will help you maneuver regulations and restrictions.
- You'll need to pay taxes on your property and may be subject to additional regulations.
Table of Contents
How to Buy Land in Bali
Bali is a popular destination for foreign investors due to its beautiful scenery, culture, and fast-growing economy, which tend to attract many foreign investors.
Before you acquire land, it's important to note that Indonesian law prohibits foreign nationals from owning freehold land in Bali. However, you can easily acquire a property using the Right to Use (Hak Pakai) or Right to Build (Hak Guna Bangunan) certificates.
The safest way for foreigners to buy land or property in Bali is through a foreign investment company or a foreign-owned company (PT PMA) and acquiring the 'Right to Build' ( also called the Hak Guna Bangunan) certificate. Besides companies, you can also acquire land through Indonesian citizens.
The Hak Guna Bangunan certificate allows you to own the building on the land for a period of 30 years, with the possibility of extending it for another 20 years.
As an expatriate, you also have the option to acquire a Hak Pakai certificate. Unlike Hak Guna Bangunan, which only allows you to own property under the name of a legally registered company or an Indonesian citizen, the Hak Pakai certificate allows you to hold the property under your name.
According to Article 51 of Indonesian Government Regulations, the following land can be granted Hak Pakai or Right to use:
- Land owned by the state
- Land with the right to manage
- Land with the right of ownership
As you can see, the process of buying land in Bali can be complicated because there are a lot of details to take into consideration.
Before you purchase property, understanding the legal aspects and regulations is important if you want to avoid any potential problems. In fact, I recommend that you seek a professional to help you acquire land. That way, you’ll avoid confusion and potential problems in the future.
Here is a step-by-step process for buying land in Bali:
- Determine the type of land ownership you want. You can consult with local real estate agents or visit the Indonesian national land office for more clarifications.
- Find a property and acquire land or land plots through a foreign investment company.
- Check legal aspects before you acquire property.
- Make an offer and transfer the money
- Develop your land; ensure you have a building permit from the local government.
- Lastly, enjoy your dream villa in Bali. You can either use the property as a rental property or for your personal use.
Bali has one of the world's fastest land price growth rates, making it a great investment opportunity for foreign buyers.
Understanding Bali Land Ownership Laws
If you're thinking about buying land in Bali, it's important to understand the land ownership laws in Bali. In Indonesia, land is classified as either freehold or leasehold. As a foreigner, you are allowed to acquire property in Bali under certain conditions.
There are two types of land ownership in Bali: freehold and leasehold. Freehold ownership is when you own the land outright, while leasehold ownership is when you lease the land for a certain period of time. Most foreign buyers prefer freehold property ownership, but it can be more difficult to acquire and comes with certain restrictions.
If you’re looking to purchase property, here’s all you need to know about freehold and leasehold properties:
Freehold Property
Freehold property is also known as ‘Hak Milik’ in Indonesia. This type of property ownership is the highest form of ownership in Indonesia.
As a foreign national, you’re not allowed to own freehold land in Bali. However, there are options for you to acquire freehold land in Bali through a Foreign Investment Company (PMA) or by marrying an Indonesian citizen.
Leasehold Property
Leasehold property is also known as Hak Pakai in Indonesian. This type of property ownership allows you to lease land for a certain period of time, usually up to 25 years, with an option to extend.
As a foreigner, you are allowed to lease land in Bali for up to 30 years with an option to extend for another 20 years. It's important to note that leasehold land cannot be converted to freehold land.
When leasing land in Bali, due diligence is crucial. You need to ensure that the land is properly zoned and has all the necessary permits. It's also important to work with a reputable real estate agent and hire a lawyer to help you navigate Indonesian law.
If you’re unsure of anything concerning property laws, please don't assume. Instead, visit the Indonesian national land office or consult with relevant experts.
Land Prices
Land prices in Bali vary greatly depending on the location, zoning, and type of property. Freehold land tends to be more expensive than leasehold land.
Foreign investors are often attracted to Bali because of the relatively low land prices compared to other popular tourist destinations in the world.
However, due diligence is crucial when buying property in Bali to ensure that the land is properly zoned and has all the necessary permits.
All You Need to Know When Building on Your Bali Property
If you're planning to purchase land in Bali and build your dream home, villa, or hotel, you need to know about the building regulations in Bali. Here are some essential things you need to know before you start building on your Bali property.
Building Permit
Before you start building, you need to obtain a building permit (IMB) from the local government. The IMB is a legal document that allows you to build on your land. You can apply for an IMB through the local government office or hire a professional agent to assist you with the process.
Ensure that your building plans comply with local regulations and zoning laws. You also need to submit a detailed building plan, including the floor plan, elevation, and other necessary documents. The approval process can take up to two months, so plan accordingly.
Right to Build
To build on your Bali property, you need to have the right to build. If you're a foreigner, you can't own land in Bali, but you can lease it for up to 30 years with an option to extend it for another 20 years.
The lease agreement should include the right to build on the land and transfer the building to another person or entity.
Right to Use
The right to use is another legal document that allows you to use the land for a specific purpose. You must have the right to use the land before applying for an IMB. The right to use can be obtained through a land lease agreement or a certificate of ownership.
IMB and Green Zoning
The IMB also includes the zoning classification of your property. Bali has three zoning classifications: green, yellow, and red.
Green zoning is for agricultural land, and building is not allowed on these lands. Yellow zoning is for residential and commercial areas; the building is allowed with certain restrictions. Red zoning is for protected areas, and the building is strictly prohibited.
Make sure that your property is in a yellow or red zoning area before you start building. If your property is in a green zone, you need to apply for a zoning change before obtaining an IMB.
Choosing the Right Agent
When choosing real estate agents in Bali, it’s important to research and choose wisely. Get a real estate agent with a good reputation and track record. Here are some things to consider:
About THE AUTHOR
Brittany Melling
Brittany has been in the land business since 2020 when the world was starting to shut down. Since then, we’ve sold to dozens of people from ATV weekend warriors to camping enthusiasts to retired truck drivers. Our inventory spans mostly in the western United States. We’ve been trained by experience, land acquisition courses, and hundreds of hours meeting with county assessors and clerks, zoning officials, realtors, and land investors. We’ve answered hundreds of questions from people regarding the buying and use of land.
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