In the picturesque land of Bali, where azure waters meet lush green landscapes, many foreigners dream of owning a slice of paradise. The good news is that in 2024, it is indeed possible for foreigners to buy property in Bali. However, as with any real estate venture abroad, there are certain restrictions and guidelines that must be followed.
In this comprehensive guide, we’ll explore the intricacies of property ownership for foreigners, including the process of buying property in Bali, legal requirements, and areas to be aware of.
Also read: Reasons Why Owning Property in Bali is Very Profitable
Can Foreigners Buy Property in Bali?
Yes, foreigners can buy property in Bali in 2024, but there are some restrictions.
Certain property titles or rights are available for purchase and ownership by foreign individuals in Bali. These include leasehold and right-to-use titles, while freehold titles are restricted to Indonesian citizens. Even 100% domestically owned companies cannot acquire freehold titles.
However, an exception exists for the ownership of apartments by foreigners, although the underlying land remains excluded from ownership. Yet, this is uncommon in Bali, as most apartments are typically sold as leasehold.
Also read: Mistakes When Buying Property in Bali: 9 Things to Avoid
Foreigners cannot own land in Indonesia outright
Instead, they can only acquire property through a foreign-owned company known as PT PMA. This company must be registered with the Indonesian Investment Coordinating Board (BKPM). The PT PMA can then obtain one of two titles for the property:
- Right to Build (Hak Guna Bangunan/HGB): This title allows the foreign owner to construct buildings on leased land, with leases extending up to a substantial 80 years.
- Right to Use (Hak Pakai): The HP title permits foreign owners to utilize properties already built on land with a tenure of 25 years, which is renewable for up to 70 years.
Also read: Can a PMA Own Land and Properties in Indonesia?
Property Titles Available to Foreigners in Bali
Leasehold or Hak Sewa
- This is a straightforward form of property ownership for foreigners in Indonesia.
- It is not registered with the Indonesian land agency but is considered a secure ownership form.
- A valid passport with a current stay permit, such as a tourist or business visa, is sufficient for purchase.
- There is no legal limit on the number of leasehold properties one can buy.
- Leasehold terms typically range from 25 to 30 years, with the possibility of extension.
Right of Use or Hak Pakai
- This is a valuable property title for foreign investors.
- Qualification requires a temporary or permanent residential permit (KITAS or KITAP) or a retirement visa for those aged 65 and above.
- Ownership is restricted to properties with buildings, preventing speculation on bare land.
- The initial term is 30 years, extendable by two terms of 20 years each with a government fee.
When purchasing a right-of-use title, the original freehold title is surrendered and replaced, bearing the buyer’s name. Interestingly, upon selling to an Indonesian citizen, the title can convert back to freehold, allowing for similar capital appreciation as a freehold title.
Right to Build or Hak Guna Bangunan
- Reserved for Indonesian companies, whether owned by Indonesian or foreign shareholders.
- Forming a foreign investment company (PT PMA) is a quick process, allowing for efficient business establishment.
- The right-to-build title functions similarly to the right-of-use title in terms of duration and extensions.
Given the evolving policies, it’s crucial to stay informed about the latest regulations. For specific details and guidance on establishing a foreign investment company and property investment, contact our team of real estate experts.
Also read: Buy Your Property in Bali with PT PMA
Best Area for Property Investment in Bali
Here are some of the best areas for property investment in Bali:
Canggu
Canggu is a popular beach town located in the southwest of Bali. It is known for its laid-back atmosphere, trendy restaurants and cafes, and surf spots. Property prices in Canggu have been rising steadily in recent years, and it is considered to be a good investment for the future.
Seminyak
Seminyak is another popular beach town located in the southwest of Bali. It is known for its high-end boutiques, luxury hotels, and nightlife. Property prices in Seminyak are also relatively high, but the area is considered to be a safe and secure investment.
Ubud
Ubud is located in the central highlands of Bali. It is known for its lush rice terraces, traditional villages, and spiritual atmosphere. Property prices in Ubud are more affordable than in Canggu or Seminyak, and the area is considered to be a good investment for those who are looking for a more relaxed lifestyle.
Jimbaran
Jimbaran is located on the southern coast of Bali. It is known for its seafood restaurants and beautiful beaches. Property prices in Jimbaran are still relatively affordable, and the area is considered to be a good investment for those who are looking to rent out their property to tourists.
Nusa Dua
Nusa Dua can be found on the southeastern coast of Bali and is known as a resort area. It is known for its luxury hotels and golf courses. Property prices in Nusa Dua are the highest in Bali, but the area is considered to be a safe and secure investment.
Also read: The 9 Best Area for Property Investment in Bali
Restricted Areas for Property Investment in Bali
While Bali offers an array of captivating locales for property investment, it’s crucial to be aware of certain areas that are off-limits to foreigners due to military and strategic purposes. These restricted zones include:
Nusa Penida
Encompassing the islands of Nusa Penida, Nusa Lembongan, and Nusa Ceningan, this area is strategically positioned near the Lombok Strait. Nusa Penida is strategically positioned near vital waterways, making them significant for national security.
The Gili Islands
Comprising Gili Trawangan, Gili Meno, and Gili Air, these islands are also situated near the Lombok Strait and are popular tourist destinations. Like Nusa Penida, the Gili Islands are also strategically positioned near vital waterways, making them significant for national security.
Besakih Temple Complex
This sacred Hindu temple complex is considered a national heritage site and is off-limits for property ownership.
Ngurah Rai International Airport Area
Given its significance as the main airport in Bali, this area is considered a strategic asset for the Indonesian government.
Canggu Military Base
As a military installation, the Canggu base is reserved for the Indonesian military.
Singaraja Military Base
Similar to Canggu, the Singaraja military base is also exclusively used by the Indonesian military.
It’s important to note that these are just a few examples of restricted areas in Bali. There may be other undisclosed zones, so consulting with a legal expert or a property agent well-versed in Indonesian property laws is advised.
Also read: Bali Property Market: 2024 Outlook and Insights
Additional Considerations
Obtaining an Indonesian Tax Identification Number (NPWP)
Before diving into the property market, foreigners must acquire a valid Indonesian Tax Identification Number (NPWP). This number is essential for tax purposes and is a prerequisite for property ownership.
Also read: Bali Property Tax: 2024 Complete Guide
Local Government Registration
Property must be registered with the local government. Compliance with local regulations ensures that your property ownership is legally recognized.
Financial Responsibilities
Be prepared to shoulder financial responsibilities such as property taxes and other fees, which are standard in any real estate transaction.
Building Permits
If you plan to construct on the property, you may need to obtain a building permit from the local government. This is a crucial step to ensure that your construction complies with regulations.
Also read: 4 Things You Should Know Before Buying Property in Bali
How to Buy Property in Bali as a Foreigners
The process of buying property in Bali as a foreigner involves several steps:
Consult with a lawyer or property agent
Seek professional advice from experts well-versed in Indonesian property laws and regulations.
Obtain a valid Indonesian Tax Identification Number (NPWP)
As mentioned earlier, securing an NPWP is a prerequisite for property ownership.
Set up a foreign-owned company (PT PMA)
Registering a PT PMA is essential for acquiring property in Bali as a foreigner. You can rely to us for For a simple and hassle-free PMA Incorporation for Foreign Property Acquisition.
Chat with us for FREE consultation and get a special package!
Find a property
Conduct thorough research and enlist the help of a property agent to identify suitable properties.
Make an offer
Once you’ve found your ideal property, negotiate and make an offer to the seller.
Sign the sales contract
Engage a legal expert to draft and review the sales contract to protect your interests.
Pay the down payment
After signing the contract, pay the required down payment to secure the property.
Close the sale
Complete the transaction by finalizing the payment and transferring the property title to your foreign-owned company.
Also read: PT PMA vs Non-PT PMA: Buying Property in Bali Compared
In conclusion, while the dream of owning property in Bali as a foreigner is achievable, it comes with specific guidelines and legalities that must be meticulously followed. Respect the restrictions in place, seek expert guidance, and ensure compliance with all regulations to make your Balinese real estate investment a reality.
If you have further questions, don’t hesitate to chat with us!
FAQs
Can a foreigner own property in Bali?
Yes, foreigners can buy property in Bali, but there are restrictions. Foreigners cannot own land outright. They can only own property through a foreign-owned company (PT PMA)
How long can you own a property in Bali?
Foreign ownership through a PT PMA allows owning property for the length of the lease, which can be up to 80 years for Right to Build and 30+70 years for Right to Use.
Is it possible to buy a villa in Bali?
Yes, foreigners can buy villas in Bali. They can either buy an existing villa with Right to Use title or buy land with Right to Build and construct a villa.
Can a foreigner build a villa in Bali?
Yes, foreigners can build a villa in Bali if they acquire land with Right to Build title through a PT PMA company. They will also need to obtain a building permit.
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