Buying Property in Bali: Essentials for Foreigners

Bali, renowned for its stunning landscapes and cultural charm, has emerged as a hotbed for foreign property investment. This guide is designed to lead you through the intricate process of buying property in Bali while ensuring a secure and legally compliant transaction.

Whether captivated by the island’s allure or seeking a sound investment opportunity, understanding the nuances of all the technicalities will benefit foreign property ownership in Bali.

Can Foreigners Buy Property in Bali?

Navigating the landscape of foreign property ownership in Bali involves three key permits:

1. Right to Build (Hak Guna Bangunan/HGB)

This permit enables you to construct buildings on leased land, with leases extending up to 80 years.

2. Right to Use (Hak Pakai/HP)

Right to Use title allows you to utilize properties already built on land with a tenure of 25 years, renewable for up to 70 years.

3. Right to Own (Hak Milik/HM)

Land ownership with a full, unrestricted title is limited to Indonesian citizens and legal entities.

How to Buy Property in Bali Safely

The safest option to buy a property in Bali for foreigners is using their company name. Therefore you are encouraged to set up a foreign-owned company in Bali before purchasing your desired property.

Setting up a Foreign-owned Company in Bali

By forming a foreign-owned company (PT PMA), foreigners can acquire HGB or HP. This avenue not only provides security but has gained popularity due to its advantages:

1. Extended Ownership

HGB offers a tenure of up to 80 years, allowing for long-term investment and development.

2. Renewable Rights

HP can be renewed for an additional 70 years, providing the potential for multi-generational ownership.

3. Transference and Leasing

These permits can be transferred or leased to others, ensuring flexibility for future arrangements.

4. Indonesian Buyers

HP permits can be sold to Indonesian nationals, broadening exit options.

Process of Buying Property in Bali

The procedure for acquiring property in Bali through a foreign-owned company involves several stages:

1. Document Submission

Submit comprehensive forms and supporting documentation to the Indonesian National Land Office (BPN).

2. Compliance Checks

Fulfill the conditions for Hak Pakai, including a valid building permit (IMB) and proof of land payment.

3. Approval and Issuance

The BPN will grant a Hak Pakai under your PT PMA’s name upon satisfying requirements.

4. Legal Requirements for Foreign Property Buyers

For those purchasing property in Bali not for business or commercial use, adherence to the following guidelines is necessary:

1. Residency Status

Only foreigners with valid KITAS/KITAP permits can proceed with the property ownership process in Bali.

2. Minimum Property Value

Based on the recent legal requirements, a property value must meet the minimum the Ministry of Agrarian Affairs set.

3. Ownership Limit

Foreigners with KITAS/KITAP are restricted to owning a single property.

Things to Avoid when Buying Property in Bali

The intricacies of property acquisition in Bali demand vigilance. Employ these proactive strategies to evade potential pitfalls:

1. Thorough Due Diligence

Conduct comprehensive background checks to identify any unsettled taxes, legal disputes, or other issues.

2. Residency Compliance

Avoid being absent from Indonesia for over a year to prevent potential property confiscation.

3. Marital Agreements

Acknowledge that ownership of Hak Milik remains with the Indonesian spouse; safeguard your investment with a prenuptial or postnuptial agreement.

How InCorp Indonesia Can Help

To adeptly navigate the complexities of property acquisition in Bali, seeking expert advice is paramount. InCorp Indonesia offers professional legal assistance and can guide you through each step of the process. Consult our experts at our Bali, Jakarta, Semarang, Surabaya, and Batam offices, or complete the form below to receive personalized guidance and ensure a secure and successful property investment journey.