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How foreigners can buy property in Bali

Posted by Cuan Bali Land on May 16, 2024

Bali is one of Southeast Asia’s most popular tourist destinations for years, so it’s no wonder many people dream about owning property in the tropical island of Bali. The dream doesn’t have to stop there because foreigners can buy and own land and property in Bali. Bali is a provinces of Indonesia, It make the law to owning property for foreigners is under Indonesian law.

How foreigners can buy property in Bali ?

First you need to know that the right of fully owning land or property in Bali is called Hak Milik (HM), which is a form of ownership only Indonesian citizen can get. In English, Hak Milik means ‘Right to Own’ and applies to land and real estate structures.

Foreigners can buy property in Bali through various methods such as investing in property through a PT PMA, buying leasehold property, acquiring property under a Hak Pakai or Hak Guna Bangunan title, purchasing with a passport, or using an Local nominee. Each method has its own set of regulations and requirements, providing foreigners with options to navigate the Bali real estate market.

  1. Buy property through a PT PMA ( Indonesian company with foreign ownership) – Foreign investors can establish a PT PMA in Bali to acquire freehold or leasehold property, making it one of the safest ways of property ownership. This allows them to obtain an Investor KITAS, a two-year residency permit. Setting up an PT PMA takes a couple weeks and costs around IDR 10-20million, Legal agents in Bali can assist in creating a PT PMA. When you buy property under PT PMAs, the land title is Hak Guna Bangunan (HGB), allowing you to build and own property on leased land. PT. PMA also will be required when you want to build any business that operate in Bali from Spa, Bar, Restaurants, Day club ,Travel agent & etc. For running bussiness, another license may applied depend on the sectors that you want to do.
  2. Buy leasehold property – Foreigners can own real estate in Bali through a leasehold agreement, which grants them the right to own and use the property for a specific period, either residential or commercial. This option is often cheaper than freehold ownership. Many foreigners use this to lease land and build a house on it. Leasehold agreements typically last 25 years and can be extended for up to 80 years.
  3. Buy property under Hak Pakai Title – Hak Pakai (HP) is a title that grants foreigners and Indonesians the right to buy and use property. It applies only to specific buildings or units and requires a residency permit in Indonesia. Property holders can transfer their land title to Hak Pakai if eligible, and the certificate is valid for 30 years and can be extended to 80 years. The title can be sold or transferred to another eligible foreigner as long as it’s valid.
  4. Buy property using passport – In 2023, the Indonesian government allowed foreigners to buy property with a passport, without a residency permit or foreign-owned company. The maximum size of the property is 2,000 m2, and the minimum value in Bali is IDR 5 Billion.
  5. Buy property using local nominee – Foreigners can buy property in Bali through Local nominee, it will get the property with Hak Milik title, the highest form of property ownership. But it will mean the local nominee will officially owns the property, with an agreement between the foreigner and the nominee stating the foreigner as the actual owner. The local nominee remains the legal property owner according to Indonesian real estate law. Nominees can only be used for business purposes and cannot bypass foreign land ownership bans. If discovered, the government may reclaim the property.

Can foreigners own a land in Bali through marriage ?

Indonesian citizens married to foreigners may lose their Hak Milik rights under the Indonesian Marriage Law of 1974. This is because foreigners do not have the right to Hak Milik. To avoid losing property rights, couples can sign a prenuptial agreement to share assets, such as a postnuptial or post-marital agreement. This agreement is valid and allows the Indonesian spouse to buy and own property in Indonesia, while the foreign spouse can purchase and own it when the Indonesian spouse lawfully possesses it.

Step by step buying property in Bali :

  1. Establish a PT PMA – Establish with the Indonesia Investment Coordinating Board (BKPM). This process can be time-consuming and complex, you can choose many local agencies to simplify it.
  2. Use a professional Bali real estate agent to save time and energy, gain access to a broader range of property listings, and negotiate the purchase or sale of the property.
  3. Search for a property by considering location, size, materials, and style. If you using agent like us Cuan Bali Land, we also able to pre check The ITR ( Izin Tata Ruang) zone of the property its crucial to understand the Bali Land layout and purpose, so later you can use it for business or not.
  4. Check the property licenses before negotiating the price or proceeding with the purchase. Request the Certificate title of the Property and Building Approval (PBG) from the seller. Conduct due diligence to avoid legal issues and ensure the worth of your investment.
  5. Sign the AJB ( Akta Jual Beli ) or Sales Purchase Agreement in english and make a downpayment. The AJB is a legal document outlining the obligations of both the buyer and seller in a property transaction, and must be signed in the presence of a public notary authorized for the area (PPAT).
  6. Finalize the transaction by transferring ownership from the seller to the buyer, done in the presence of a public notary. Before the transfer, the buyer must pay the Transfer Tax (BPHTB), which is essential for the notary to sign the agreement. Buyer will paid 5% and the seller will paid 2,5% tax, outside notary fee.This applied for local and foreigner.
  7. Note that each property has an NJOP (Nilai Jual Objek Pajak), which determines the amount of property taxes that must be paid, some sellers may suggest an unofficial price to minimize taxes either using the real purchase price or NJOP depend wich one is lower. After completing payment and tax obligations, the public notary will transfer ownership to the buyer, who will receive a Certificate of the Property.

    Ready to buy property in bali ?

    We can assist you in buying property in Bali, ensuring a smooth journey. With good knowledge and local experience, we can help with legal requirements, property selection, negotiation, and due diligence. Just contact us in [email protected], need to check our reviews, its avaible on here.

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