How to buy Land or Villa in Bali
By buying a land/villa in Bali, you can choose the property that is really matching with you requirement and take time to compare the best option for you and your family.If you are foreigner or Indonesian citizen, we will assist you during all the process to own your property in Bali Island.
- Primary residence: If you already decided to come and live in Bali, Villa Bali Tropic Team can help you in each step of your project.
- Second home: If you want to have a second Home in Bali, Villa Bali Tropic Team can assist you to find the right place and even manage your property when you are not in town.
- Investment property: If you want to make an investment in Bali, our Villa Bali Tropic Team is here to give you all the information for the best ROI.
How to acquire a property in Bali Island Indonesia?
The 4 options for foreigners
Before choose the best way for a foreigner to acquire a land in Bali or generally in Indonesia, he must first understand the Land Code of Indonesia. 3 different important rights are detailed: the Right of usage (Hak Pakai), the Right of Lease (Hak Sewa) and the Freehold (Hak Milik). A foreigner can just access to the Right of usage and Right of Use but can use an Indonesian Nominee with different contracts to be able to indirectly own his own land and secure his investment.
- Using an Indonesian representativeFirst of all, we do not recommend to our clients to use any form of nominees to acquire a land in Indonesia.
The Indonesian nominee will acquire the land for the foreign buyer. Ownership of land is transferred from the previous owner to the Indonesian representative. Once the land is bought, the foreign buyer must make three agreements with the Indonesian representative to ensure that the investment is secured.
(a) Loan Agreement: This agreement states that the foreign buyer lent the purchase price to the Indonesian representative.
(b) Irrevocable Power of Attorney: The POA gives the foreign buyer full authority to sell, lease, or mortgage the land.
(c) Permanent Right of Use Agreement: This agreement gives the foreign buyer full rights to the use and occupancy of the land.
A foreign national can also acquire land in Indonesia with a leasehold title. This is ideally granted to qualified foreigners who are domiciled in Indonesia with a KITAS working visa. The lease runs for 25 years, and can be renewed for another 25 years.
- Right of Use (Hak Pakai or SHP)
This title can be held by individual foreigners residing in Indonesia, representative offices of foreign institutions or foreign embassies. The title can be granted for a maximum validity period of 30 years and is extendable for another 20 years and it is extendable for another 30 years. Generally, foreign individuals or foreign companies that are not registered under Indonesian laws enjoy the Right of Use only ( Right of Use or Hak Pakai).
- Using a Company with foreigner Investment(PMA)
Another way to acquire land in Indonesia is through a PMA, which is a status of doing business in Indonesia. A PMA company has 30 years to operate after formation. It can be granted additional 20 years, and another 30 years, if it expands its project through additional investment. This can be 100% controlled by a foreigner. Once you have a PMA status, you will get the Right to Build (Hak Guna Bangunan – HGB). The right to build or construct a house on a particular land is valid for 30 years. This can be extended for an additional 20 years, and even for another 30 years after that. We will discuss the requirements to set up a PMA company later in the article.
If you decide to buy a property in freehold in Bali Island, you will have to choose by 2 different ways:
- 1. Buy / Lease a villa already built.
Advantage: The villa is directly ready to use and you not wasting the time of building process, If you have no time to develop your own design it can be a better option, You can directly see if the proportion of the villa matching with the environment and the land and use the talent of the architect and builder. if there is no land available in the area you want, this can be the unique option.
Inconvenient: You can not build the villa that you exactly want and you will probably have to deal with some default in the architecture or other detail that could not match with your personal feeling… but do not worry we will assist you to make the right choice according to your objectives.
- 2. Buy a land and build your dream villa.
Advantage: You can really expect to get the villa of your dream and use all your personality in your project.
Inconvenient: It take time to build a villa (between 3 to 6 month according to the project) and you will need to choose many technical things, like painting, ceramic, designs for each room… but don t worry we are here to assist you at all the step if you require our point of view.
In most of the case, to acquire a land or a villa:
1. Foreigners are using the leasehold and can lease the land/villa for a period total of 70 years (initial term of 25 years + an extension of 25 years + a final renew of 20 years).
2. Freehold has no limits in the time and the Indonesian Nominee will acquire the land/villa for the foreign buyer. The ownership of the land/villa is transferred from the foreign owner to the Indonesian representative.
These 2 ways offer you the way to acquire the villa of your dream as a first home, second home or as an investment. Villa Bali Tropic Team will be here to assist you in your project.
The right information at the right moment!
At Villa Bali Tropic, our Team will first analyze your situation and use the service of our Notary and Lawyer to offer you the most complete information.
Because everybody is different, it is important to use a service of a professional team to choose the right way for your project.
We are here to give you the right information and offer you a complete analyze with our professional Team to make your project become true and secure your investment with the law.
At Villa Bali Tropic, this is our responsibility!
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