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Things to Consider About Before Investing in Bali Real Estate

Investing in Bali real estate, Indonesia, may appear to be a difficult challenge, given the complex property regulations, licenses, titles, and bureaucracy that must be navigated. If you believe it’s difficult to buy property in Indonesia right now, think again. This is especially true for foreigners. There are a few crucial things to consider before investing in Bali real estate so that you won’t look back on your decision later.

Things to Consider About Before Investing in Bali Real Estate

The Type of Land Titles

There are three types of land titles that you should be aware of.

Freehold or Hak Milik

The term “freehold” or “Hak Milik” refers to a title that can only be owned by Indonesian citizens. It will be automatically declared void if you are a foreigner and attempt to possess a freehold land, in which case the land will instantly become the property of the government.

Right of Use or Hak Pakai

The ideal choice for a foreigner is a secondary title called “Right of Use” or “Hak Pakai”. The title has a 25-year built-in extension and can be renewed after 20 years with little tax consequences. The size of your land and property are two limitations, and you need a KITAP or KITAS in order to stay in Indonesia.

Right to Construct or Hak Guna Bangunan

The third title is a commercial title called “Right to Construct.” which means “Hak Guna Bangunan”. Only international and Indonesian businesses that purchase, sell, or manage villas for commercial use are required to use this title.

Paperwork and Real Estate Transactions

Remember that real estate transactions must be open and fully paid for in accordance with Indonesian legislation. A legally authorized officer must be available to monitor the legal transaction. The property must also be paid for in full, according to the legislation. This indicates that if you are unable to finish the payment, the deal will not go through.

After that, you must run a Property Title Background Check. You’ll require the original certificate of ownership in order to do this. Without the original paperwork, it is impossible to establish or verify the property’s legal status.

Background checks are crucial since they will inform you of any problems, missed payments, the current state of the Bali properties, and their ownership.

The Zoning Line

When purchasing property in Bali, zoning regulations apply. Make sure the property on which you are building is in the authorized zone so that you may get a building permit (IMB).

You cannot construct on property that is categorized as a “Green Belt,” for instance. If you are doubtful, always get legal advice.

Don’t forget to request copies of the following documents from the seller:

  • Copy of Kartu Tanda Penduduk (KTP) of the seller and his/her spouse.
  • Family card (Kartu Keluarga/KK).
  • Marriage Certificate (or Death Certificate if the spouse has passed away).
  • Original certificate of land ownership.
  • PBB tax payment, called SPPT PBB.
  • NPWP, or the seller’s tax number.