Welcome to our comprehensive guide on the legalities and regulations governing Bali’s real estate market. Here, we demystify the rules and provide essential information for prospective villa owners, ensuring a seamless and legally-compliant property investment journey.
1. Foreign Ownership in Bali: An Overview
While direct freehold ownership is restricted for foreigners in Indonesia, alternative structures like leasehold agreements and “Hak Pakai” (Right of Use) permit foreign investors and residents to hold property rights.
2. Leasehold vs. Freehold: What’s the Difference?
Freehold gives the owner complete and lifelong ownership rights, while leasehold grants rights to use the property for a specific duration, typically 25-30 years, extendable for another period upon agreement.
3. “Hak Pakai” – The Right to Use
An attractive option for foreigners, “Hak Pakai” grants rights similar to leasehold but comes with the ability to reside in the property. It’s renewable and can be held for an initial period of up to 80 years.
4. Property Taxes in Bali
All property owners, including foreigners, are subjected to property taxes which are calculated based on the property’s declared value.
5. The Role of Notaries
A certified notary is indispensable in property transactions. They ensure all documents are legal, offer advice on contracts, and oversee the proper transfer of property rights.
6. Restrictions on Property Size and Location
Certain regions in Bali have restrictions on the minimum land size for foreign ownership. Additionally, properties must be located a specific distance from main roads or beaches, ensuring the region’s beauty and heritage are preserved.
7. Due Diligence: An Essential Step
Before finalizing any property purchase, thorough due diligence is crucial. This process ensures there are no legal complications or hidden liabilities with the property.
8. Selling Your Property as a Foreigner
Foreign owners can sell their property, but it’s essential to adhere to regulations, especially if the property was acquired through “Hak Pakai.”
Stay Informed & Stay Secure
While Bali offers tantalizing property opportunities, being well-informed of the legal landscape is essential. We always recommend consulting with experts and familiarizing oneself with the latest regulations.