Buying Property in Bali: A Foreigner's Guide

TEMPO.CO, Jakarta - The enchanting natural beauty of the Land of the Gods, Bali, has captivated countless visitors. That include a growing number of investors.

The lure of owning a property or buying a home in Bali has sparked widespread interest among foreigners. The prospect of buying property in this tropical haven is exciting but it is important to understand the legal framework.

This guide, cited from various property websites, outlines the steps involved in buying property in Bali, especially for foreigners.

Finding Your Bali Property

The first step to owning a piece of paradise is finding the perfect property. Bali's real estate market is divided into zones, each with specific regulations. Understanding the zoning of your desired property is crucial.

Make sure that the property has clear ownership rights and no outstanding tax liabilities. Conduct thorough due diligence to avoid potential legal and financial complications.

Establishing a PT PMA

To own property in Bali as a foreigner, you must set up a PT PMA, a limited liability company approved by the Indonesian government. Unlike Indonesian citizens, foreigners can only buy property in Bali through a company.

Establishing a PT PMA can be complex and involves navigating bureaucratic processes with the Indonesian Investment Coordinating Board (BKPM). To simplify this process, many foreigners choose to use local real estate agencies with expertise in real estate investment and company formation.

Checking Property Licenses 

A crucial step on how to buy a house in Bali, especially for foreigners, is to carefully examine the legal documentation of the property. Indonesia has specific land ownership and building permits, such as the Hak Guna Bangunan (HGB) or Right to Build and the Hak Pakai (HP) or Right to Use.

Citing information on the Ministry of Public Works and Public Housing's website, a HGB legitimizes construction. Therefore, it is mandatory that the seller provide this important document to avoid future legal complications.

Signing the Sales and Purchase Agreement (SPA)

A legally binding contract between the buyer and seller, the SPA outlines the terms and conditions of the real estate transaction. This document must be signed in the presence of a notary public. A deposit of 10-30% of the total purchase price is usually required at this stage.

It's important to carefully review the SPA to fully understand its terms and to protect your interests.

Finalizing the Property Purchase 

Once the buyer has paid the required transfer taxes, the final stage of the transaction can proceed. A public notary will oversee the transfer of ownership from the seller to the buyer and the new ownership will be registered with the National Land Agency. The buyer will then receive a property certificate detailing the ownership information.

Owning property in Bali is possible for foreigners but the legal process can be complicated. To ensure a smooth transaction, it's highly recommended to use a professional real estate agency with expertise in Bali property law.

Vidya Amalia

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