A Practical Guide to Buying Property in Bali for Foreigners in 2024

Ah, Bali! The land of enchanting beaches, mesmerizing culture, and yes, a hotspot for property investors and dream-home seekers from across the globe. If you’re eyeing this island paradise for your next big investment or a cozy nook to call your own, buckle up! We’re diving into the ins and outs of buying property in Bali as a foreigner in 2024. This guide is peppered with insights, tips, and the latest trends to make your property journey as smooth as a Bali beach breeze!

Understanding the Bali Property Buying Process

Starting with the basics, let’s explore the typical journey you’ll embark on when buying property in Bali your slice of paradise:

1. Property Selection (1–2 days): Whether it’s hotel apartments, residential complex flats, or beachfront villas, Bali offers a diverse array of properties. Set aside a couple of days to explore and select the one that sings to your soul.
2. Payment Options: Got your eye on that dream property? Great! Now, how do you want to pay for it? You can pay in full upfront or opt for installments if you prefer spreading the cost over time. Some sellers even accept cryptocurrency, adding a modern twist to traditional buying methods!
3. Object Reservation (5–10% of the value): Once you’ve chosen your property, you’ll make a reservation payment. This not only secures your chosen property but also starts the formal buying process.
4. Memorandum of Understanding (MOU) Agreement: This legally binding document is signed between you and the seller to confirm the sale’s terms. Typically, this involves a deposit that solidifies your intent to purchase.
5. Final Payments and Notary Registration: After settling the payment—be it a lump sum or the final installment—your purchase contract is officially registered with a notary. This step is crucial as it legally records the transaction.
6. Title Deed Acquisition and Key Transfer: Finally, the title deed is issued, and the keys are handed over, marking the completion of your property purchase in Bali.

Photo by Jared Schwitzke on Unsplash

Forms of Land Tenure in Bali

When buying property in Bali, understanding the local land tenure forms is crucial:

• Hak Sewa (Leasehold): Common for foreign investors, this gives you a lease on the property for 25 to 30 years.
• Hak Pakai (Right to Use): Offering a longer tenure, this can be extended up to 80 years and is a popular choice for those looking for more permanence.

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Property Ownership Forms Subject to Property Transfer Tax

In Bali, several property ownership forms are subject to property transfer tax:

• Hak Milik (Freehold): The most complete ownership form available only to Indonesian citizens.
• Hak Guna Usaha (Right of Economic Use): Allows the use of state-owned land for agricultural, business, or industrial purposes.
• Hak Guna Bangunan (Right to Use Buildings): Permits the construction and use of buildings on land owned by another party.
• Hak Pakai (General Right of Use): Similar to leasehold, it allows long-term use of property.
• Hak Milik atas Satuan Rumah Susun (Ownership of Condominium Units): Pertains to the ownership of individual units within a condominium.
• Hak Pengelolaan (Right of Management): Often held by state or government entities, giving them rights to manage property.

Navigating Bali Property Prices by District

Property prices in Bali vary significantly by district, each offering unique attractions and lifestyle options:

• Canggu: Medium price $160,000; Minimum price $110,000. A favorite among surfers and young expats.
• Nusa Dua: Medium price $300,000; Minimum price $232,000. Known for its luxury resorts and pristine beaches.
• Ubud: Medium price $318,000; Prices range from $72,000 for condos to $108,000 for villas. The cultural heart of Bali, perfect for those who love arts and nature.
• Sanur: Medium price $400,000; Minimum price $328,500. Offers a more laid-back vibe with beautiful beaches.
• Uluwatu: Medium price $221,000; Minimum price $119,000. Renowned for its breathtaking clifftop views and luxury properties.

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Formalities and FAQs

To complete a buying property in Bali, you’ll need:

• Documentation: A passport valid for at least six months beyond the date of the transaction is mandatory. Non-Indonesian documents should be accompanied by a notarized translation.
• Tax and Legal Obligations: When registering property rights, the seller typically pays a 2.5% tax while the buyer is responsible for a 5% tax based on the value of the property. Additional costs for the buyer include an 11% VAT and a 1% notary fee for the transaction process.

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Frequently Asked Questions (FAQs)

Are there any additional tax or legal obligations faced by foreign property owners in Bali?

Yes, when registering the right of ownership or use, the financial responsibilities include a 2.5% tax paid by the seller and a 5% tax on the property value paid by the buyer. Additionally, foreign owners must also cover an 11% VAT and a 1% notary fee during the transaction process.

What is the outlook for the property market in Bali?

The property market in Bali is experiencing robust growth. Over the past year, there has been a significant uptick in demand for rental properties, with the market seeing an average annual growth rate of 17–20%. This trend indicates a strong and growing interest in Bali’s real estate, making it a favorable time for investments.

What are the most promising areas on the island for property investment?

For those interested in short-term rentals, Changu and Berawa are currently the top picks due to their popularity and vibrant lifestyle offerings. For long-term investments, areas like Bukit and Nu’anu are gaining attention for their strategic locations and potential for appreciation.

What are the laws and regulations for foreign nationals buying property in Bali?

Foreign nationals face specific restrictions regarding property and land ownership in Bali. The options available are typically in the form of leaseholds, either short-term or long-term. It’s important to note that foreign buyers are not allowed to hold freehold titles, aligning with Indonesia’s regulations to maintain local ownership and control over land.

Ready to start your buying property in Bali? Keep these insights in mind, and you’re all set to navigate the exciting world of Bali real estate with confidence and ease. Here’s to finding your dream property in the island of gods!