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So you’ve taken the plunge and have decided to go ahead and buy land in Bali! Congratulations, this is going to be an exciting time for you. Being a landowner in Bali means that you’re investing in one of the most wanted locations in the world –your investment will only yield high returns as time goes by. Additionally, buying land in Bali is one of the surest and safest ways to park your money and grow your asset portfolio. Even if you’re not developing the land yet, you can just leave the land there with little to no risks. Unlike properties, land does not require maintenance, electricity, or security. All you have to do is just make sure no one is squatting or illegally building on your land. But before you sign on the dotted line, let’s take a look at some common mistakes that people make when buying land in Bali and what you can do to avoid them. Skipping out on background checks Before any transaction takes place, it would be wise to do your due diligence and find out more about the land that you’re looking to purchase. Make sure that you’re dealing directly with the owner or a trusted and accredited real estate firm with direct ties to the owner. It’s unfortunate that in many cases, there are “middlemen” involved which could cause you problems in the long term. It might be tempting to just skip all the red tape and put your trust in the friendly salesman, but remember that you’re putting a lot at risk. The best way to check if the land and owner are “clean” would be to enlist the services of a property lawyer and a notary. No Understanding Of Indonesia’s Property Laws At this stage, it’s important to understand that only Indonesians can purchase or own land/property in the country. No foreigners are allowed to do so and if someone is telling you that you can, that is a huge red flag. Make sure you understand the basic land/property types which comprise the following: The “freehold” title or “Hak Milik” means that only Indonesian citizens can hold this title. If you’re a foreigner and you’re tempted to hold a freehold land, it will automatically be deemed void, and therefore, the land will automatically belong to the government. A secondary title, known as “Right of Use” or “Hak Pakai” is the best option for a foreigner. With a built-in extension of 25 years, the title comes with renewal after 20 years with only a small tax implication. Restrictions include the size of land and property and you must hold a valid permit to stay in Indonesia such as a KITAP or a KITAS. The third title is a commercial title; “Hak Guna Bangunan”, which means “right to build”. This title is compulsory for both foreign and Indonesian companies buying, selling, or managing villas for commercial purposes. Remember to also speak to your lawyers and notary about property tax and other taxation involved when buying land in Bali. No Understanding Of Zoning Laws and Regulations Understanding zoning laws is extremely important as it will tell you what you can and cannot do with your land. Some areas are zoned for tourism which is great for villas, guesthouses and hotels. Certain zones are slated for residential, forestry, conservation, green, industrial and trade and service. Some properties may not even have road access, which will be expensive for you to undertake. Be sure to speak to your lawyer or notary to understand which zone the land that you’re planning to buy falls under and if you’re even allowed to build on that land at all. No understanding of the local culture or “adat” It’s very important to understand the neighbourhood where your land is located in. Every village in Bali is governed by a “banjar” - a council of village leaders with their own sets of rules, guidelines and regulations. Spend some time understanding the local neighbourhood laws, important cultural practices and religious days. There might be fees that you’d need to pay the Banjar every now and then, which would go back into the village. Speak to other foreigners in the area who might be willing to share their experiences with you so you can be mentally prepared. Ready to buy land in Bali? Contact Bali Coconut Living is a leading Seminyak-based villa property agent ready to assist you in buying, selling, and villa maintenance. Feel free to browse through our listings of freehold or leasehold apartments, available for sale and for rent in all of the most popular areas including Seminyak, Umalas, Uluwatu, Jimbaran, Sanur and Canggu.