Blog

Bali’s property market continues to attract foreign investors looking for vacation homes, rental properties, or long-term residences. However, Indonesian property laws are distinct from those in Western countries, and purchasing property as a foreigner requires careful legal navigation. Many first-time buyers assume they can own freehold property in Bali outright, only to discover that Indonesian law prohibits foreign freehold ownership. Instead, foreigners must explore alternative options such as leasehold agreements or Hak Pakai (Right to Use) titles, both of which provide secure yet legally compliant avenues for property acquisition. The difference between freehold and leasehold ownership is crucial to understand from the outset. Freehold, or Hak Milik, is the strongest form of property ownership available in Indonesia, but it is restricted to Indonesian citizens. Foreigners cannot hold land under a freehold title, which means that even if an international buyer were to enter into an informal arrangement with an Indonesian nominee, the legal risks would be significant. Leasehold, on the other hand, is a well-established and fully legal alternative. Foreign investors can lease land and property for an initial period of 25 to 30 years, with the possibility of renewing for an additional 20 to 30 years, making leasehold agreements an attractive option for those looking to invest in Bali’s real estate market. Another option, Hak Pakai, is available to foreigners who hold a KITAS or KITAP visa, which allows for long-term residence in Indonesia. This title enables a foreigner to obtain the right to use a property for up to 80 years, provided they meet certain requirements, including purchasing a property valued at no less than IDR 5 billion. While less common than leasehold arrangements, Hak Pakai provides an alternative for those who qualify. Legal Due Diligence: Why It Matters Regardless of which ownership structure a buyer chooses, conducting legal due diligence is an essential part of the purchasing process. In Bali’s fast-moving property market, where land transactions are frequent and documentation standards can vary, it is vital to confirm that the property being purchased has a clear and legal title. Buyers should verify that the property has not been previously sold or leased to another party and ensure that there are no outstanding taxes, disputes, or encumbrances. An essential part of due diligence is checking zoning regulations. Land in Bali is classified for different purposes, including: Residential use Commercial use Tourism use Agricultural use Some properties may be located in areas where foreign leasehold ownership is restricted or where certain types of development are prohibited. Without verifying zoning status, an investor may purchase a property that cannot legally be used as intended, leading to financial losses or legal issues down the line. A reputable notary, or PPAT (Pejabat Pembuat Akta Tanah), is a necessary partner in any property transaction. A notary’s role includes: Verifying the authenticity of land certificates Drafting legal agreements Ensuring that all necessary paperwork is correctly filed with the Badan Pertanahan Nasional (BPN) Investors should always work with a qualified notary and legal consultant rather than relying on informal agreements or verbal assurances. The Importance of a Well-Drafted Lease Agreement For foreign investors who choose a leasehold agreement, the structure of the contract plays a crucial role in protecting their interests. A properly drafted lease should clearly outline the lease duration, extension rights, and financial terms, including any pre-agreed conditions for extending the lease in the future. Without explicit renewal clauses, a foreign investor may face difficulties renegotiating terms when the initial lease period expires. Another critical aspect of the lease agreement is defining permissible property modifications and usage rights. If a buyer intends to renovate or rent out the property as a short-term or long-term rental, these conditions should be outlined in the lease to avoid disputes later on. Additionally, an exit clause is advisable, detailing how the leaseholder may transfer or sell their remaining lease term to another buyer if needed. Without these provisions in place, an investor may find themselves locked into unfavorable terms with no legal recourse. Engaging a legal expert to draft or review the lease agreement can prevent costly mistakes and ensure that the contract reflects the investor’s long-term goals.   Property Taxes and Fees Aside from the purchase price, buyers must account for taxes and legal fees when acquiring property in Bali. The Land and Building Acquisition Tax (BPHTB) is a mandatory tax imposed on property purchases, typically amounting to 5% of the transaction value. Legal and notary fees can vary but generally range between 1% and 2% of the property price. For those leasing property, annual land and building tax (PBB) is a recurring obligation, though it is usually modest compared to similar taxes in Western countries. Meanwhile, sellers are required to pay a Capital Gains Tax (PPh) of 2.5% when transferring ownership. These additional costs should be factored into an investor’s budget when evaluating the affordability of a property. Alternative Investment Structures for Foreign Buyers For investors looking to hold property with stronger legal protections than a leasehold agreement offers, establishing a foreign-owned company (PT PMA) can be a viable option. A PT PMA (Penanaman Modal Asing) is a legally recognized entity that allows foreigners to conduct business in Indonesia, including purchasing land under a Hak Guna Bangunan (Right to Build) title. This structure is commonly used by those investing in commercial real estate or villa rental businesses, as it enables more direct control over the property. However, setting up a PT PMA requires compliance with Indonesian business regulations and ongoing administrative oversight. Some buyers explore nominee agreements, in which an Indonesian citizen holds the title on behalf of a foreign investor. While this approach may seem convenient, it is legally risky and not recommended, as Indonesian law does not recognize nominee arrangements, leaving the foreign investor vulnerable to potential disputes. Avoiding Common Pitfalls Despite Bali’s reputation as an attractive investment destination, buyers should be aware of common pitfalls that could jeopardize their purchase. One of the most frequent mistakes is relying on verbal agreements instead of legally binding contracts. Every transaction should be formalized through a written agreement in both Indonesian and English, ensuring transparency and enforceability. Investors should also avoid purchasing property without verifying zoning and building regulations, as non-compliant properties may face demolition orders or legal disputes. Additionally, failing to confirm the seller’s legal standing can result in complications, particularly in cases where land certificates have not been properly updated or where multiple parties claim ownership rights. Securing a Smart Investment in Bali Purchasing property in Bali offers a wealth of opportunities, but understanding the legal framework is essential for a secure and successful investment. Whether opting for a leasehold agreement, Hak Pakai title, or PT PMA structure, buyers must conduct due diligence, work with trusted legal professionals, and ensure that their contracts are airtight. This also applies if you’re eyeing land for sale Bali to build your dream villa or start a business. Bali Coconut Living is here to guide you through every step, making the process smooth and stress-free. Get in touch with us today and let’s find the perfect property for you in Bali!

Bali remains one of the world’s prime locations for real estate and villa investment, thanks to the great potential for property capital appreciation. This is largely due to the booming demand for luxury holiday villas by both local and international visitors to the island. Smart investors would already be able to outline how an investment into the Bali property and villa market would yield a high return on investments (ROIs) in just a few short years. After the pandemic, there have been consistent waves of tourists arriving, leaving, and returning to the island with locations in South Bali remaining the most popular. Experts predict that the Bali property market will continue on the up-trend, with a positive outlook throughout the industry in the upcoming years. If you’re a property investor looking for your slice of Bali’s thriving property market, you can do so feeling confident of strong potential capital appreciation on your investments. What Does Capital Appreciation Mean? Capital appreciation happens when the market price of the Bali property that you’ve invested in has increased, meaning that you are now making money and profiting off of your investments. It is the difference between the purchase price and the selling price of an investment. You know that your Bali property is enjoying capital appreciation when you can confidently see its value growing over time. Another way to explain capital appreciation is when you see your property’s value increasing over what you originally paid for it. Bali is in the middle of a tourism boom. As of July 2023, the island received 541,353 visitors to the island. In fact, the local government has projected that Bali will receive a total of 5.5 million tourists by the time December rolls around. This can only mean positive growth for Bali’s villa and property markets, meaning you can look forward to a strong potential for capital appreciation on your Bali investments. Bali As An Investment Destination There are a number of factors that make Bali an attractive investment destination, leading to great potential for capital appreciation. In addition to a strong tourism industry, the island is popular for a number of other reasons including: Growing Economy: Analysts at McKinsey have predicted that Indonesia will become one of the largest economies globally by 2030; this is good news for all, especially the Bali real estate and property market. Simplified Policies: The Indonesian government has simplified policies to make it easier for foreigners to invest in property in Bali. These policies include reducing the minimum investment amount and streamlining the taxation system and property transfer process. Affordable Property Prices: Compared to other popular tourist destinations, such as Hawaii, Phuket, or Maldives, property prices in Bali are still relatively affordable. There is still lots of potential to enjoy great capital appreciation on your investment here in Bali. Beautiful Island: Bali is home to one of the world’s most fascinating cultures - the only one of its kind. Paired with the warmth and hospitality of the Balinese people & the island’s astounding beauty makes it a favorite with investors and tourists from around the globe. What Are The Best Places To Invest In Bali? The best places to invest in Bali are the neighborhoods that are popular with tourists and expats. High-demand areas would include the fashionable coastal town of Seminyak and its neighboring sisters Petitenget and Umalas.  Canggu is always in high demand - in fact, property prices in Berawa, Echo Beach, Batu Mejan, Batu Bolong, and even Pererenan are currently at an all-time high.   The laid-back and elegant Sanur as well as the glitzy seaside towns of Nusa Dua and Jimbaran, Uluwatu, and Pecatu in the southernmost peninsula are also great neighborhoods to invest in. Kuta and Legian are also still very popular with certain groups of tourists, thanks to their unique character and charm. The artistic and cultural hub of Bali, Ubud is another area to consider when investing in luxury villas in Bali. Here are some of the most sought-after luxury Bali villas available for sale with strong potential for capital appreciation. Beautiful Luxury Bali Villas For Sale Villa Amati, Ubud A regal and luxurious property built in the classic Javanese joglo style, perfect for a classic Indonesian royal experience. A collection of 5 individual joglos on 3,730 sqm of verdant tropical land - 4 are private bedrooms with ensuites with its own enclosed living and dining area and terrace/balcony. The larger joglo, which is known as the Pendopo, houses the communal living & dining area. The entire property is decorated in exotic silks and fabrics and beautifully carved furniture and fixtures. Perched atop a small hill, it comes with an infinity pool overlooking the ravine below and the jungles beyond. Villa Teduh, Seminyak A stunning and modern property with a contemporary design, a style that is popular style tourists in Seminyak. Featuring clean lines, open spaces, and neutral color palettes, the villa is built on 270 sqm of land and comes with 2 floors, 4 bedrooms with ensuites, a fully equipped kitchen, and a rectangular swimming pool. There is a balcony on the second floor and rooftop terrace, a closed living and dining area, and a parking space. Villa Teduh is centrally located to the hottest venues in Seminyak with easy access to Seminyak beach. It’s a convenient holiday home Villa Mahasari, Berawa A fashionable and trendy villa in Berawa with tasteful design features that instantly turns it into a warm & sophisticated, tropical holiday home. Modern and elegant, white exteriors are enhanced by darkened window frames, the emerald green grass, and the cerulean blue of the pool. Inside, it is both stylish and cozy, functional and stylish, bright and intimate.  Built on 480 sqm of land, Villa Mahasari comes with 5 beautifully appointed bedrooms with ensuites across two floors, a closed living and dining area, and a fully equipped kitchen. Invest In A Luxury Bali Villa With Bali Coconut Living Ready to enjoy remarkable capital appreciation from your property investment here in Bali? Contact us now at Bali Coconut Living, a Seminyak-based villa property agent that is always ready to serve you if you need assistance in buying, selling, and even maintaining a villa for your passive income. We have hundreds of wonderful Bali villas whether freehold or leasehold for sale and for rent in all of the most popular areas including Seminyak, Umalas, Uluwatu, Jimbaran, and Canggu. Feel free to browse all of our properties and if you have any questions or inquiries, do contact us or pick up the phone and call us at +62 361 847 6727.

If you’re reading this then you’re probably in the market to buy property in Bali. This is a great move as you could enjoy high, consistent returns over the long run. Land and property will always be in demand, especially in a popular tourist destination like Bali. Turning your Bali property into a vacation rental could generate a passive income no matter where you are in the world. You can even choose to stay in the property when you’re in town.  But before you sign on the dotted line, it’s important to do your due diligence whether you’re looking to buy Bali real estate for sale, invest in Bali property rentals, a Bali beach house or a luxury villa. The first thing that a smart investor would do is to book a property consultation with one of Bali’s best and most trusted property agencies. Having a great property partner would ease your real estate journey significantly. In addition to helping you navigate Indonesia’s complicated property laws and landscape, your property partner will assist you as you negotiate with property owners, notaries, lawyers, the banjar and other local authorities. A certified property agent can also keep you from getting scammed. There have been cases here in Bali where property “owners” have run off with deposits! So if you’re looking for a property business partner and a property agent in Bali, look no further than Bali Coconut Living. We’re experts in Bali property law and a Seminyak-based villa property agent that is always ready to serve you if you need assistance in buying, selling, and even maintaining a villa. Now that we’ve covered the most important points, let’s look at buying the property of your dreams here in Bali. One of the most important things to understand is the legalities and Indonesian property law There are 3 main types of property ownership here in Indonesia and if you’re a foreign citizen, it would be good to know early on that foreigners aren’t legally allowed to own land or property here. But you could always “purchase” a leasehold property. Simply put, a “lease” means long-term rent – you “own” the property for a number of years whether 25 or 70 years, depending on your agreement with the owner. This does not include the land that the property stands on. Payments can either be made annually, or you can make full payments upfront to cover the entire duration of the lease. Once the lease has expired, you can negotiate to renew the lease or the property will be returned to the rightful owner and reverted back to its freehold status. Ready to buy your own property in Bali? Contact Bali Coconut Living now, and feel free to browse through our listings of freehold or leasehold Bali property available for sale and for rent in all of the most popular areas including Seminyak, Umalas, Uluwatu, Jimbaran and Canggu.

So you’ve finally purchased your dream home here in Bali Villa ! Congratulations! Now that you’re a proud homeowner, there is going to be plenty to keep you busy, from maintenance to upkeep and utilities.   One of the most important matters that you should think about as a homeowner is Property Insurance. Should you get one and what is it for? Firstly, let’s take a look at the types of Property Insurance that are available in Indonesia.   In general, there are two: Homeowners Insurance and Business Insurance. If you’re not planning to run a business out of your home, then the obvious choice would definitely be the Homeowners Insurance. Homeowners Insurance Homeowners insurance is for private homes owned by a person and not a business. The idea behind home insurance is to cover losses and damages to your residence, along with furnishings and other assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.   Every homeowner insurance is different depending on the company and the policy that you choose. Remember to properly understand what is and isn’t covered; ask a lot of questions and read the fine print. In general though with any policy, your actual, physical dwelling should be covered, as well as some other structures on the property, like your garage, fence, pool, and driveway.   Based on the Indonesian Fire Insurance Standard Policy (PSAKI), a home insurance policy would cover damages caused by the following: Fire Lightning Explosion Fall of Airplanes Smoke Wind / Hail You can also extend your policy to cover the following: Storm Riot Protection of valuables Protection if an injury to a third party Financial protection in the event of damages to the property of the insured Temporary residence accommodation if the house/building is damaged and cannot be inhabited again   Bonus Tip: If you’re planning to rent out your property, you may want to consider applying for landlord insurance for unexpected damages that can cover furniture, appliances, and other items. The coverage can be extended to cover legal costs, loss of income, and more.   It would also be wise to also take into consideration the possible risks of earthquakes, volcanoes, and Tsunami, as Indonesia sits on the “ring of fire”.  We’ll never know what the future holds but it is always best to protect yourself, your loved ones, and your investment the best possible way there is.   Ready to get started? There are many internationally-renowned insurance companies here in Bali, including Allianz, AXA, MSIG, and more. You can contact one, or all and speak to the agents individually.   You could also speak to other homeowners here in Bali and ask them for their tips and advice. Based on all your research, we are sure that you’d make the right decision when it comes to protecting your home and your loved ones.

There are two ways to invest in a property in Bali. You can either buy a freehold villa or buy freehold land in Bali. The former is usually for the more aggressive investors who would risk the initial capital cost in order to generate cash over time. The latter is usually for the more conservative investors who would rather preserve their wealth.   Land, especially beachfront land in the Berawa area, is highly likely to see a rise in value. Such land can be a safe haven with low tax that may be sold later for a higher price, which can potentially beat inflation and has better returns compared to most bank interest rates. The price of land could see a steady increase compared to gold, and it is potentially liquid as future developers prefer to build on empty land — not to mention how competitive the property market will be over the next decade.   Beachfront land for sale in Canggu at Padang Linjong   Here we present a 5 Are (500 square meters) parcel near the beach that is already valued at IDR 8,000,000,000 total price. A villa that is constructed on this land will likely be valued at at least IDR 14 billion. A single villa complex constructed on 5 Are, assuming that we would use 300 square meters for the building, will be able to accommodate at least 3 guests.   Currently, a brick road leads to the quiet and serene area, where an apartment building has already stood. It would also be very profitable to a future developer to build a cafe or another place of entertainment so that residents don’t need to venture too far for entertainment and basic needs.   16 Are land for sale in Canggu   A few hundred meters from Pantai Munduk Catu, a wide-open field among villas and private houses is ready for sale, currently valued at IDR 8,750,000,000 per 5 Are. You could choose to acquire a minimum of 5 Are or the full 16 Are at a great price of IDR 25,6 billion.   For comparison, Villa Gloria with a 14 Are total land size can fetch up to IDR 30.8 billion. You could expect at least an addition of IDR 10 billion from a land investment with 16 Are, provided that the developer is willing to compete with hotels, villas, and high-end establishments in the future.   Browse Bali Coconut Living for more properties to choose from.   This article is by no means a financial advice and estimated returns are speculative. Please consult with a qualified financial advisor to accurately gauge the risks and opportunities of property investing.

Purchasing a property in one of the most desired places to live is always a good idea. The property can be used as a home for your retirement, as your second home for the holidays, and even as a lucrative property business.   Like with any property purchase, you must do your due diligence research, talk to the right people, and trust only a few. Before making any purchase involving a huge amount of money, here is a reality check of what purchasing properties in Bali entails.   Land certificates - who really owns the land?   While land certifications matter for all property-related purchases, not every land certificate in Bali is up to date. There is a possibility that the landowner’s name inscribed in the certificate is no longer valid – perhaps due to death and inheritance, or unofficial selling to another owner, outside of the authorities’ knowledge.   Land law in Indonesia is straightforward, but the lack of law enforcement and people not following proper protocols for land transfers are the source of many headaches.   What to do:   When you receive information regarding the land certificate, you should ask politely how the current owner obtained the land certificate. If he or she purchased the land from someone else, try to contact the previous owner. If it is an inherited land, ask for the inheritance documentation and check with your lawyer.   At Bali Coconut Living, we always make sure that the freehold certificates certify the true owner of the land before they can list their property with us. This way, there will be no potential legal problems in the future.     Zoning - does the land lie in the correct zone for its purpose?   The building certificate (Izin Mendirikan Bangunan or IMB) is the next crucial document that determines how your property will function, and what you are allowed to build.   As urban development spreads outwards from the centre, buying property in the heart of well-established towns can get ridiculously expensive, so you will probably consider buying ones in the rural areas not too far from the main attractions.   Some of the local people have built houses on inappropriate zones, but got away with it because their family owns the land since before the government increased their efforts to enforce the zoning law.   What to do:   Check the IMB and the local zoning law. Remember, you are not allowed to build in the Green Zone (reserved for agriculture). You are not allowed to build commercial buildings such as villas, restaurants, or hotels in residential areas. In case of a mixed zone, consult with your property advisors on what you should or should not build based on unspoken cultural laws.   Go to the site – get an accurate picture of the property   What is on paper may be difficult to imagine, and sometimes untrue of the reality on the site. The site plan or aerial view map will not account for the following inconveniences: Actual land boundaries Neighbourhood access Road quality Land quality for construction Building quality Flooding or fire hazards     What to do:   Ask a property agent, such as Bali Coconut Living to help with property inspection. Done with us, this can be beneficial for you as we have done research on the property beforehand. We know the ins and outs of the property, the real owner of the property, the validity of the land certificate, and we even supervise properties that are under construction.   Do note that this is not legal advice, and you should hire a property lawyer to perform additional inquiries regarding the validity of certificates – it is normal to doubt everything! Rest assured that you have mitigated unnecessary risks by talking to our agents.

Besides being a favorite travel destination, Bali attracts foreigners to invest and buy property around the island. However, buying property in Umalas or any other part of Bali, is not always safe for foreigners. In this article, find out how to buy a villa safely. Foreign Bali Property Ownership There are two types of rights stated in the property regulations and real estate ownership in Indonesia. They are the “Right to Own” (Hak Milik) and the “Right to Build” (Hak Guna Bangunan). There are a lot of foreign investors in Bali who think an Indonesian citizen can act on their behalf to acquire the Hak Milik Certificate. Note that this is an extremely risky practice, as no matter how close you are with the nominee, they have the potential to overtake the property, leaving you, as a foreigner, with no protection for your investment. Buying a Bali property safely Owning a legal entity (PT PMA) and acquiring the ‘Right to Build’ license in Indonesia, is the only way foreigners can safely invest in property or buy land in Bali. This will protect your investment and give you plenty of time to enjoy your property, bequeath it to a family member, or even resell the Hak Pakai to a local. There are a few notes for foreigners to consider about Hak Pakai, including that The Hak Pakai can only be held if the land already has a building on it. It’s also worth noting the minimum value of the property and that it must be located in a tourist, residential, or trading area, as acquiring land in Bali agricultural or greenbelt zones are prohibited. The process of buying a Bali property will involve acquiring the Hak Pakai and submitting a packet of completed forms to the Indonesian National Land Office (BPN). These include relevant and supporting documents, proof of land payment, and the condition of Hak Pakai. Once these conditions are met and built with the right building permit (IMB), the BPN will issue a Hak Pakai under you or your company’s name. This is the correct way of purchasing a property in Bali, and things you should avoid as a foreigner. Contact Bali Coconut Living for more information on the best villas in Bali, and we’ll help you make a decision on buying a property in the safest & most secure way.