Learn Bali Property Rights Before You Buy!14 September 2019 by Ade
Wouldn’t it be wonderful to be able to call Bali your forever home? Bali receives millions of visitors a year including expats and travelers who fell in love with Bali and wish to move to the island permanently. Considering the exchange rates, living in Bali would be considered relatively cheap. This means many expats and foreigners wishing to purchase land and property in Bali should be able to do so easily… Unfortunately, owning assets in Indonesia, if you aren’t Indonesian, is almost impossible – don’t let anyone else tell you otherwise.
If you were looking at buying land to build your dream Bali property on, there are a few real estate and ownership options that you must know before you embark on a new and exciting journey of being a homeowner in Bali. Firstly, it is important to understand that there are different titles for both land and property in Bali and each title connotes a different meaning. The “freehold” title or “Hak Milik” means that only Indonesian citizens can hold this title. If you’re a foreigner and you’re tempting 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. In addition, there is no mention anywhere in Indonesian law that these extensions or renewals cannot be continued as long as it is done on state-owned land. Some restrictions to this title would include the size of land and property and that 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. The good news is that there are no restrictions for a foreign PT PMA owning such a company 100% as long as it is a 4-star and up.
Now that you’ve got your land titles all sorted out, you must obtain your accommodation license and Ijin Mendirikan Bangunan (IMB). All of this can be very confusing and stressful – the Indonesian property landscape is known to be a maze of red tape and bureaucracy, which are all in the Indonesian language. Some foreigners prefer to take the easy way out; they use the name of an Indonesian citizen to purchase the land and to build the villa. This may sound like a great option, but this will pose tons of problems for you in the future when it comes to taxes and reports. You’ll run into even more problems if the person you’re dealing with is untrustworthy.
One of the very best and safest ways is to use the services of a trusted and credible third party. Bali Coconut Living has years of experience in this sector with hundreds of happy customers and an abundance of positive reviews. With experienced consultants helping you every step of the way, you won’t ever have to worry about property laws, paperwork, bureaucracy or getting scammed. Get started today!