How to Buy Property in Bali

The foundation for real estate rights in Indonesia is land. All real estate that is located on this land, including bought on, is the property of this land (plot).

The basic law that describes the fundamental rights to land is Undang-undang Nomor 5 Tahun 1960 tentang Peraturan Dasar Pokok-Pokok Agraria.

There are several types of land rights in this document, the most common in the practice of buying and selling commercial and residential real estate:

Hak milik

This is a property right- the highest right to land. This right can only be enjoyed by an Indonesian citizen (private individual). It is unlimited in time.

view on bali

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Hak guna bangunan

It is a right to use buildings – the right to buildings located on the site. This right is usually used by legal entities, but it can also be issued to an individual (citizen of the country). This right may be issued “over” the title (or over another type of right), the land may belong to an Indonesian, and the buildings to the company or another Indonesian. Or this right may be the only right to the plot (if the ownership is “downgraded” to hak guna bangunan). This right is issued for 30 years with the possibility of extension for another 20. After the expiration of the extension period, this right can be renewed. For foreigners, this is one of two ways to own real estate from (but for this you need to open a company in Indonesia).

Hak pakai

Right of use – this right is issued “on top” of other, stronger rights, for example to land with ownership rights. This right is issued for 30 years with the possibility of extension. This right can be held by foreigners (individuals) under certain conditions (having a kitas – residence permit – is an important condition).

Hak sewa

Rental right – this right is available to foreigners (individuals) and does not have special conditions for its registration (a foreigner’s passport is sufficient). This right is issued for a period of up to 30 years and can be extended for another 20 years.

There are several other laws governing real estate rights

These laws deal with apartment buildings and the rights to this type of property. Since in the case of an apartment building, ownership is not assigned to a specific piece of land, but is assigned to a specific unit. The latest law states that foreigners may have the right to own this type of real estate (subject to certain conditions – having a residence permit is one of them).

In Bali, there are very few such buildings (designed exactly like an apartment building, where each unit has a certificate of a certain type – sertifikat strata). Important: a building with apartments is not always designed as an apartment building (rumah susun) – for this you need to obtain a special land right and permission to build this particular type of building (which the Bali administration almost never issues to anyone).

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Real estate prices

When registering ownership of real estate, there is a certain reference point for assessing the site – the cadastral value of land in a certain area.

When registering a lease (purchasing a villa from a developer), prices can be different – the size of the villa and the plot itself, design, area, materials, number of years are affected.

The most expensive areas in Bali: Sanur, Canggu, Seminyak, Bingin. The average cost of a two-bedroom villa on a plot of 200 sq. m varies from 200,000 to 350,000 dollars (primary). You can find it cheaper and you can find it more expensive.

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