7 Powerful Steps to Purchase Property in Bali

Are you looking to purchase property in Bali? Whether you’re dreaming of a serene villa in Ubud, a luxury beachfront property in Seminyak, or a smart investment in the thriving Canggu area, understanding the legal framework and process is essential. This article will guide you through the steps to legally purchase property in Bali as a foreigner, while ensuring your investment is secure and profitable.

Can Foreigners Purchase Property in Bali?

Yes, foreigners can purchase property in Bali, but there are legal limitations. Indonesian law does not allow foreign nationals to own freehold land. However, there are legal structures that allow foreigners to control and profit from property through alternative ownership titles.

Legal Ownership Structures for Foreign Buyers

There are three common legal structures that allow foreigners to purchase property in Bali:

a. Hak Pakai (Right to Use) This is the most common legal option for foreigners. Under Hak Pakai, you can use the property for residential purposes for an initial period of 30 years, extendable up to 80 years. This title is granted by the National Land Agency (BPN).

b. Leasehold (Hak Sewa) This structure allows foreigners to lease property for a specified period (commonly 25–30 years) with an option to extend. Although it does not grant ownership of the land, it is legally recognized and suitable for both residential and commercial use.

c. PT PMA (Foreign-Owned Company) Establishing a PT PMA (Penanaman Modal Asing) enables foreigners to conduct business and own property under a company structure. This is ideal if you plan to run a business, such as a villa rental, from your property.

How to Purchase Property in Bali in 7 Powerful Steps

Step 1: Choose the Right Location
Areas like Canggu, Seminyak, Ubud, and Uluwatu each offer unique investment advantages. Consider your goals—rental income, personal residence, or capital appreciation.

Step 2: Engage a Local Notary and Legal Advisor
A local notary (notaris) is essential for drafting and certifying legal documents. Also consult with a legal advisor experienced in Indonesian property law.

Step 3: Conduct Due Diligence
Verify land certificates, ownership status, zoning regulations, and potential restrictions before committing. This ensures the property is legally safe to purchase.

Step 4: Sign Agreement and Make Payment
Once due diligence is complete, sign the necessary agreements (lease or Hak Pakai), and transfer the payment via escrow for added security.

Step 5: Register Your Property
Ensure that all legal documents are submitted to the National Land Agency (BPN) for official registration under your name or company.

Step 6: Secure Property Insurance
Protect your investment with appropriate property insurance to cover natural disasters, theft, and other potential risks. This adds a crucial layer of security for your asset.

Step 7: Consider Hiring a Property Management Team
Especially if you’re living abroad, hiring a trusted local property management team ensures the upkeep and rental of your property runs smoothly and efficiently.

Taxes and Fees When You Purchase Property in Bali

Be aware of the associated costs, including:

• Transfer tax (5%)

• Notary fees (1%–2%)

• Legal advisory fees

• Annual property tax (PBB)