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Buying a Land in Bali: What You Need to Know

The two main options for owning land in Bali for the purpose of villa development are freehold and leasehold. 

Freehold means that you own the land indefinitely. This option is exclusively available for Indonesian residents, so is not the most common option for international buyers and investment villas. 

Leasehold is similar to freehold in many ways, but you only hold the rights to the land for an agreed time frame. Importantly, international buyers will have their name on the lease and a legal right to use the land. 

Typically, land is initially leased for 25-30 years, with the option to extend the lease at the current market value. The contract is overseen by a notary (specialist land lawyer), with checks and due diligence carried out prior to the lease beginning.

Leasing land in Bali is much cheaper than buying freehold, and provides the highest return on investment on villa developments.

Foreigners can buy land in Bali, but there are a number of rules and regulations that need to be followed. Freehold land can only be purchased by Indonesian residents, but leasehold property can be purchased by foreigners.

There are also rules and regulations that must be followed in certain circumstances, such as renting out the villa as a holiday rental on Airbnb or other platforms. As with any country, taxes and fees may be applicable to rental income generated by the property.

Bali is one of the most scenic destinations in the world, which has resulted in many foreigners looking at land for sale in Bali as an investment. For professional advice on the latest rules for buying and investing in Bali, we can put you in touch with local legal professionals.

The terms of leasing land in Bali are agreed between the land owner and the individual or party interested in leasing the property. A typical lease will last from 25-30 years, however some leases are as short as 20 years, whilst others can be longer than 40 years. The figures refer to the initial lease.

The lease contract will normally permit the leaseholder to extend the lease for a similar period to the initial lease, however the price will reflect the updated market value of the land at the time of the renewal. The ability to extend the lease is beneficial when a new villa has been built on the property.

If a land owner continues to agree to further lease extensions, the land can be leased indefinitely.

There are many areas in Bali that can deliver exceptional returns on investment. Some of the most popular areas in Bali for our clients include:

  • Pererenan
  • Canggu
  • Berawa
  • Nyanyi
  • Seminyak
  • Uluwatu
  • Ubud 

Areas with popular attractions nearby, such as beach clubs and restaurants, tend to attract high numbers of tourists, which is ideal for holiday rentals. For advice on popular locations to buy land in Bali, get in touch.

Below are some of the most common words and abbreviations you will likely run into if you are looking to buy land in Bali. 

  • Are: A popular unit of measurement for land in Bali. 1 Are = 100 sqm.

  • Leasehold: A type of property ownership where you own the rights to use land for a set timeframe.

  • Freehold: Property ownership whereby you own the rights to land indefinitely.

  • Rp / IDR: Indonesian Rupiah – the currency used in Indonesia. It is also common for prices to be listed in USD (United States Dollar).

If you have any questions or require additional help, please get in touch.

There are a number of factors that can influence the cost of land in Bali. Pricing for leasehold land is normally calculated per “are” (100 sqm) per year, with prices starting from around Rp5.000.000 IDR (~ $350 USD).

Below are some of the main considerations in pricing land in Bali:

  • Leasehold vs Freehold: As you would expect, buying freehold land is significantly more expensive as you hold the rights to the land. Leasehold land in Bali is much cheaper to buy, but leases typically only last for 25 – 30 years, with the option to extend the lease at the current market value of the land.

  • Land Location: As is the case with buying land in any country, the cost of land in Bali is heavily influenced by location. Popular locations and beachfront properties typically attract the highest prices, whereas more rural and quieter areas offer the cheapest land deals.

  • Nearby Attractions: Similar to land location, the availability of local amenities and attractions can increase the cost of buying land. Popular shops, restaurants and beach clubs can all impact price.

  • Property Size: The larger a plot, the more it will cost. For the most affordable land prices, look for properties that suit your villa and pool requirements.

As well as the cost of land, it is important to budget for construction, landscaping and furnishings when investing in Bali.

The amount of land required will depend on the size of the villa you want to build. In most cases, the amount of land required to build will be smaller than you may think.

If you are looking to invest in Bali property, you will want to maximise your land use for the highest return on investment. On each of our developments, we indicate the recommended amount of land required to build each villa. You can view the developments here:

Most villas have a pool and landscaped garden, which is strongly recommended when looking for land to build an investment villa.

For advice on the right land size for your new villa, please get in touch.

The first step of buying land in Bali is finding the perfect plot for your budget and requirements. Once suitable land is found, the process typically takes around 1 month, as per the following timeframes:

  • Inspection and due diligence (2 weeks)
  • Contracts (1 week)
  • Money transfer (1 week)

Timeframes can vary for many reasons, but the above timeline is typical for most our clients.

Once land has been purchased, you can then begin with the fun process of architectural design and planning.

There are 4 primary types of zoning that will pertain to most purchases:

1. Government-owned land

Publicly-owned land, such as beaches, natural reserves, and forests, are restricted for individual investors.

2. Residential zoning

Residential zoning is only granted for properties intended to be used as a residence, like houses or villas. Depending on the area, it may be possible to apply for building licenses that allow for apartments, shared living spaces, and some types of commercial businesses.

3. Commercial and tourism zoning

Commercial and tourism zoning permits properties to be used for a range of commercial purposes, including hotels, resorts, condotels, and entertainment spaces. In some cases, residential properties may also be allowed for use within commercial and tourism areas. For holiday rentals, the available license to apply known as Pondok Wisata.

4. Agricultural zoning (green zone)

Agricultural zoning is strictly for farming purposes and does not allow for any type of residential or commercial buildings. Building permits are not issued for houses, villas, or any other non-agricultural structures.

In order to make a successful and smooth purchase of land in Bali, it is crucial to verify the zoning and Ijin Tata Ruang (ITR) prior to purchasing land for any project. It is also necessary to check if the zoning allows for various types of building permits and licenses (Izin Mendirikan Bangunan or IMB) for commercial or residential purposes.

Contact Us

  • Balitecture, Jl. Pemelisan Agung Tibubeneng, Kec. Kuta Utara Bali 80361
  • [email protected]

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