FAQ
Below are some of the most frequently asked questions we receive about our services.
Buying Land in Bali
Buying Villa in Bali
Buying Land in Bali
Buying Land in Bali
FAQs
What is the difference between freehold and leasehold land in Bali?
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.
Can Foreigners Buy Land in Bali?
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.
How long can I lease land in Bali?
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.
Which locations have the highest ROI?
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.
Common Land Terms & Jargon
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.
How much does land cost in Bali?
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.
How much land do I need?
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:
- The Hut (100 sqm Build Area)
- The Kayu (200 sqm Build Area)
- The Eco (280 sqm Build Area)
- The Luxe (450 sqm Build Area)
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.
What are the timeframes for buying land in Bali?
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.
What are the primary types of land zoning in Indonesia?
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 such as PLG (Persetujuan Bangunan Gedung) and/or SLF (Sertifikat Laik Fungsi) for commercial or residential purposes.
Buying Villa in Bali
Buying Villa in Bali
FAQs
Can Foreigners Buy a Villa in Bali?
The answer is simply, Yes! Are you dreaming of buying a villa in Bali, but you are a foreigner and not sure if it is possible? Although the Indonesian government puts certain restrictions on foreign ownership of property, it is really possible for foreigners to buy a villa in Bali. A leasehold contract is a perfect solution for you. Imagine being able to call a beautiful villa in Bali your own, even if it is just for a period of time. With a leasehold contract, you will have the opportunity to be a homeowner for a specific period of time, usually 25 years, but the great thing is you can even extend it to more than 50 years.
This can be a great option for foreigners who are looking to buy a villa in Bali as a holiday home or as an investment. When you decide to buy a leasehold villa, the villa is technically yours for the duration of the lease, as well as all the rights and responsibilities that come with it, and allows foreigners to enjoy the benefits of property ownership. So, don’t wait any longer, take the first step to make your Bali villa dream a reality.
What is the Difference between Leasehold and Freehold?
When it comes to buying a property in Bali, you have two types of ownership: leasehold and freehold.
Leasehold is a long-term lease agreement, typically lasting 25 years, and it can be extended further where you can become the owner of the property for the duration of the lease. This is a popular option for foreigners looking to buy property in Bali because Indonesian laws sometimes restrict foreign ownership. The great thing is the flexibility to enjoy the benefits, like the right to rent out the property or make improvements to it during the lease period, without being worried about any restrictions.
Freehold, on the flip side, is the complete ownership of a property, where the buyer becomes the legal owner and has full control over it. This option provides long-term security as there is no expiration date on the ownership and allows the property to be owned by future generations. But, this is only available to Indonesian citizens or foreign citizens who are married to Indonesian citizens. So, if you are a foreigner looking to buy property in Bali, this might not be an option for you. But, if you’re an Indonesian citizen or a foreigner married to an Indonesian, it is a great way to have the stability of long-term ownership and the ability to pass it on to your family.
When thinking about buying a property in Bali, seek legal advice from a trusted local lawyer to make sure you fully understand the rules and requirements of both leasehold and freehold agreements. Also, consider about the location, the current condition of the property, and its potential. All in all, this will help you find a property that fits your needs and will be a good investment.
Is Buying a Villa in Bali a Good Investment?
Buying a villa in Bali is a great investment and a smart move for a number of reasons. Bali is a top tourist destination with an ever-increasing number of visitors. The Central Statistics Agency (BPS) reported that Bali recorded the highest number of foreign tourists among all provinces in Indonesia in 2020 with 5.96 million visitors, and has been consistently ranked in the top – second place, in TripAdvisor’s Travelers’ Choice for the top 25 popular destinations worldwide. It is no wonder that owning a villa in Bali could yield high returns as there is a high constant need for accommodation.
Bali’s property market is strong and has been steadily growing in recent years. The average price of a villa in Bali in 2020 was IDR 17.9 billion (around 1.2 million USD), representing a 4.5% increase from the previous year. With that great news, the property market in Bali is stable and has a good potential for capital appreciation and is likely to continue rising in the future.
The island’s unique culture, lifestyle, tropical climate, stunning scenery, and a wide range of leisure activities attract many people to purchase a property as a holiday home or a retirement property. The island is known for its beautiful beaches, temples, and delicious cuisine, as well as its friendly locals and relaxed pace of life. Buying a villa in Bali allow you to enjoy all that the island has to offer.
Overall, buying a villa in Bali is a good investment as it offers a combination of rental income, capital appreciation, and personal enjoyment. With the strong property market, the high number of tourists visiting the island, and the unique culture and lifestyle, it is not hard to see why you need to consider buying a property in Bali.
Is investing in Bali property profitable? Holiday rentals vs yearly rentals
Buying property in Bali can be a profitable venture due to the high demand for both holiday and yearly rentals. As it has constantly been like this, Bali is a top tourist destination and the number of tourists visiting the island continues to grow, making it an attractive location for property investment.
Investing in holiday rentals, or short-term rentals, in Bali can be a good move to make a profit. They are usually rented out at a higher rate than yearly rentals because they are in high demand during the tourist season and can be rented to different people frequently. But, note that managing a holiday rental can be more work as there is a constant turnover of tenants. If you’re considering investing in Bali property, keep in mind that holiday rentals can bring in more money but also require more attention.
Yearly rentals, on the flip side, can be a good way to make a more stable and consistent return on investment. They are typically rented out at a lower rate and are occupied by the same tenant for a longer time, which means you do not have to worry about managing and maintaining the property as much. But, the return on investment may be lower because they are typically rented out at a lower rate.
Do I need to be in Bali to buy a property?
No, you can buy property in Bali without having to be there physically, but it is important to keep in mind that every place has its own rules and regulations. Doing your own research and making sure you fully understand what you are getting into before investing will also help you a better look at what you are looking for.
Buying property in Bali can be complicated and it is always best to seek the help of a legal professional and real estate agent who is familiar with the local laws, customs, and procedures.
But, it is highly recommended to visit the property and the area before making a purchase, if possible, to get a better sense of the property and the neighborhood. If you are unable, you can also ask the realtor to take videos and pictures of the property and the surrounding area.
How do I find a trusted real estate company in Bali?
When looking for a trusted real estate company in Bali, make sure to research and read reviews of different companies. This will give you an idea of the level of service and expertise that they provide. Look for firms with good reputation in the industry that has been around for a while.
A reputable real estate firm should also have a team of experienced agents who are knowledgeable about the local market and can assist you in finding the ideal property for your needs. Take a look at their portfolio of properties and previous projects, it will give you an idea of their work and experience. It is also beneficial to have a company familiar with the legal and administrative requirements to buy property in Bali.
If you are looking for a villa in Bali that you fancy and are interested in but not sure about a real estate company you could trust, Balitecture Realty has got you covered with our best selections.
We have got a great selection of leasehold villas for you to choose from. You can pick between tropical villas, luxurious houses, and modern apartments. With Balitecture, you have a one-stop shop for all things property in Bali. We specialize in end-to-end property services and are dedicated to bringing you the best of luxurious houses, tropical modern villas, perfect lands, and other properties in Bali. Our expert team is well-versed in the ins and outs of Bali’s property market, and we know the best areas to be in. Whether you’re looking to buy or rent, our team of experts is here to help guide you every step of the way. Discover the exclusive selections and find your dream property in Bali with Balitecture Realty.