- Buying property in Bali can be exciting yet daunting with some mistakes that may arise.
- Doing it thoughtfully may take time, but definitely leads you to a safe and good purchase.
- Seeking help from a trusted Bali real estate partner can avoid from major mistakes.
Are you looking for the perfect piece of Bali villa? Whether for a residence or a holiday rental, buying property in Bali can be an exciting experience.
However, it’s important to be aware of the potential pitfalls and mistakes that are often neglected. From not understanding local laws to failing to do research, there are some mistakes that can derail the process.
Knowing what to look out for and how to avoid them ensures that you find the right property for your needs. Read on to avoid these mistakes when buying property in Bali.
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1. Opting for a local nominee scheme for buying a Bali villa
Foreigners are not able to obtain a freehold certificate in Indonesia, which leads to mistakenly believing they cannot buy in Bali. As a result, some people go with a nominee scheme. A local person is named as the ‘owner’ on paper, and an agreement is put in place between them and the actual owner.
Although this might appear as a way, it comes with a number of risks. In the event of a disagreement, nominees often have a better chance in court due to their legal ownership.
We should reiterate that foreigners are able to get property in Bali with either a ‘right to build’ or a ‘right to use’ certificate. The process might take longer, but it is much safer when investing in Bali real estate.
2. Failing to carry out proper research on zoning regulations
It’s essential to understand the local zoning and development regulations. You should research the zoning regulations to understand what type of development is permitted in the area.
All territory in Bali is subject to zoning laws which control the sort of activities and development on it. Commonly encountered zones include pariwisata (touristic), pemerintah (governmental), pemukiman (residential), and pertanian (agricultural or green zone).
You should also make sure that the property is properly zoned. So, there are no restrictions could affect your use of the property. Get in touch with our team of experts to clear things up about the zoning, as well as where to buy safely and having high potential.
See also: 8 Best Areas to Invest in Bali Real Estate (Plus Upcoming Areas)
3. Not verifying the road access to the property and its surroundings
Before landing any deal, make sure to have the access roads checked for any potential obstructions. It’s essential to make sure that there are decent roads to get to the property and thus accessible, as some areas are still less tapped and have no proper access.
A Bali villa with reduced costs can sometimes lack road access, which can lead to expensive repairs like acquiring a part of a nearby property for access. If you find a piece of land with no access to it, you have to make sure enough space to build your own road. Or, negotiating shared access with your neighbor might be needed.
In addition, you need to understand the layout of the area. You should familiarize yourself with the layout of the neighborhood to ensure that you’ll be comfortable living in the area.
4. Neglecting to confirm the land documents for a Bali villa
Before entering any agreements, it’s essential to make sure all of the paperwork concerning the property is in order. This includes confirming the title deed and checking the certificate. The documents should be all correctly recorded, as this will provide legal security if there are any issues down the line.
Additionally, not all land certificates in Indonesia are available to foreign investors. Depending on their reasons, foreigners can opt for either Hak Guna Bangunan (Right to Build) or Hak Pakai (Right to Use). The former is suitable for those who plan to use the property for business, while the latter is more appropriate for personal residences.
It’s essential to verify that the property is not subject to any encumbrances or liens, thus you will need to seek help from a trusted real estate partner. Balitecture can assist you with the process of verifying certificates that are subject to property.
See also: 7 Steps of Building Villa in Bali as a Foreigner: A Complete Safe Guide
5. Not inspecting the property's boundaries
Putting a little more effort into inspecting the property’s boundaries is a good idea. That will ensure your dream Bali villa is not encroaching on other properties or public lands.
Additionally, potential environmental hazards could be checked and anticipated by doing this. This includes checking for potential flooding risks, contamination, and any other hazards that could make the villa unsuitable for use.
Finally, it’s also important to inspect your Bali villa to make sure that it is in good condition. So, it will not require any major repairs before it can be used.
6. Not undertaking proper due diligence prior to buying property in Bali
By going through due diligence, you can avoid the majority of the above-mentioned mistakes. Doing so will help you to gain insight into different aspects of the property, such as its potential, the accuracy of documents, the history, and any hidden conditions.
As mentioned earlier, checking properly will help you better see and prevent potential environmental hazards or encroachments. Additionally, researching the regulations also makes you comply with them.
Finally, it’s essential to dip into the local market to see the current prices in the area. This will help you to determine the fair market value of the property and ensure that you are not overpaying.
We highly suggest conducting proper due diligence with a reliable real estate partner. Our team of experts can assist you with the process and make sure everything following the property is checked.
7. Unaware of the tax regulations when buying property in Bali
Tax regulations can vary from region to region, so it’s important to be aware of the specific regulations that apply to your property. This includes understanding the regulations related to taxes, fees, and rental rights.
Indonesian law requires both parties in a property transaction to pay taxes. Generally, the buyer is charged 5% of the land value, while the seller is required to pay 2.5%.
The safest route is to pay taxes on the full amount to avoid any issues. Don’t ever try to list a lower price on documents to reduce tax liability. If the tax office finds something suspicious, they will refuse to approve the transfer of title – making it impossible to complete the purchase.
8. Not budgeting properly for buying a Bali villa
It’s easy to get carried away and overspend when buying a Bali villa, so it’s important to set a clear budget and make sure that you are able to stick to it. It’s also important to factor in additional costs such as taxes, fees, and renovations.
In addition, be aware of the potential for hidden costs when buying a villa in Bali. Understanding the local regulations related to ownership in Bali will ensure that you’re not surprised by any unexpected costs.
Finally, of course, the amount of money it takes to live in Bali should also be considered. This means looking into the cost of housing, transportation, and other expenses related to life in the region.
9. Working with unqualified real estate agents
Working with unqualified real estate agents can lead to potential problems down the line. As a result, it can make the process of buying property in Bali more difficult and swap away your excitement.
Whenever you’re looking for a real estate agent, verify their qualifications and they are well-informed about the property laws in Bali. It’s also essential for working with a real estate partner that understands the current market value in that region.
Real estate partners you are working with should be trustworthy and reliable. Confirm this by checking their references and making sure that they are properly licensed and insured.
Looking for Complete Assistance in Buying property in Bali?
As a leading authority in the real estate industry, Balitecture provides you with complete assistance throughout the entire process. A team of experts specializing in A-Z property services is committed to helping you every step of the way. Set free consultation with us!
We got you covered with extensive property listings throughout the island with a wide range of types and options. This includes Bali villas for sale, villas for rent, land for sale, and other properties available for lease and sale.
We can help you find the perfect piece of property with an in-depth knowledge of the different areas of Bali that meets your specific needs and preferences.
Discover Bali villas for sale here.
Discover Bali lands for sale here.
So, say goodbye to endless searching, and hello to the best selection of property listings. Start your Bali real estate investment and journey with Balitecture Realty!
