8 Do’s and Don’ts if You Buy a House in Bali as a Foreigner

Bali is a place of natural beauty and wonder. From the lush green rice paddies to the pristine beaches, Bali is a tropical paradise that draws people from all over the world. The Balinese people are warm and welcoming, and the culture is rich and fascinating. There is no shortage of things to do in Bali, whether you want to relax on the beach or explore the many temples and villages. 

If you’re planning to buy a house in Bali, there are a few things you should know before you make your purchase. Harcourts Bali came up with 8 do’s and don’ts to keep in mind if you’re a foreigner looking to buy a house in Bali.

Due diligence

DO

Be thorough with due diligence. As foreigners we don’t have access to the official register and need to hire a competent and highly trusted lawyer to check the house you’re about to buy and the land it stands on. 

Always consider confirming the land zoning appropriate for residential or business purposes, original ownership certificate, absence of unpaid taxes and mortgage under the land certificate, as well as the building permit for the house itself. 

Check the correct land measurements, borders, and surrounding areas. 

DON’T

Do not ever trust anything in words. You need to have paperwork showing the legality of the ownership and the zoning, as well as the building permit certificate. Don’t accept copies of the documents as confirmation, because the original is often taken when there is a loan involved. Only consider original documents.

Never buy a house in Bali that doesn’t have an IMB – building permit. A house can not have it at all or the plans filed with the IMB application picture something completely different from the house in reality. It simply means that the house is illegal and no matter how the previous owner managed to own it, if the official land and build office representatives find out, they will demolish your house. 

Equally, don’t sign contracts before the previous owner pays all due taxes or whatever fees he/she might have forgotten to pay. With the transfer of ownership, all these unpaid taxes will be your responsibility. 

Working with Harcourts Purba Bali you will get access to not only a selection of houses for sale in Bali, but also a whole legal team and sales experts. We guarantee that all listed properties have gone through extensive legal checks and mean no threat to your investments.

Location and real view of the Bali house

DO

Research the market and have a clear understanding of the purpose: why do you buy a house in Bali? To live in it or to rent it? If you live in it, what are your lifestyle and daily needs? Choose the location wisely and don’t rely only on advertised advantages without actually seeing the area. Browse listings online before visiting and make a list of questions.

For high returns on investments, choose the most popular areas like Canggu, Ubud, Seminyak, Uluwatu, Jimbaran, etc. 

A good idea is to check previous resident feedback, and reviews on maps or Airbnb, and to actually walk around the neighborhood to meet neighbors and learn how friendly they are, what’s around your future house, and how safe and quiet the area is. 

Many listings simply overestimate how close they are to the beach or how unique the view is. 

DON’T

Do not buy or even rent houses in Bali long-term, or pay deposits based on what you saw in the pictures. There is a tendency to take beautiful wide-angle pictures when the house is done and still use it after 5 or more years of the house life. You need to visit and check if there was any proper maintenance, how big the place really feels, and what is its current state. 

It may be sometimes hard to argue with owners about the state and price of the house later on once you see it, especially if you agreed on something previously. 

While it is very beautiful to live next to a temple or a mosque, if you are looking for peaceful living and you are not a religious person, you may be surprised by the number of ceremonies or prayers people do. 

The same goes for event venues or nightclubs – you may not only hear the noise and loud music but feel the actual vibration of the music. The areas around popular restaurants and clubs in Canggu also tend to become chaotic parking in the evening. It is definitely something you should consider before signing anything. 

Harcourts Bali sales team has been working in the Bali real estate market for more than 20 years. We have witnessed all the changes the island and each location has gone through and we can share this first-hand experience with our clients to choose the perfect location for your needs. We work and live in Bali which helps us know the island better than anyone. 

The Quality of the Bali house

DO

Visit the house, preferably with a competent builder representative to evaluate the state. The tropical climate in Bali has no mercy for properties and you have to be very careful buying a house in Bali that was built several years ago. Mold, rot, rust, termites, rats – you will have to check the walls, floors, roof, pool, and garden to find out if there will be any issues. 

The absolute must-do is to confirm that structurally the house was built according to all standards and will withstand heavy rainy season, earthquakes, or flooding. The roof should be properly sealed and waterproofed. If you’re buying an old house, the previous owner should have done regular maintenance work otherwise the quality of the house deteriorates far quicker than in Western countries due to fierce sun, rain, and humidity. 

All the wet areas need to have a slope, there should be a proper drainage system in place as well, and many smaller details regular buyers can overlook.

You should also check the land infrastructure, including the well’s depth and water quality, road access and road condition, power grid, and capacity. After all, you may want to check the Internet and mobile connection. 

DON’T

Do not let pretty pictures confuse you. Mold could be easily masked with a fresh coat of paint, yet the root of the problem was more likely ignored. This will mean that the mold will be back in less than a couple of months. 

The source of the problem may be inappropriate or lacking treatment of the walls, but may also be way serious, for example, the house may not have the needed elevation above wet rice fields, there can be issues inside the walls, etc. 

It is best to check the house after heavy rain to make sure no gypsum fell down, no leakage occurred, no flood in the basement or in the bathroom. If you are buying a house in the dry season, you will have to rely on your gut feeling and professionals’ evaluation. 

Buying a Bali house

DO

It is vital you do your own research and have realistic expectations. If you are going to buy a house in Bali and you have no relevant experience or knowledge about real estate on the island, you’re risking hundreds of thousand dollars. 

You will need a very good lawyer, a notary, and yes, a real estate agent, not a freelancer, an actual real estate agency recognized by the official Indonesian association of real estate brokers AREBI. Harcourts Purba Bali worked hard to get their recognition and to partner with big bank institutions.  

Make lawyers and notaries check the legal aspect, draft the contract and certify the signing of the contract. Read online and ask lawyers to explain to you in detail the different ownership titles available specifically for foreigners. If needed, you can open a PMA only with the support of a good lawyer. 

If you need legal assistance buying a house in Bali or feel like you are missing something, do not hesitate to contact us. 

DON’T

First of all, be aware that buying a house in Bali under the name of a local nominee may seem simple and less paperwork, but is completely illegal and unsafe for foreign investments. It will be your personal decision to go leasehold or freehold but do not trust people or agents that will tell you that you can own the land forever – it is simply impossible and forbidden for foreigners by the law. 

Don’t sign any contracts before finalizing the due diligence and without the presence of the notary. Do not avoid paying taxes or getting appropriate permits if needed – otherwise, you are risking the house and your legal status in Indonesia. 

Don’t assume the asking price is final. Always negotiate. If you don’t have real negotiation skills, the real estate agent will help you – they are working hard on scoring great performance to get record prices and satisfaction for both sides. 

Whether you are going to buy a house in Bali for your own residence or for a rental business, your final decision depends on a variety of factors: your budget and the specific location you’re interested in among others. However, if you do your research and take the necessary precautions, buying a house in Bali can be a great investment, a fast and enjoyable journey. 

Harcourts Purba Bali has been working with the resale and brand-new houses for sale in Bali for over 20 years and we are curating a list of 200+ interesting houses. If you are ready for the next step or have any questions, message us today!