How To Safely Buy Land in Bali as a Foreigner in 5 Steps

Buying a piece of land in paradise seems perfect until you realize how many factors you have to take into account. From being the legal owner of the property to the safety of your transaction and investments. At Harcourts Bali, we have established a simple system of 5 transparent steps that will lead you to buy land in Bali legally, and we will share the full process in this article.

Can foreigners buy land in Bali?

Yes, the good news is foreigners can legally buy land in Bali under a PT PMA – a special foreign-owned company. Moreover, the Indonesian government approves 100 percent foreign-owned property, contrary to Thailand, for example. A foreign investor can buy land in Bali, or to be more precise, lease it for 25 to 80 years under a renewable contract. 

If after all these years you don’t wish to extend your contract, the land and the property will go back to the landowner or the government.

There are other options to buy land in Bali, ex., leasing it without PT PMA for only 25-30 years (Hak Sewa or land for lease) with an option to extend the contract.

The last option – buying land through a local nominee is not safe nor recommended, and it is, today, illegal. 

How much does land cost in Bali?

Land prices in Bali heavily vary depending on the location of the land and keep growing every year. The most expensive areas are Canggu, Seminyak, Kuta, Sunset road, Benoa, and Sanur where prices per 100 sq.m. (1 are) will start from USD 6 100 (90 million IDR) per year for a leasehold or from USD 1300 per sq m for freehold.

More remote areas yet popular among tourists and expats like Ubud and Bukit area will be slightly cheaper. While land located 1-2 hours from Canggu will be as affordable as USD340 per 100 sq m per year. 

Browsing land for sale in Bali and close islands on the Harcourts website, you can easily sort all listings by price. 

Is the property in Bali a good investment?

Bali is one of the sweetest spots for investors, digital nomads, and tourists. Indonesia, in general, being one of the most powerful countries in South-East Asia, both politically and economically, – is a great investment. The property is bringing high returns on investment and the legal process remains simple. 

5 Steps to Buy Land in Bali as Foreigners

If you’re looking for land in Bali you should check our selection of land plots in the most popular and exclusive areas on the island: from busy Canggu to spiritual Ubud. However, before making your decision, our legal team will help you understand the land ownership transfer process and what steps you have to take to legally own the land in Bali.

1. Select the location

This step may seem obvious but choosing the right location to buy land in Bali is crucial for setting the right budget, expectations on rental yield, and getting permits for building a house. 

Land prices vary across Bali with Canggu, Kuta, and Nusa Dua areas being the most expensive – from USD 1300 per sq m. While areas like North, Tabanan, and West Coast will have prices around USD 400-500 per are (100 sq m). The returns on investments are high in central areas and daily rent brings the most profit.

Not only prices are important, but also the regulations within the area and the type of land. Rice paddies are harder to develop and need special preparation – deep bore piles at least, which also means more investments. Cliffside or riverside land will also need some extra work such as retaining walls to prevent flooding or soil shifting. 

Lastly, what are your lifestyle and daily needs? If you love socializing, international cuisine, coworking spaces, and nightlife, you will choose Canggu or Seminyak. For those on a spiritual path, Ubud is the place. Families and retirees love Sanur and Benoa, as well as Nusa Dua and Jimbaran. Surfers and adventurous youngsters prefer Uluwatu, smaller islands, or the West Coast.

2.  Due Diligence

The most important part of buying land in Bali is proper due diligence. This step allows you to make sure your transaction will be secure and that the land you are buying is legally cleared. Due diligence should be done by your lawyer and include several stages: 

• Legal ownership validation –  to establish who owns the land now, how the title was acquired and if everything is legal. The landowner will provide the original certificate of ownership.

• Taxes check. You should only buy land with no tax burden. 

• Mortgage. The legal team will check if there are any loans locked on the land. If so, this land is not a good choice, as if the landowner doesn’t pay the loan, the Government can seize the property.

• Land zoning. Every land lies in a specific zone that determines the possible permits and use of the land. You are interested only in residential and commercial zoning (yellow and red zoning). Your property agent or lawyer must also check if it is possible to legally build on the land and to get a so-called IMB – building permit.

The legal team will check all paperwork and conclude if it is safe for you to purchase the land you’ve chosen. All land listings preselected by Harcourts and published online on our website have gone through a thorough legal check and we can guarantee the safety of your purchase.

3. Infrastructure.

At the same time, not only the paperwork is important for negotiation, but land infrastructure as well. Does the plot have road access or it will be your financial responsibility to create access? Water and electricity supply – is it accessible or belongs to someone else? Water quality? In general, water in Bali is quite heavy on the skin, hair, and sensitive stomachs. Some areas are close to rice fields, sewage waters, or rivers, and the water can be contaminated. 

It is also very useful to get accurate measurements of the land, as some documents do not state the exact borders or dimensions. While later on, it can cause disputes with the landowner’s family members, neighbors, or the village itself.

4. Signing the contract

When your lawyer and you are satisfied and happy with the land you are buying and agreed on the price with the landowner, you can move on to drafting and signing the Sales and Purchase Agreement (SPA) validation. At Harcourts Purba, we craft personalized contracts for every transaction and we highly recommend such an approach against using the standard agreements. 

Insider tip: it is vital to include the renewal conditions and prices in the contract otherwise you may end up losing your land after 25 or 80 years (according to your lease type) and your building on it. The contract should state the exact property value as the contract is the base for buyer and seller’s taxes due to the government. You should have a clear agreement with the seller on taxes and notary fees: normally the seller pays the taxes and both sides pay 50/50 notary fees, but it has to be agreed upon. 

The notary will register your agreement and it will mark the transfer of the land ownership to you.

5. Decide on the future of the land

In general, there are two options in front of an investor or buyer: land banking and building. Talk to Harcourts Bali to learn the pros and cons of each option in your specific situation and budget. The most popular choice is to build a villa for your own residence or rent if the zoning allows. 

Choosing a builder is a challenging process. There are hundreds of contractors on the island, yet, very few – are trustworthy and offer reasonable prices. It is always better to do your own research, especially in terms of what is really possible and durable in the long term to build in Bali. Talk to at least 5 to 10 builders and request a detailed BoQ (bill of quantity) before making your decision.

For instance, in Europe or the USA people are used to having wooden houses, while in Bali mold, termites and moisture are very likely to shorten wood lifetime drastically. Only tick wood is good for housing, yet, it still has its own life cycle. Popular gypsum looks aesthetically pleasing, yet may swell and fall down during the rainy season. Swing windows are common in western countries but can cause leaking if not installed properly in Bali. And so on, the number of factors are significant and you need to find an honest and very knowledgeable builder to deal with them. 

Once your dream villa is done, it is time to move in or invite the first guests to stay short or long-term. Property investment is highly profitable in Bali and at Harcourts Purba, we can guide you through the whole process as we have an in-house legal team and 20 years of experience in buying property in Indonesia. Talk to our experts today and find out what are your options to buy affordable land in Bali.