As a foreigner it’s practically impossible to obtain what would commonly be regarded as a mortgage. Getting credit without significant collateral is highly unusual unless you are operating a large business which can be secured against by the banks. Loans and credit are usually reserved exclusively for Indonesian citizens.

At Harcourts Purba Bali we treat each client on an individual basis and will walk you through the best options to suit your specific needs when it comes to purchasing property in Indonesia. There are several options open to investors and buyers and our team will tailor these to you based on your individual requirements, however there are very important considerations in the process that prospective buyers and investors must be aware of:

Law 5 of 1960 regulates property and real estate ownership in Indonesia, with two types of rights relevant to this article:

• ‘Right to Own’ (Hak Milik)
• ‘Right to Build’ (Hak Guna Bangunan)

Many foreign investors in Bali think the way to purchase property in Bali is by using an Indonesian citizen (a nominee) to act on their behalf to acquire the Hak Milik certificate. However, this is a tremendously risky practice as the local nominee can overtake the property and there is not much a foreign buyer can do to safeguard their investment.

The safest way for a foreign national to invest in property in Bali is to do it through a foreign-owned company (PT PMA) and acquire the ‘Right to Build’ (Hak Guna Bangunan) license. A PT PMA is a foreign limited liability company in Indonesia. With a PT PMA, you will have the right to acquire the Right to Build (Hak Guna Bangunan/ HGB) and Right to Use (Hak Pakai/HP) licenses. You can also inherit it to a family member, lease it to other people, or even sell the Hak Pakai to an Indonesian.

If you wish to hold the property for more than 70- 80 years, you can acquire a new Hak Guna Bangunan and a Hak Pakai once the old licenses expire.

Note that you can hold Hak Pakai only if the land already has a building on it. There is also minimum value to the property and it must be located in a tourism, residential, or a trading area as you cannot acquire land in Bali in agricultural or greenbelt zones.

To acquire Hak Pakai, you will need to submit a packet of completed forms to the Indonesian National Land Office (BPN), requesting Hak Pakai over the property and including relevant supporting documents. Once you have shown proof of land payment and the conditions of Hak Pakai are met and built with a correct building permit (IMB), the BPN will issue a Hak Pakai Certificate under your company name. If all of this sounds extremely complicated don’t worry, our experienced professionals at Harcourts Purba Bali will walk you through the process and ensure all your questions are answered in a timely and transparent manner so you can rest assured you are investing in a safe and protected manner.

Notary fees relating to the rental or purchase of land are of the order of 1.5%.

Harcourts Purba Bali will consult with you along every step of the way to arrange your visit to Bali and assist you whist you are here from the viewing stage right through the process to the transfer of ownership. We place a great emphasis on after sales service so you can be assured you have all the support you need to make the transition to living in Indonesia.

When you stay in Bali, your passport as ID is all you will need. Ideally, the land you are looking to acquire will have to be paid before your departure from Bali, your presence being necessary for the signing of documents at the notary which we will assist you with.

Owning property in Indonesia does not automatically entitle you to a kitas. You will need to setup a company to have a kitas issued and work through that process. We can advise you on professionals to execute this for you, or you can consult with us to find an alternative visa suitable to your needs.

Yes absolutely and we handle multiple resell investments from our clients. You can be sure that our team will look after you should you wish to resell any of your property acquisitions through Harcourts Purba Bali.

Operating costs are as follows:

• Annual property tax,
• Insurance of the property, if you wish to dispose of it,
• Monthly staff costs,
• Various expenses such as water, electricity, internet, etc.

The amount of tax levied after the resale of real estate in Indonesia is set at 10% of the amount declared.

You are free to increase your rent and we will advise you on the best market value year on year. There is no law in Indonesia that states you have to abide by set increases so you are able to best asses the value of your property and adjust your rent accordingly to maximise profitability in the market.

You are free to set the duration of your lease as you see fit. It can be a long-term contract (1 year or more), a medium-term contract (6 months) or short term (quarterly or monthly).

We will advise you on the best procedure to setup your rental contract and points to include. Obtaining a security deposit or rental bond is a good way to best ensure your property is well maintained and respected by your tenants.