Choosing Land for Sale in Bali: 5 Common Mistakes All Foreign Buyers Make

Are you on your quest to find the best land for sale in Bali for your family or future investments? The new market can be overwhelming, challenging, and risky to enter. When it comes to buying land in Bali, many foreign buyers make the same mistakes again and again. Here are 5 of the most common ones Harcourts Bali experts have seen, and how to avoid them.

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1. Choosing a green zone while looking for land for sale in Bali

The land for sale in Bali, and all the land in general has zones regulating the use of each piece of land. The overall zoning includes many specific zones and each regency in Bali has its own legal document that the government can revise and change zoning if needed.

If you are buying land in Bali, it is likely you are planning to make it your second residence or start an Airbnb business. In both cases, you will have to find the land with appropriate zoning to make sure the villa you’re building and business activities will be legal. 

Land zoning has a very important mission: it keeps the use of land in the country balanced. There are 3 general zoning in Bali and Indonesia foreign investors should know:

  • Green zone – you are not allowed to build at all. You can only use this land for agricultural purposes.
  • Yellow zone – you can build a villa and live in it. But no business activities are allowed. 
  • Red zone – commercial zoning. You have legal permission to do business on this land. 

When new investors come to the Bali property market, they don’t know this division and often go to visit the land that is actually in the green zone. Converting zoning in some areas is illegal, and in some areas can be done through bribing (which is illegal and highly not recommended) or official land office in very rare cases. 

Some freelancer agents or landowners will not be transparent about it and you’re risking your investments.

Choosing the land for sale in Bali, make sure you request the zoning certificate from the landowner and ask your lawyer to run a legal check in the land register to confirm the information. However, if you are buying land for sale via Harcourts, you can rest assured – all land plots have already gone through all legal checks and are safe to buy.

2. Not knowing the real market price of land for sale in Bali

The real estate market in Bali is highly competitive and fast-growing, and market prices are changing quarterly. The location is one of the main pricing factors as well as real or upcoming area development. Harcourt’s esports are familiar with market prices and we price the land we are selling according to some standards in the area. 

Yet, if you’re going to buy land from local landowners, they often are unfamiliar with how to price the land, which results in both underpricing and extraordinary overpricing.  

Do your own research going through Airbnb demand in the area, real prices from agencies and direct landowners on OLX or Facebook, browse listings available online, and always leave room for negotiation. 

Almost all prices are listed higher than the actual value of the land for sale in Bali. You should do your research, check the land, and negotiate. You can agree on the price yourself if you speak Indonesian or know the market well, or better delegate it to the professional real estate agent familiar with the specific area you’re buying the land. 

Land for sale in Bali goes for as low as USD 400 per 100 sq m per year in remote areas up to USD 2500 per 1 sq m and more in the most desirable tourist and expat locations. The plot sizes are smaller in busy areas and will be around 2-10 ares (200 – 1000 sq m) and are much larger in less popular areas, going even up to a few hectares.

3. Looking for a local nominee to buy land in Bali

Foreign investors and individual buyers often do not speak Indonesian or do not have a foreign-owned company established in Bali as it requires large prepaid capital. Moreover, foreigners cannot own the land indefinitely in Bali, only lease it for years up to 80 years.

In the past, friends or locals recommended foreign buyers find a local nominee and buy the land for sale they like under a local citizen’s name to fully own it. There was a simple written agreement between a foreign buyer and local nominee then or no written agreement at all. 

Yet, both sides knew nothing about the legality of such an agreement and ownership. It soon was discovered that such a transaction was illegal and left foreign investors completely unprotected, while the local nominee just conveniently acquired a new piece of land. Today, this approach is absolutely to be avoided. 

4. No due diligence before buying land in Bali

Once you’ve found your perfect land for sale in Bali, give it a little bit of time and a close look. Do not rush. You will have to hire professional lawyers specializing in real estate to do a full legal check of the land called due diligence.

Without exaggeration, this is the crucial step to safely and legally owning the land for sale in Bali and being able to build a villa, resell the land or do business. 

Thorough due diligence will include confirming ownership and owner identity, land zoning, the possibility of obtaining needed permits (for building or business activities), exact measurements and borders of the plot, potential risks, and tax debts. It will take around two weeks to one month and cost USD 400 to 10 000 depending on the legal firm you go with. 

It may sound challenging but, in fact, when you’re purchasing land for sale in Bali via a notorious and experienced property agency, this legal check is already done for each one of the properties listed. 

Harcourts Purba Bali goes the extra mile to make sure all the land for sale available on our website is safe and legal to buy for residential or commercial purposes. It saves our clients time and money and guarantees a stress-free deal. 

5. Signing anything without a notary

The final step to secure your land in Bali is to sign the contract and transfer the ownership under your name or the name of your company in Bali. 

Yet, the only legal way to do it is in the presence of a trusted notary. Yes, it means you will pay an extra notary fee but signing any documents or giving any deposits without a notary leaves you completely unprotected in terms of the law. 

You need to verify the contract draft and make it as personalized as possible – never go with standard templates. After that, set up a meeting with the owner and a notary, carefully read the contract, and sign it. 

Make sure the notary signs it too and puts official stamps on the original contract. The notary then has to register your contract within the land office and this will mark the transfer of the land ownership to you. 

Also, make sure you have the original or the signed and stamped copy of the contract. 

Choosing an ideal land for sale in Bali should be exciting and stress-free. To get closer to your perfect vision, Harcourts Bali will guide you through every step to make sure you secure a good deal both in terms of location and investment opportunities. 

Browse all the land plots available for sale in Bali in our selection. If you’re ready to start the process or still have questions left, keep reading our blog or contact us directly to save time and get immediate answers.

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