If you are familiar with Indonesia real estate regulations, you know that foreigners are not able to buy land or property. There are two categories of properties in Indonesia – freehold (hak milik), for Indonesian citizens, and leasehold (hak sewa), which are the properties available for foreigners to buy. To clarify, a leasehold property is a type of property ownership where the buyer purchases the right to use a property for a specified period of time, typically 25 years. The land remains owned by the original landowner, who is often a Balinese individual or company.
At Harcourts, we have one of the largest selection of leasehold properties in Bali, with some of the most beautiful villas and estates. Some of our off-the-plan properties are also leasehold, which are perfect for real estate investment in Bali.
If you are looking to invest in Bali as a foreigner, leasehold properties are a favorable option. A few questions that we are asked frequently are the following:
What is a leasehold property?
A leasehold property is a type of property ownership where the buyer purchases the right to use a property for a specified period of time, typically 25-30 years. The land remains owned by the original landowner, who is often a Balinese individual or company.
This is in contrast to freehold properties that are owned outright by the purchaser with full rights to use, develop, and sell the property as they see fit. Freehold ownership in Bali is available to Indonesian citizens, but can be purchased by a foreigner through a PT PMA.
Who is eligible to buy leasehold property in Bali?
Leasehold properties in Bali are available to both Indonesian citizens and foreign buyers. However, foreign buyers must comply with Indonesian regulations regarding foreign ownership of property.
Can a leasehold agreement be renewed or extended?
Leasehold properties can have their leases extended, but it’s important to note that the extension of a lease is not always guaranteed. The lease term for a leasehold property in Bali is typically 25 to 30 years, after which the lease may be renewed for a further term as stipulated in the lease agreement.
The terms of lease renewal can vary depending on the agreement between the landowner and the lessee, but it’s common for the lease to be extended for another 25 or 30 years, subject to negotiation and agreement between both parties.
However, the renewal of a lease is not always straightforward, and there are factors that can affect the ability to extend the lease, such as changes in local regulations, disputes with the landowner, or changes in land use zoning.
Can a leasehold property be sold or transferred to another buyer?
Yes, a leasehold property in Bali can be sold or transferred to another buyer during the lease term. However, the buyer will need to comply with Indonesian regulations regarding foreign ownership of property, and the terms of the original lease agreement will need to be transferred to the new owner.
There are several advantages of buying leasehold properties in Bali, including:
There are several risks associated with buying leasehold properties in Bali that buyers should be aware of. Here are some of the most significant risks:
It’s essential to thoroughly research the terms of the lease and the reputation of the landowner before purchasing leasehold villas in Bali. It’s also recommended to consult with a qualified lawyer or real estate agency, such as our team at Harcourts, who is familiar with Indonesia laws and regulations to minimise the risks involved
If you are searching for a beautiful villa in Bali, the best places to look would be closer to the tourism hotspots, because there is the higher potential to rent out your property for tourists and the property value tends to appreciate more in those areas. Our favourite areas are the following:
Seminyak: Seminyak is known for its upscale resorts and hotels, shops, restaurants, and nightlife. Leasehold properties in this area can be expensive, but they can offer excellent rental returns due to the high demand for accommodation.
Canggu: Canggu is a trendy coastal area that has become increasingly popular in recent years. It offers a laid-back lifestyle with plenty of restaurants, cafes, and beaches. Leasehold properties in this area can also be pricier, due to the popularity of the area, but you can also expect strong rental returns.
Ubud: Ubud is a cultural and spiritual hub known for its stunning rice terraces, temples, and art galleries. Though the scenery is a contrast from Seminyak and Canggu, Leasehold properties in this area can also offer an investment opportunity, as they can be used as vacation rentals or retreat centers.
Uluwatu: Uluwatu is a popular tourist destination located on the southern tip of the island, known for its beautiful beaches, stunning cliffs, and world-class surf breaks. There is more value for money in this area, when compared to Seminyak or Canggu, but the area is certainly growing in popularity, so the potential for ROI is quite high.
Sanur: Sanur is a laid-back coastal town on the Eastern coast of Bali, that offers a quieter alternative to some of the more crowded tourist destinations. Leasehold properties in this area can make for good investments, especially for family rentals.
It’s important to work with a reputable real estate agent and attorney to ensure that the leasehold agreement is legally binding and provides adequate protection for the buyer’s investment. At Harcourts, our team is experienced and professional, and can help you find the perfect property and walk you step by step through the purchase process. We will be by your side to answer any questions, and facilitate all of the contracts between you and the owner.
Every 10 minutes, somebody buys a property with Harcourts.
We are among the world’s most respected real estate brands, with 900 offices across 9 countries. Our network of sellers, buyers and investors reaches far beyond the shores of Bali.
Trust the experts at Harcourts Purba Bali. If you are thinking of buying property in Bali, or if you have been trying to sell your villa, ask us what we can do for you!
These listings are hand-selected by us because they are extraordinary properties that are priced to sell. Some are exclusive Harcourts listings reserved for us and our clientele, while others were chosen because they are exquisitely designed or located in the most enviable locations.
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