Questions to Ask Before Buying Property in Bali

Property investment can be very tricky. It entails a lot of research, due diligence, and legalities that most people are not too accustomed to—and this is fine—as long as you have the right information, guidance and advice coming from industry experts who know the local rules that make up ownership/leasehold possible in the area.

Before considering buying a villa in Bali, whether it be a beachfront property, a long-term rental, rice field villa or building a commercial space, it’s important to ask the right questions and to find out as much as you can to assure that you are putting your hard-earned money in the right place.

Considering that you already know what you want, it’s time to move forward to educate yourself about your planned purchase. Here are some of the most important questions you should be asking before you bring out the bucks:

 

What type of ownership are you entitled to?

Which “Hak” is it? Hak literally means “Rights” and as an investor or a buyer looking to reside in Bali, you must know your rights. There are six different “rights” when it comes to land titles available in Bali. These are governed by Law No. 5 of 1960 regarding Basic Principles of Agrarian Law (the “Agrarian Law”)

  1. Hak Milik means “Freehold” for the purpose of Residential and/or Commercial with an indefinite duration. This one is only eligible for Indonesian citizens.
  2. Hak Guna Bangunan (HGB) means “Right to Construct” and Build buildings on the land for the purpose of Commercial building, with the duration of 30 years, plus an extendable duration of 20 years and another 30 years. This is eligible for Indonesian citizens and legal entities established in Indonesia.
  3. Hak Pakai means “Right to Use” with a duration of 25 years, extendable to 20 years and 30 years, up to 70 years, for residential purposes, and is eligible to residents in Indonesia seeking residential property.
  4. Hak Guna Usaka (HGU) means “Right to Cultivate” which is more for agricultural purposes, and with a duration of 25 years, extendable to 25 years and another 25 years, up to 75 years. Eligibility is for Indonesian Citizens who have been in the country for 35 years as well as legal entities established in Indonesia.
  5. Hake Sewa means “Right to Lease” for the purpose of residential property or a long-term sublease. This has a 30-year duration which can be extended for 20 years plus another 30 years after. This is for Indonesian citizens, legal entities established in Indonesia, as well as foreign citizens.
  6. Hak Milik Atas Satuan Rumah Susun means “Right of Ownership over Condominium residential or commercial” for the purpose of residential or commercial use, which lasts for 25 years, extendable to another 20 years, plus another 25 years and can last up to 70 years.

It is possible to own shares and assets as a foreigner based on Indonesian laws. The government has been very welcoming with foreign investment, especially when setting up with a “Limited Liability Companies (Perseroan Terbatas – PT) or a PT PMA “Penanaman Modal Asing,” a foreign investment limited liability company.

There are quite a number of requirements and process to set this up, and you will require guidance and assistance from professionals. Which leads up to the next question…

 

Do I need assistance?

There are many cases of misinformation and fraud, especially for foreign investors. It is important to find the right professionals who will help you in buying a villa or for your property venture in Bali.

It is safer to have someone who is credible and trusted, and with years of experience, not to mention, an agent/company that knows the island well.

Having the right assistance will assure that you are protected, and your wealth is invested in the right property.

For legal matters, it is always best to work with experienced professionals to guide you through an investment roadmap that is clear and structured, and that suits your needs. Established property companies work with professionals who can advise investors through the process.

Finding a credible real estate agent who will guide you through the process from start to finish is extremely important. Look for someone who has a wide experience, who is trusted and recommended in the real estate market. Finding someone who is based on the island makes all the difference in your experience.

 

Where is the property located?

Location is always a key aspect in your decision to purchase a property in Bali. Whether it be as your home, a beachfront villa, or a lifestyle investment, choosing the best location that fits to your needs makes all the difference in getting your money’s worth.

Bali is quite unique when it comes to location as the island offers a wide variety of possibilities. You might enjoy the hustle and bustle of Seminyak or Canggu, or a more tranquil space in East Bali or the cliff sides of Uluwatu.

A beachfront villa might also be a consideration for your next property investment, or a house surrounding the paddy fields may be a better option for you. Either way, it is important to know what you want, and scout the surrounding area and the neighborhood.

Accessibility can sometimes be an issue, especially in developing towns on the island. Doing a survey of the neighborhood with the professionals who know the island and the neighborhood will reassure your investment.

Location is also important if you would like to put your property on the rental market. A villa in Bali near the beach is most desired.

 

Buying, renting long-term or building?

There are different aspects in every property purchase, and it is important that you are aware of what deal you are getting into.

There are different legal contracts based on your investment, and once you are set on the amount and the type of investment that you are willing to put in, the next step is to find a credible real estate agent in Bali.

You can buy a villa in Bali, build your own dream home, or have a leasehold that suits your requirements. Knowing what you want is the critical step in your investment. The next step is to contact a real estate agent that is trustworthy and credible. Many claim to be, but can turn out to be unethical later on. Property investment can either be easy or difficult, heavily dependent on who you work with, the choice is yours.

Harcourts Purba has a long list of clientele from Indonesia and overseas, highly recommended and trusted by the real estate market in Bali. It is important that you work with a real estate company that knows what the client needs are, a company with different options and property listings, and one that is sure to guide you through the process, every step of the way.

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