How to Buy Property in Bali as a Foreigner

Bali is not only a comprehensive travel and holiday destination, but investing in Bali attracts an increasing number of foreigners. The island’s diverse real estate market offers something for everyone, from luxurious beachfront villas to tranquil homes nestled in the lush greenery.

In this article we talk about how to buy property in Bali as a foreigner.

Property due diligence in Bali

Before you buy land you must go through with the due diligence on the following:

1. Check if the seller has the right to sell. For example, if the property belongs to a married couple, the contract requires both of their signed agreements.
2. Do research on Bali’s land zones and invest in the one that suits your project best.
3. Make sure there are no unpaid taxes by the landowner. 

Doing diligence is an important step before signing any contracts and doing any further business with the landowner. Without going over any of these steps, you might lose your investments. 

Emerhub can conduct the due diligence on your behalf. Contact our property consultants by filling out the form below.

Ownership rights for buying property in Bali

You can do property transactions either with freehold or leasehold properties. The latter is a long-term lease, which gives you the rights to the property for the duration of the lease (usually anywhere between 15-30 years).

Freehold gives you ownership over the property. However, foreign nationals can only hold freehold titles like the Right to Use or the Right to Build by registering a company (PT PMA).

It used to be common practice to hold the freehold title by using Indonesian nationals as nominees. Updated knowledge shows you no legal protection, and you can lose all your investments.

Types of property rights in Bali

The Basic Agrarian Law, regulates property and real estate ownership in Indonesia, with two types of rights relevant to owning property for foreign investors.

Foreign investors buying property in Bali need do so through a limited liability company(PT PMA), which can then hold Hak Guna Bangunan or Hak Pakai property rights.

Right to Build (Hak Guna Bangunan) 

The Right to Build allows Indonesian individuals or foreign investors with established companies in Indonesia (PT PMA), to build upon and utilize land. 

The initial grant is for up to 30 years and foreign investors individually don’t need to attain this right.

Right to Use (Hak Pakai) 

This right permits the use of land. It’s accessible to both citizens and foreigners residing in Indonesia, as well as foreign and local organizations. 

The government or by the agreement with the landowner determines the conditions of this right. As a foreign individual, to obtain this right, you need Indonesian residency (KITAS). Renew the initial right after 30 years.

Land zoning categories in Bali for property development

Bali’s land zoning categories guide property development on the island. These classifications help shape the landscape of Bali, influencing where property can be built.

• Green zones: Primarily designated for agricultural activities, emphasizing the preservation of Bali’s natural resources and landscape. You can construct buildings like villas but it comes with a lot of limitations. 

Popular places: Ubud, Nusa Dua, Sanur, Mount Batur, Amed, Lovina.

• Yellow zones: For agricultural use but could be converted for residential purposes. Transitioning from agriculture to residential use requires adherence to specific procedures to balance environmental sustainability. 

Popular places: Ubud, Jimbaran.

• Red zones: Conducive for commercial activities, allowing the construction of buildings to house trade, services, and industrial establishments. 

Popular places: Denpasar and Seminyak.

• Orange zones: Designated for the construction of dwellings such as houses and apartments, catering to the housing needs of the local and expatriate population.

Popular places: Denpasar, Kerobokan, Pererenan. 

• Special Economic Zones (SEZ): These are areas allocated to attract foreign investments and promote economic development, offering various privileges and tax incentives to businesses within these zones. 

Popular places: Sanur and Nusa Penida.

• Pink zones: Aimed at the tourism industry, allowing for the construction of hotels, resorts, and villas.

Popular places: Kuta, Seminyak, Nusa Dua,​ Mount Batur, Amed, Lovina, Uluwatu, Jimbaran, Ganggu, Seminyak.

Each regency in Bali has its zoning regulations, typically available on the regency’s official websites. However, these zoning maps may not always be up-to-date. It’s crucial to verify the current zoning rights directly with local authorities before proceeding with any property transactions. 

Steps to buy property in Bali as a foreigner

1.  Submit completed property obtaining forms to the Indonesian National Land Office (BPN) requesting a certificate over the property, including relevant supporting documents. A representative such as Emerhub usually goes through with this.
2. Provide proof of land payment and the conditions for Hak Guna Bagunan or Hak Pakai.
3. If you are looking to build on your land in Bali, acquire the Right to Build with the correct building permit (PBG).
4. The BPN will issue the certificate under your company’s name.

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) certificates. As with setting up a PT PMA, Emerhub consultants are here to assist you throughout the entire process.

Buying property in Bali with Emerhub as your buyer’s agent

Emerhub provides services for those looking into buying property in Bali as a foreigner, including finding specific types of properties, ensuring the security of investments, handling negotiations, and simplifying legal processes.

Emerhubs support aims to assist foreigners in navigating the Bali property market. To get a consultation for buying property in Bali, fill out our contact form below.