8 Tips When Buying A Villa in Bali
If you are considering buying a villa in Bali, it is important to conduct thorough research to find the right option for your needs. By doing your research, you can increase the chances of finding a property that meets all your requirements and helps you achieve your goals.
Here are 8 tips on what to look for when buying property in Bali:
1. Know the Property types in Indonesia
It’s important to know that in Indonesia, foreigners can not own freehold land, which means you’ll not be able to buy a freehold property easily. While there are some ways around this, they are all tricky and require sound legal advice.
The most straightforward way to buy a property in Bali is to go for a leasehold. Bali leasehold is a form of long-term property ownership in Indonesia that involves leasing a property for a set period, typically up to 25 years. During this time, the leaseholder has exclusive rights to the property, such as the right to build and inhabit the property, as long as they follow local laws and regulations. The lease is often renewable after the initial period and may be sold or transferred to another person.
The terms and conditions of any lease extension are usually built into the original agreement. Most lease agreements have some extension option, although you should be careful to fully understand the means by which the extension may be activated.
Leasehold also has some advantages, the main advantage being that it is a more affordable option. For example, if there were two identical villas side by side, one leasehold over a 40-year period and the other freehold, the leasehold villa would generally be about 2/3rds of the price of the freehold option.
In terms of the actual process of buying a leasehold in Bali, you will usually need to work with a local lawyer or real estate broker to ensure that all of the paperwork is in order. You will likely need to provide detailed information about your finances and any other relevant documents.
2. Location
Buying a property in Bali requires careful consideration of many factors. Location is one of the most important ones, as buyers want to find a spot that best suits their needs and preferences. Once you have found a suitable location, you should start looking for a property by surveying it and the surrounding area and researching any current or future developments. This will help you make an informed decision before investing in your Bali property.
3. Size of Property and Land
Bali offers a wide variety of villas to choose from, each with its own unique market. Those looking for a shorter getaway may opt to rent smaller villas in the town, while those seeking a more urban experience may prefer larger villas.
If you have the space, consider constructing two or more self-contained villas with their own swimming pool, garden, and entrance. This way, you’ll have the flexibility to rent out the villas individually or as a group. If you have a large property, you can also use it to build a large destination villa fit for weddings, birthdays, anniversaries, parties, and corporate events.
4. Accessibility
Tourists often prioritise accessibility when renting property, so it’s important to make sure your property has reasonable driving or walking distance to local amenities, such as restaurants, entertainment, shopping, and recreational areas. Additionally, check that the road leading to your property is suitable for cars and other vehicles, as many roads in Bali are quite narrow. Making sure these factors are met will ensure your property is desirable to tourists.
5. Building Materials
It is important to consult a qualified building surveyor before selecting any building materials. They can assess the condition of the building, electrical systems, plumbing, equipment and check for pest infestations. For older buildings, more extensive surveys may be needed to determine the building structure, and a building surveyor can provide assistance. By obtaining professional advice, you can ensure the quality of materials and the integrity of the building.
6. Zoning Restrictions Check before Buying A Villa in Bali
When purchasing property in Bali, it’s important to be mindful of zoning restrictions. Before beginning construction, you must make sure the land your building is on is in the right zoning and obtain a building permit (IMB). For example, if the land is classified as Green Belt, you are not allowed to build on it. To ensure you are legally compliant, it’s best to consult a legal specialist.
7. Land Certificate
To ensure that your land matches what is written in your land certificate, it is important to check its details. This includes verifying the location and boundaries of the land. To do this, you should visit an authorised notary and present your land certificate and associated purchase documents. Doing this will ensure that your land is properly documented and secure.
8. Construction and Building Licenses, Taxes and Fees
A rental license or Pondok Wisata license is compulsory if you want to rent a property in Bali. Additionally, construction taxes, known as PPn, must be paid either by you or the contractor or developer. However, navigating the Indonesian bureaucracy can pose a challenge, and you may find yourself unable to track down the developer or contractor after the fact, resulting in unpaid PPn.
There are also other fees you’ll need to consider:
- Agency/Agent fees
- Transfer tax
- Land deed costs
- Notary/Lawyer fees
- Public Registration fees
- Transfer duty
Getting a vacation home or making a permanent residence in Bali is a dream for numerous individuals. But, this is a big decision and it’s essential to do your due diligence to make sure you don’t become a victim of a scam or have unexpected expenses.