Bali property and bali villas for sale - bali construction tips bali home construction tips : 7 essential things to know before building a house in bali

Bali Home Construction Tips : 7 Essential Things to Know Before Building a House in Bali

Building a house in Bali can be a dream come true, but it requires thorough preparation and understanding of local regulations, cultural nuances, and environmental considerations. Whether you’re planning a serene holiday home, a lucrative rental property, or a permanent residence, here are five crucial aspects to keep in mind before embarking on your construction journey in this beautiful island paradise.

In recent years, the Indonesian island has become especially popular with digital nomads and those looking to escape city life. More and more foreigners are interested in owning property in Bali, either for investment purposes or to call home.

Data from Indonesian-based real-estate platform Rumah123 showed that demand for properties by foreign citizens in Bali’s Badung Regency has increased by 92.1% compared to 2022, per the daily business paper Bisnis Indonesia. The Bandung Regency includes tourist spots like Seminyak, Canggu, and Uluwatu.

“Growth of foreigners’ demand in properties in 2023 has seen rapid development compared to 2022. The potential for the foreign market is expected to further accelerate growth and advancement of this industry in 2024,” (Marisa Jaya, head of research at Rumah123)

1. Legal and Ownership Regulations

Prepare for some level of paperwork chaos in Bali. Information is not always documented properly and can cause a headache for foreign buyers.

Foreign Ownership Restrictions: In Indonesia, and consequently in Bali, foreigners cannot directly own freehold property. This means that you, as a foreigner, cannot hold a Hak Milik (freehold) title. Instead, you can consider other legal avenues:

  • Leasehold (Hak Sewa): This allows you to lease land for a period (typically up to 25 years, extendable).
  • Right to Use (Hak Pakai): This grants you the right to use the land for a specific period (usually 25-30 years, extendable).
  • Foreign Investment Company (PMA): Setting up a PMA allows a foreigner to own property under the company’s name.

Land Titles: Understanding different land titles is crucial:

  • Hak Milik: Freehold ownership, not available to foreigners.
  • Hak Pakai: Right to use, suitable for foreigners.
  • Hak Sewa: Leasehold, a common choice for long-term leases.
  • Hak Guna Bangunan (HGB): Right to build, often used for commercial properties.

Due Diligence: Before purchasing land, conduct thorough due diligence:

When buying a leasehold property, buyers should engage a notary or lawyer to check that the land title is clear, current, and real. The buyer should ask the seller for documents detailing the history of the land all the way back to the original landowner. You might be the third or fourth buyer, and if someone hadn’t previously paid the taxes, the government could come after you for those taxes.

Verify the land’s legal status and ensure there are no disputes.

Confirm zoning regulations and ensure the land is designated for residential use.
Check for any restrictions or easements that might affect your construction plans.

2. Ensure the Street Leading to Your Plot Has a Name

When looking for leasehold property in Bali, it’s essential to ensure there’s a public road leading to your plot. This may seem like a minor detail, but it can significantly impact your access, legal standing, and future property value.

Verify Public Access:

One critical aspect to consider is verifying that the road leading to your property is a recognized public road and not private land. A named public road ensures legal and uninterrupted access to your property. Without this, you might face serious issues, including being landlocked or unable to obtain necessary permits.

Avoid Landlocked Situations:

There have been instances where buyers thought they had access, only to discover that the road they were using crossed someone else’s private property. In such cases, the property can effectively become landlocked if the landowner decides to restrict access. This not only affects your ability to reach your property but also can complicate any future sale or transfer of the land.

Legal Implications:

In Bali, having a named street can also simplify legal and administrative processes. For instance, obtaining building permits, connecting utilities like water and electricity, and registering your property with local authorities are all more straightforward when your plot is accessible via a recognized public road.

Impact on Property Value:

Accessibility directly affects property value. Properties with easy, public access are more desirable, which is an essential factor if you plan to rent out or sell your property in the future. Conversely, properties that are difficult to access or have ambiguous access rights can see diminished values.

3. Test the Area Before Committing

Recognize that vacationing in a place is quite different from living there long-term. A holiday hotspot might not translate to the day-to-day reality of residing in the same area. Before committing to buying property in Bali, consider renting for a year to truly understand the living conditions and lifestyle.

Test the Area with a Yearly Rental:

Before making a significant investment, renting a property on a yearly basis allows you to experience the area as a resident rather than a tourist. This period will give you a clearer perspective on what daily life is like, including the conveniences and challenges.

For Example: being close to popular places in Bali, like Canggu, can mean getting caught in traffic, especially during rush hour, which is something to consider when picking a spot to build a home.

4. Cultural and Environmental Considerations

Bali has a rich cultural heritage and strong local traditions. When building a house, it’s important to respect these cultural norms:

  • Community Consultations: Engage with local priests or community leaders to ensure your plans are in harmony with local customs and spiritual practices.
  • Ceremonial Practices: Certain ceremonies may be required before and during construction to seek blessings and ensure harmony.
  • Environmental Impact: Bali’s natural beauty is one of its greatest assets, and there are stringent regulations to protect it:
  • Building Restrictions: Regulations may limit building height, especially near temples and coastal areas.
  • Sustainable Practices: Use eco-friendly materials and construction methods to minimize environmental impact.
  • Flooding and Erosion: Consider natural risks like flooding and erosion when selecting your site and planning your construction.

5. Construction Standards and Quality

Local Building Practices: Construction standards in Bali can differ significantly from those in Western countries. It’s crucial to work with reputable contractors who understand local methods and regulations:

  • Contractors and Architects: Choose professionals with experience in Bali to ensure compliance with local standards.
  • Quality Control: Regularly monitor the construction process to ensure quality and adherence to your plans.
  • Materials and Design: Bali’s tropical climate demands specific design considerations:
  • Humidity and Heat: Use materials that can withstand high humidity and heat.
  • Seismic Activity: Incorporate earthquake-resistant designs and materials.
  • Ventilation: Ensure good ventilation to keep your home cool and reduce mold growth.

6. Costs

Budgeting: Building a house in Bali involves various costs beyond just construction:

  • Land Purchase: Prices can vary greatly depending on location.
  • Construction Costs: Include costs for labor, materials, and design.
  • Permits and Taxes: Factor in the costs for necessary permits and taxes.
  • Unexpected Expenses: Always budget for unforeseen costs.

7. Permits and Bureaucracy

Building Permits: Obtaining the necessary permits is a critical step:

  • IMB (Izin Mendirikan Bangunan): Building permit required for all constructions.
  • AMDAL (Analisis Mengenai Dampak Lingkungan): Environmental impact assessment, necessary for larger projects.
  • PBG (Persetujuan Bangunan Gedung): Building approval, replacing the old IMB system.

Working with Authorities: The bureaucratic process in Indonesia can be time-consuming:

  • Local Consultants: Hire a Local Consultant: A local legal advisor or property consultant can help you navigate the legal and bureaucratic landscape efficiently.
  • Patience and Persistence: Be prepared for delays and ensure all your documents are in order.

Understand the Local Market: Research the local real estate market to understand property values, rental yields, and potential resale opportunities. This knowledge will help you make informed decisions about your investment.

Community Engagement: Building good relationships with the local community can make your construction process smoother and more enjoyable. Respect local customs and participate in community activities to build goodwill.


Building a house in Bali is a significant investment that requires careful planning and consideration of various factors. By understanding the legal framework, respecting local culture, ensuring high construction standards, budgeting realistically, and navigating the bureaucratic processes efficiently, you can turn your dream of owning a home in Bali into a reality. Embrace the journey and enjoy the process of creating your own piece of paradise in this beautiful island.

By following these guidelines, you’ll be well-prepared to embark on your building project in Bali, ensuring it’s both legally sound and culturally respectful, resulting in a beautiful home that you can enjoy for years to come.

2 Comments. Leave new

  • meremortal55
    July 8, 2024 6:07 am

    although this may sound obviously for some, the MOST IMPORTANT thing when building a home in bali is to BE ON-SITE OFTEN. not to pay monies for the next phase of building unless the first phase is totally complete and to thoroughly research the builder you intend to use eg check out past and current construction projects. if the builder hasn’t got any current projects at the time of your building application with him then, possibly, he is bankrupt.

    • Thanks for the crucial Bali building tips! Being on-site often and verifying completed phases before moving forward are excellent points. I’ll definitely add this info to the Bali property resources.


Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.
You need to agree with the terms to proceed