Buying a property in Bali: The Essential Guide
Are you considering buying a property in Bali? This article contains essential guides to help you understand the best ways foreigners can buy houses, land, or apartments within Bali and information about the Bali property market. In addition, we will guide you on the most recent law so that you don’t get caught in a bind.
With the introduction of new laws which encourage foreign investors to invest in property across Indonesia, The new property regulations make Bali an attractive location for property investments.
Globally, property markets stopped moving because of the outbreak of COVID-19. Indonesia was not an exception.
The long-term outlook of Indonesia appears to be positive. Factors such as relaxed rules for foreign ownership of property and affordable property prices, and buyers putting off their decision-making process until the present year, could bring in more property investors, thus aiding in boosting the market, and causing growth through the second quarter of 2021.
Bali Property Investment Outlook
Bali has experienced an explosion in investment returns in capital gain. Property prices rose by 20%, and in certain areas, by 40%, the most significant increase rate for property prices in Indonesia.
Regarding taxes, the Indonesian government has amended its luxury items (PPnBM) tax policies to apply to homes. Before this, houses with a price of at minimum IDR 10 billion or houses with a value of at minimum IDR 20 billion would be subjected to 20% luxury goods tax. The most recent revision has increased the minimum price to IDR 30 billion (for any property). Raising the minimum price is intended to help boost the high-end property market.
Although 2020 was a slow year, 2019 was a booming one. AirDNA, a top data, and analytics company for the world’s short-term rental market reported the growth of over 42,000 rentals in Bali available on Airbnb as well as HomeAway. The active rentals represent an increase of 7% in the quarter over 2017, and five-sevenths of the rentals being occupied, at the average rate per day of 144 dollars.
Signs of Bali Recovering
Bali is well on the way towards recovery, in the midst of a process whereby Bali’s local administration begins the island-wide vaccination program providing hospitality workers with the top priority, and the central government is reopening its borders to certain visa holders.
And as per the Minister for Tourism and Creative Economy, Sandiaga Uno, in April 2021, the number of visitors from Bali was estimated at 8,000 people per day, which is 50% of the pre-Covid-19 national arrival.
Things to Avoid When Buying Property in Bali
The promising market and the loose regulations are great news for foreigners considering purchasing or leasing property in Indonesia, particularly Bali. There are eight mistakes that buyers should be aware of before making a decision:
- In Indonesia, the land certificate lays out the legal rights of an asset. A thorough examination of the land certificate will allow the investor to keep any confusion that may arise after investing.
- Some properties are not equipped with road access. This often is a cost-intensive process to construct and/or gain access to the neighbor’s property. A contract with the neighbor before construction can help avoid costly expenses later.
- There are two terms that investors must be familiar with: Zoning as well as Land Aspect. Zoning covers a vast area that dictates the way your land is used in accordance with regulations of the government. The Land aspect is only applicable to one piece of land.
- The zoning restriction on the land is vital as it determines whether you are able to conduct the planned activities within the zone. For example, if the land is situated in the “green zone,” you won’t be able to construct any structures on it.
- In the absence of understanding tax regulations applicable to real estate and not stating the price is lower on documents could be a legal risk or even deny transfer in title from the purchaser.
- The purchase of a home without conducting due diligence is a risky venture. It is recommended to perform due diligence to minimize risk or any problems.
Depending on the type of activity you wish to pursue, various types of rights to property are offered to the holder
- Rights to Build – Allows the owner to construct properties on the land granted.
- Right to Use is typically used by businesses with an official certificate of manufacturing.
- Right of Cultivation allows its owner to use the land for farming or agricultural purposes.
- The Right of Strata Title permits foreigners to buy an apartment, a unit, or office in a building with multiple stories, without the need to be the owner of the land on which the property is situated.
How can foreigners buy properties in Bali?
Despite the relaxed law enforcement, purchasing property in Bali can be stressful.
Excel Bali Real Estate Excel Bali Real Estate comprises a group of committed professionals who have, for the past 17 years, been involved in every aspect of Real Estate on the Island. We have dealt with investors from all over Indonesia and foreign buyers.
Our guiding principle is the need to Excel in our services. We have built long-lasting, personal relations with our clients locally and internationally. We also welcome new clients to experience our level of service and assistance.
We have strong connections within the community of local businesses. We use this to provide customers with an exclusive buying experience that isn’t available at any other agency.
Check out what our clients have to say on our behalf, or contact us with any questions you may have regarding Bali the Real Estate market.