How to choose real estate in Bali

Buying property in Bali has become an attractive opportunity for foreigners looking for long-term investments or a place to live in one of the world’s most beautiful destinations. Bali, with its tropical landscapes, developed infrastructure, and a booming tourist sector, appeals to both tourists and investors. However, purchasing property in Bali as a foreigner requires careful attention to legal aspects, as Indonesian laws impose certain restrictions on direct ownership for non-residents.

Key features of buying property in Bali as a foreigner

In accordance with Indonesia’s property law (Hak Milik), foreign nationals cannot directly own land in Bali: land can only be owned by Indonesian citizens. However, there are several alternative ways for foreign buyers to acquire property, including long-term leases and corporate structures. These options allow foreigners to invest in real estate on Bali without violating local laws.

Alternatives to direct ownership

1. Leasehold (Hak Sewa): One of the most popular methods to acquire property for foreigners is through long-term leases of land or buildings. Lease agreements are typically made for 25 to 30 years, with the opportunity to extend them. This is a nice option for those who look to use the property for personal or investment purposes.
2. Right to use (Hak Pakai): This right allows foreigners to use land for residential purposes. Such agreements can last from 30 to 80 years and they can also be extended. This option is more stable compared to leasing and it is fully recognized under Indonesian law.
3. Right to build (Hak Guna Bangunan): This allows foreigners to construct and manage property on leased land for business purposes, such as hotels or commercial establishments. The term usually ranges from 30 to 50 years with the possibility of extension.
4. Through a company (PT PMA): Foreigners can establish a foreign investment company (PT PMA) that is entitled to own land in Indonesia. This method is popular among those foreigners who plan large-scale property development projects or want to run a business on the island.

Important considerations when buying property in Bali

When purchasing property in Bali, foreigners have to keep several key points in mind:

1. Document verification and ownership rights: Make sure that the seller holds full rights to the property and verify that there are no debts or disputes associated with it. A qualified lawyer can help you check all necessary permits and documents.
2. Zoning and building regulations: Different regions in Bali have their own rules on land use. For example, some areas may be designated solely for residential construction, while others are for commercial purposes. There are also restrictions on building near natural and cultural landmarks.
3. Financial matters and additional fees: While Indonesian banks rarely offer mortgages to foreigners, some international banks may provide financing. Buyers should also consider additional expenses such as the transfer tax (around 5% of the property’s value), notary fees, and legal costs.
4. Using real estate agents: A professional real estate agent experienced with foreign buyers can make the process of finding and purchasing property much smoother. He or she can help you choose the right property, negotiate with the seller, and make sure all legal procedures are followed.

Buying property in Bali can be a great option both for investment and for living, but it’s important to understand all the legal nuances and potential challenges. Foreigners can successfully invest in property on the island by using various legal tools, such as leases, rights of use, or by forming a company. With the right preparation and expert support, this process can be not only safe but also highly profitable.

Best areas to live in Bali

There are several areas in Bali that are especially popular with foreigners. Each of them offers its own unique lifestyle, infrastructure, and amenities. Let’s explore the main areas where expats settle and point out what attracts them.

Canggu

Canggu is one of the trendiest and fastest-developing areas in Bali. It’s especially popular with digital nomads and young entrepreneurs thanks to its well-developed infrastructure for remote work and vibrant social life. The area is full of co-working spaces, cafés, and restaurants with high-speed internet.
What attracts people: Canggu offers the perfect balance between work and leisure. You can surf in the morning and spend the rest of your day working on your laptop in one of the many cafés.
Infrastructure: An abundance of cafés, restaurants, co-working spaces, and shops makes Canggu a nice place to live.
Housing prices: You can rent a villa there at a more affordable price than in other popular areas and this makes Canggu attractive for young expats.

Ubud

Ubud is the cultural and spiritual center of Bali. This area is especially popular with those interested in yoga, meditation, and healthy living. Ubud has a peaceful atmosphere as it’s removed from the hustle and bustle of tourist centers.
What attracts people: Tranquility, a meditative atmosphere, and closeness to nature. Ubud is surrounded by rice paddies and jungles that create a perfect setting for solitude and spiritual practice.
Infrastructure: Ubud is home to many yoga centers, retreats, organic cafés, and markets featuring local artisan goods.
Housing prices: Rent is lower there than on the coast, which appeals to those looking for a calm, laid-back lifestyle.

Seminyak

Seminyak is a more upscale area known for its high-end restaurants, luxury villas, and boutiques. Expats who prefer a higher standard of living and access to elite amenities tend to settle there.
What attracts people: Seminyak is the center of trendy and luxurious living in Bali. The area is famous for its international restaurants, designer shops, and vibrant nightlife.
Infrastructure: There are luxurious spas, prestigious hotels, and fine restaurants in the area.
Housing prices: Rent in Seminyak is more expensive than in other areas, especially when it comes to villas with a high level of comfort.

Sanur

Sanur is popular among families and those who look for a more peaceful and relaxed lifestyle. It’s a quiet area with a long beach strip that makes it ideal for older expats or families with children.
What attracts people: A calm atmosphere without too much noise. Sanur is a great district for family living and vacationing. There are fewer nightclubs and noisy bars and the place is suitable for those looking for a quiet and comfortable life by the sea.
Infrastructure: The area offers schools for foreigners’ children and good medical centers.
Housing prices: Prices vary depending on proximity to the beach but in general terms, Sanur remains a more affordable area compared to Seminyak.

Conclusion

Each area in Bali attracts foreigners with its unique characteristics and lifestyle. From the vibrant social life in Canggu to the spiritual atmosphere in Ubud, expats find in Bali a place that suits their preferences and way of life. The choice of area depends on individual needs: family life in Sanur, or luxury living in Seminyak. No matter where you choose to buy property in Bali, it will always be a valuable asset.