Yes, foreigners can own freehold property in Bali.
But only through a foreign-owned limited liability company called a PT PMA, where ownership is reliant upon the below factors, but, no foreign individual can purchase the same.
Note that buying freehold is not straightforward, rather, you buy HGB-titled land through a PT PMA valid for 30 years, which can be extended for 20 years, and renewed for a further 30 years, giving the PT PMA an 80-year lease. This HGB title allows for that land to be transferred in the future, which when sold to an Indonesian national can be converted from lease back to freehold ie HGB to Hak Milik.
To better grasp the process, it is important to recognize the relevant land titles:
Hak Milik is the Right to Own
Hak Guna Bangunan (HGB) is The Right to Build
Hak Pakai is the Right to Use
So how do you buy a freehold property in Indonesia?
The most secure means to purchase a property in Bali is by registering a PT PMA, granting you the necessary permission to acquire the land or villas in the name of the company. The business license should be for real estate, as that allows the company to buy, sell and develop land in Indonesia. This affords the buyer legal protection, as the PT PMA is highly regulated.
The HGB title allows the PT PMA to construct and own buildings or other structures on Hak Milik and other types of land. The PT PMA name will then be on the land certificate registered with the Indonesian Land Office. The Hak Pakai is granted to PMAs and foreign individuals, but they must be residents or domiciled in Indonesia.
Can foreigners own freehold apartments in Bali?
Foreigners are permitted to own freehold apartments and offices in Indonesia, but this only applies to condos and office blocks, as foreigners cannot own the land that the building occupies. Apartment blocks are becoming quite fashionable, with developers presenting new studios plus 1, 2, and 3-bedroom units in Berawa, BatuBolong, Seseh, Sanur, and Umalas, many being purchased off-plan. To the investor that is looking for minimum maintenance and personal management, an apartment offers the ability to lock and leave, while a villa needs greater care and attention.
Is a PT PMA the only choice?
If you are considering, or have been advised to purchase property using a nominee, we recommend against it. For clarity’s sake, the two most commonly used versions of a nominee structure are either:
(a) Through a power of attorney, where the nominee purchases land, then offers irrevocable authority stating that land belongs to you; or
(b) You provide a loan to a nominee to purchase land, and then you and the nominee enter into an agreement where the land is collateral for the loan in the form of a mortgage structure.
Both of these nominee mechanisms are profoundly risky and, even if the nominee is loyal, should an accident befall your trusted local partner, the family could take possession of the property, leaving you with absolutely no legal recourse for dispute.
Is there any financing available to foreigners?
There is no financing available to foreigners in Indonesia, nor any accessible collateral arrangements, so buyers must settle in cash or make other monetary plans from outside Indonesia.
Is it worth owning a property in Bali?
Owning a villa or apartment in Bali can be an excellent investment, rewarding you with so many fabulous holidays, and, depending on how luxurious your style is, can return a decent profit. At Bali Realty Holiday Villas, we eliminate any stress from the management & marketing of your villa. We design and develop your villa brand which we market to the world through our efficient sales, reservations, and accounting teams, and through our many distribution platforms. We offer awesome Bali villa management by arranging the staffing with ongoing training, villa maintenance, and security. Our many reviews reflect how incredible the staff performs and how well-maintained are the villas.
We keep a firm eye on land sales, new villa developments plus existing residential and rented properties, as a result, we are ideally suited to recommend the best investment in terms of area, style, size, and other features that visitors to Bali request and book, consequently the design and location of your Bali villa becomes prime real estate.
Purchasing any property in Bali can be difficult, so, we recommend that anyone considering buying in Indonesia, should work with a professional entity that speaks your language, to guide you through the maze of regulations, licenses, titles, certificates, and permits, not forgetting zoning, property access, water, electricity, and access to the right notary, legal and tax consultants. At Bali Realty we are on hand to help you by removing all obstacles for a seamless acquisition.
About the author
Nathan Ryan is one of the best real estate agents in Bali and will be able to help you secure your wonderful piece of paradise in Canggu. He’s got a wealth of experience and knows everything there is to know about buying and selling real estate in Bali.