Bali offers foreign buyers a unique opportunity to invest in a fast-growing property market, purchase a second home, or even move to this stunning tropical island. There is a wide selection of opulent villas and cosy apartments in the best locations with picturesque surroundings, so local housing is in demand among citizens of other countries. According to statistics, Indonesia is one of the top destinations in Southeast Asia among international real estate buyers. What do they purchase in the paradise island? Let’s talk about this in this article.
Content:
- Why do foreigners buy real estate in Bali?
- Where do foreigners buy real estate in Bali?
- What do foreigners buy in Bali?
- Buying property in Bali as a foreigner
- Conclusion
Why do foreigners buy real estate in Bali?
Generally, properties in Bali are competitively priced but often offer a higher level of comfort compared to similar units in Western countries. The local housing market has seen impressive growth in recent years, with prices for luxury residences rising by 15% annually, making the destination an attractive investment destination.
Another advantage is the potential income from the rental business. The island is a popular tourist destination, and you can benefit from the demand for holiday rentals. The yield can reach 15%, which is one of the highest rates in the world.
When purchasing property in Bali, it is essential to carry out thorough due diligence and consider aspects such as land ownership, local government approvals, and overall market trends. It is easy for foreigners in this regard, as in Bali; there are certified real estate agencies and lawyers who speak English fluently.
Another reason to buy a home in Bali is that it is one of the best places in the world to live and holiday. It offers the perfect combination of luxury real estate, vibrant local culture, and enchanting nature.
Where do foreigners buy real estate in Bali?
Choosing the right location is one of the most important decisions when buying real estate.
The largest expat communities are in areas such as Ubud, Sanur, Canggu, Uluwatu, and Seminyak. Each of these locations offers a unique lifestyle and property options to suit different preferences:
- Seminyak. This upscale coastal area at the island’s southern end is ideal for those looking for a luxury holiday home close to the ocean.
- Sanur. A quieter location on the east coast, it is the best place for those seeking a serene atmosphere away from the hustle and bustle of other popular tourist spots.
- Ubud. Known as the cultural heart of Bali, this town is a great option for architecture lovers who are interested in exploring the island’s rich history and culture. If you are into yoga and spiritual practices, this place is for you too.
- Canggu. This trendy area between Seminyak and Tanah Lot boasts a variety of cafes, bars, and restaurants, as well as charming villas surrounded by lush green rice terraces. Canggu is an excellent option if you are seeking to invest in a modern property with easy access to key social amenities.
- Uluwatu. This destination is favourite among surfers looking to catch waves or watch breathtaking sunsets from the cliffs overlooking the Indian Ocean.
What do foreigners buy in Bali?
Bali offers a variety of housing options, including villas, traditional houses, and modern residences. Depending on the type of real estate and land ownership you choose, local laws and regulations may vary. This is why it is important to contact estate agents, who will help you avoid translation issues: this way you will know for sure that you understand each other and that the property you have chosen is legally sound.
Typically, foreign investors choose housing based on two main criteria: location and cost. Property prices in Bali can vary greatly depending on factors such as neighbourhood, plot size, and living space. For example, in prime locations such as Seminyak and Ubud, villa prices are often higher due to their popularity among tourists and expats.
When searching for the perfect Balinese home, consider your lifestyle and the social amenities you need. You should not rely on the recommendations of other expats living in the island. They may have totally different views on comfort: some want a luxury villa, and they will consider it ‘inexpensive,’ while downshifters choose minimalistic bungalows and do not place high demands on them.
Luckily, Bali has options for everyone. Some properties offer premium amenities such as private swimming pools, spacious gardens, and stunning views. Expat families, however, prefer apartments with easy access to local shops, schools, and medical facilities.
A modest home in the city centre can cost around an average of $100,000, while high-end villas can cost anywhere from $300,000 to $1 million and even more.
Buying property in Bali as a foreigner
When considering buying a home in Bali, it is important to understand the intricacies of local legislation.
There are several options for owning property in Indonesia. The most common ones include obtaining Hak Pakai (right to use), Hak Milik (right to own), or Hak Guna Bangunan (right to build). For an overseas buyer, a leasehold property is often the safest and most affordable option.
Hak Pakai (HP) is a right-to-use title that allows foreign citizens to legally own property in Indonesia. According to local law, you can use HP for a maximum of 80 years. This term consists of an initial period of 30 years, an extension of 20 years, and another extension of 30 years. This title applies to both land and built property.
Hak Guna Bangunan (HGB) is a right-to-build title granted to foreign companies that allows them to own property in Indonesia. HGB titles are valid for a maximum of 60 years, including an initial period of 30 years with 2 possible extensions of 20 and 10 years.
Another option for an overseas buyer to purchase real estate in Bali is through a foreign owned company, Penanaman Modal Asing (PMA). PMA can own the land under an HGB title, giving you the right to build and manage your property. Establishing a PMA company provides greater protection than using a local representative, which carries some risks. However, keep in mind that forming a PMA entity involves a more complex legal process and additional costs.
Working with experienced estate agents can make buying a home in Bali much easier. An expert who has a thorough understanding of titles, land ownership, and due diligence procedures will help you navigate Indonesian legislation and find the right property.
Conclusion
Investing in Balinese property may be a good idea if you are looking for a second home or plan to generate rental income. However, it is critical to understand Indonesian property laws, carry out due diligence, and work with experienced estate agents to better navigate the local market.
Many overseas nationals have successfully purchased real estate in Bali, which contributes to an enjoyable holiday or provides stable additional income. If you are considering purchasing a studio, apartment, or villa in the island, the catalogue on our website contains a multitude of available options. We work only with trusted agencies and developers.