Buying a House in Bali, this is what you need to know

March 7, 2024

Investing in Bali's real estate and throughout Indonesia has become more accessible with the implementation of new laws aimed at actively encouraging foreign property investments, particularly in the captivating destination of Bali. This evolving regulatory environment is reshaping Bali's real estate market into an appealing hub for property investment.

The trend of property acquisition in Bali has experienced a remarkable surge in return on investments and capital gains, with property prices soaring up to 40% in some popular areas. This represents the highest increase rate in land prices across Indonesia.

In terms of taxes, the Indonesian government has recently revised the luxury goods (PPnBM) tax policy for properties. Previously, apartments with a selling price of at least IDR 10 billion and houses with a selling price of at least IDR 20 billion were subject to a 20% luxury goods tax. The latest revision has elevated the minimum price to IDR 30 billion for all property types, with the intention of stimulating Indonesia’s luxury property sector.

Bali Real Estate Market 2024

Following the global lift of COVID restrictions, Bali has witnessed a resurgence in its tourism sector, evident in the increased total tourist arrivals since 2022. Consequently, the Accommodation and Food Services Industry’s contribution to Bali’s Economic Growth surged by 5.83% in the first semester of 2023.

Based on last year’s report, the real estate market has consistently experienced an increase in prevailing prices from the second quarter of 2022 to the second quarter of 2023: 2.61 for the second quarter of 2022, 2.64 for the first quarter of 2023, and 2.72 for the second quarter of 2023.

Meanwhile, actual prices during that time slightly fluctuated but still managed to increase over time for the second quarter of 2023: 1.90 for the second quarter of 2022, 1.86 for the first quarter of 2023, and 1.92 for the second quarter of 2023. The track record of Bali's real estate sector appears promising for those interested in engaging in real estate business in 2024.

Using technology to make it easier to get permission for Bali real estate.

Each local government now uploads a detailed spatial plan to Indonesia’s Online Single Submission (OSS) system, a centralized digital system for processing business-related permits. This facilitates businesses in self-assessing their proposed activities, streamlining the licensing process.

Another significant change is the approval for foreigners to own apartments under a Freehold Title Certificate for Apartment units built on land with a Right to Build or Right to Use permit. While this streamlines the process, certain conditions and requirements remain, particularly for foreign investors starting construction from scratch.

Building owners must appoint a group of building service providers, including a planner, manager, and supervisor, which may increase production costs.

Is it possible for Foreigners to Buy Real Estate in Bali?

Foreigners can own real estate in Bali under the Right of Use and Right to Build, providing ownership over a housing unit or apartment for a specific validity period, subject to extension according to the law. Based on Government Regulation No. 18/2021, foreigners with a stay permit in Indonesia can own residential houses on land with the right of use and apartments with the right of use and the right to build.

However, certain restrictions apply, including price limitations, one plot of land per person/family, and a maximum of 2,000 m2, which can be exceeded in specific circumstances with a positive impact on the economy.

What to be careful about when buying a house in Bali.

Despite the promising market and relaxed regulations, potential property buyers should be cautious and avoid common mistakes when investing in Indonesia, particularly in Bali. These include thorough verification of land certificates, ensuring road access agreements, understanding zoning and land aspect regulations, compliance with tax regulations, conducting due diligence, awareness of different property rights, seeking professional assistance, and understanding foreign ownership regulations.

Depending on the intended activities, various types of property rights are available, such as Right to Build, Right to Use, Right of Cultivation, and Right of Strata Title, each serving specific purposes.

Buy property in Bali easily if you're a foreigner.

Navigating Bali's vibrant real estate market requires insights from experienced consultants and agents. Bali International Guiding offers comprehensive services to assist in setting up secure land and property investment plans, including due diligence and understanding foreign ownership regulations. To explore your options, please fill out the form below, and let us know your specific needs.

Let's Get in Contact

Contact Form
crossmenuchevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram