For foreigners that are willing to live a house in Bali, there are few ways on how to get them. You may just rent a house, a literal purchase, or buying a house as PMA or individual. In this article, we are going to deliver the right way to live a house in Bali especially for foreigners.
Renting a Property
Renting a property is probably the simplest form of being able to use a property. There are several benefits offered. However, there are also risks that may arise. In addition, there are several things that the tenant must take care of before signing the agreement. he rights and obligations of tenants and property owners should be explained in as much detail as possible to avoid future disputes. The rental agreement can be signed by anyone, even if you are not a resident of Bali. This regulation simplifies the rental procedure. Since this type of contract is not the domain of the National Land Agency (BPN), the term of the lease is not limited and can continue to be extended. However, in reality the lease term does not exceed 25 years. Understand different legal systems.
The legal system governing property and land in Bali is under the Basic Agrarian Law no. 5 of 1960. Unlike the estate market in many western countries, Indonesian law requires that the land owner is an Indonesian resident. Thus, it is not possible for foreigners or foreign companies with foreign investments to become land owners who have full rights. However, there is an alternative to full ownership, called freehold, that you can take advantage of. The most common way to own property in Bali is through PT PMA, the only ownership company open to foreign nationals. Get the right certificate
Legislation dealing with estate has several documents that regulate the rights of property owners. The documents that foreigners can have are:
Hak Guna Bangunan (HGB)
The Hak Guna Bangunan (HGB) certificate gives the owner the freedom to build property on the land, as stated in the certificate. This certificate is valid for 30 years and can be extended for another 20 years, so the total period is 50 years. During those 50 years, the property belongs to you completely.
When it expires, the certificate owner can reapply a new certificate under the same conditions. In addition, the HGB certificate is recognized by the bank and the related property can be used for mortgage or other securitization purposes. HGB owners are free to sell or exchange their property and if purchased by Indonesian citizens, they may change their status to full ownership. Hak Guna Bangunan is guaranteed by BPN and foreign nationals can apply through PT PMA or if they have a valid residence permit (KITAS or KITAP). This is the most common and recommended way of how to build property in Indonesia.
Hak Pakai (Right of Use)
Hak Pakai (HP) is a type of long-term lease. Land that has HP certificates can be used by foreign nationals for purposes agreed to by both parties. The usufructuary rights are guaranteed for the first 25 years with the possibility of extension not exceeding 80 years in total. Hak Use is usually used by companies that need land for manufacturing activities or international companies for social, religious and other events. You cannot deal with banks or other financial institutions because there are no rights other than usufructuary rights associated with this certificate. HP can be given to foreign nationals by local residents or local governments. Owners of foreign companies, PT PMA or residence permits (KITAS or KITAP) may apply.
Hak Guna Usaha (Cultivation Rights)
Hak Guna Usaha (HGU) allows the owner to use the land for agricultural and agricultural purposes. This right is valid for 25 years and can be extended for up to 35 years. A PT PMA company needs to be owned to get this right. Ownership of the Flat Unit This relatively new government regulation allows foreigners to own a unit, an apartment or an office, in a multi-storey building without being the land owner of the property. The validity of this right differs depending on the land on which the property is built. You need to know that there are other types of ownership such as Hak Milik, Lease Rights and Management Rights that foreigners cannot own.
Purchase Through a Local Representative
After living in Bali for a long period of time and getting to know many locals, some expats decide to buy property through the help of their local friends. However, buying property in the name of an Indonesian citizen is risky. Although the foreigner will sign an agreement with the local representative, the document has no legal force and the legal owner is an Indonesian citizen. If this case is brought to court, the law will most likely favor Indonesian citizens or the land will be confiscated by the government because it is illegal to sign an agreement as a foreign national’s representative.
Buying as PT PMA or individual
As previously explained, foreigners can own land or property without having to form a PT PMA if they have a valid residence permit (KITAS or KITAP). However, the difference between the two is significant. Basically, permanent residents in Bali can buy property or land for residential purposes only. The minimum value in Bali for residential houses is IDR 3 billion (USD 225,000) and IDR 2 billion (USD 150,000) for apartments. However, if you want to buy property for investment or business purposes, then you must form a PT PMA. In either case, E-Visa Bali can assist you through professional services to assist you in obtaining permanent residency in Indonesia or establishing a PT PMA with foreign capital. You can get your PMA with E-Visa Bali to Regist your administration service to buy property asset in Bali.
