Post: 9 Basic Things To Know Before Purchasing A Property

Buying property in Bali can be an exciting and lucrative investment opportunity. However, it’s essential to navigate the process carefully to ensure a smooth and successful purchase. Here’s a guide to help you understand the key steps and considerations when buying properties in Bali:

  1. Research and Planning:
    • Familiarize yourself with Bali’s property market, regulations, and legal requirements. Seek advice from professionals such as real estate agents, lawyers, or consultants with local expertise.
    • Determine your budget and the type of property you are interested in (e.g., villa, land, commercial property).
    • Consider the purpose of your purchase: personal use, vacation home, or investment for rental income.
  2. Engage Professionals:
    • Hire a reputable real estate agent who specializes in Bali properties. They can guide you through the process, provide market insights, and help you find suitable properties.
    • Consult with a lawyer who is well-versed in Indonesian property law to ensure a legally sound transaction.
  3. Legal Framework:
    • As a foreigner, you have several options to acquire property in Bali through these legal requirements. The most common ways are through a leasehold agreement, a local nominee, or setting up a foreign-owned company (PMA).
    • Ensure that the property has the appropriate certificates and permits, including a Building Usage Certificate (IMB) and a Land Certificate (SHM or HGB), depending on the property type.
  4. Due Diligence:
    • Conduct thorough due diligence on the property you intend to purchase. This includes verifying the property’s legal status, ownership, boundaries, existing leases, and any potential restrictions or liabilities.
  5. Financing:
    • Determine how you plan to finance the property purchase. Options include cash payment, mortgages from local banks (available for certain property types and tenure), or exploring financing options in your home country.
  6. Purchase Agreement:
    • Work with your lawyer to draft or review the purchase agreement, ensuring it includes all necessary terms, conditions, and contingencies.
    • Consider engaging a notary to handle the legal aspects and registration of the transaction.
  7. Tax and Fees:
    • Understand the applicable taxes and fees associated with property acquisition, such as the 10% Value Added Tax (VAT), transfer taxes, notary fees, and agent commissions.
    • Consult with a tax advisor to ensure compliance with local tax regulations.
  8. Completion and Handover:
    • Arrange a final inspection of the property before completion to ensure it meets your expectations and specifications.
    • Coordinate with the seller, agent, and legal representatives to complete the transaction, make the payment, and transfer the property’s ownership.
  9. Post-Purchase:
    • Update the property ownership with the local authorities and ensure the property is properly managed, especially if you plan to rent it out.
    • Consider engaging a property management company or villa rental agency to handle maintenance, bookings, and guest services if necessary.

Remember that this guide provides a general overview, and it’s crucial to consult professionals who are well-versed in Bali’s property market and legal requirements for personalized advice throughout the process.