The conversation around how tourists can own or lease property in Bali is one that can feel rather complicated.
The principle of owning or leasing a property or land is different from one’s ability to live and work in the country.
Owning or leasing property does not automatically entitle foreigners to work and build businesses, and vice versa.
To clear up some of the confusion, the Bali Regional Office (Kanwil) of the Ministry of Law and Human Rights has laid it all out as clearly as day.
The Head of the Bali Regional Office of the Ministry of Law and Human Rights, Anggiat Napitupulu, told a reporter that foreigners on any kind of residence permit – e.g., any kind of visa – could buy, lease, and own property in Bali and across Indonesia.
Napitupulu said, “All types of residence permits are permitted. Including Visa on Arrival, yes.” Napitupulu explained that property ownership by foreigners in Bali and elsewhere in Indonesia is not solely dependent on the type of residence permit.
However, there are still heaps of restrictions and obstacles to jump through. Some restrictions include the the type and price of property that foreigners can invest in.
Since there are strict restrictions in place regarding the type and cost of property available to tourists, Napitupulu feels the fact that foreigners can complete most of these steps on a tourist visa on arrival is a good thing.
He told reporters, “I think this is okay. Because the foreigner still has to have a residence permit (visa) when making a transaction. And ownership of the transaction will not determine the type of immigration residence permit.”
According to the Decree of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Number 1241/SK-HK.02/IX/2022 concerning the Acquisition of Residential/Residential House Prices for Foreigners, the minimum price of housing that can be purchased by foreigners varies, depending on the region.
For Bali, the minimum price of a ‘landed house’ is IDR 5 billion (USD 314,000 for West Nusa Tenggara (including Lombok), is IDR 3 billion (USD 188,000), and for areas like Jakarta and most of Java, the cost is IDR 5 billion too; though in less popular regions of Indonesia, fees are reduced to a minimum of IDR 1 billion.
For flats and apartments these rates are reduced slightly. In Bali, the minimum price of a flat a foreigner can purchase is IDR 2 billion, and in Jakarta, it’s IDR 3 billion.
Whether a landed house or apartment/flat, foreigners are limited to a maximum property size of 2,000 square meters.
But, just because foreigners can technically buy property within these restrictions on a tourist visa on arrival doesn’t necessarily mean that it is the smartest or safest choice when it comes to making a sizeable investment.
It also doesn’t mean that someone on a tourist visa could arrive, hand over USD 350,000, and walk away with title deeds; there are still many processes to pass through.
In Indonesia, there are three different types of land titles.
These are Hak Milik which is the Right to Own, the next is Hak Pakai the Right to Use and Hak Guna Bangunan the Right to Built, however each of these come with another layer of legal structures to flow through.
Leasehold agreements are another popular way for foreigners to acquire property, often for 25 years or more.
Some people feel it is safer and more cost-effective to set up a foreign-owned company in Indonesia, a PT PMA.
Other factors to consider are how long you want to stay in Indonesia and how many days of the year you want to live in the property. This determines what visa should be applied for.
Whether the property will be used for commercial purposes opens up a whole other can of worms, including permits for the building to operate as business premises, business licenses, and then applications for the correct visa.
The nuances between business visas, investment visas, and work permits are another area in which foreigners are often caught out.
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J West
Thursday 11th of April 2024
Selling off your children's land to foreigners is very short term thinking and unwise.
Jayadeva
Tuesday 16th of April 2024
@Randy, Corrupt Chinese money from Jakarta is destroying Bali faster than any foreigners, they are killing the goose with golden egg by making investments in ugly, tasteless real estate and creating a real estate bubble. Also Bali is not a place where you are supposed to be "good at managing money". For that, go to Singapore or China if business restlessness is what you like
Shorty
Monday 15th of April 2024
@Randy,
You miss my point.
I didn't suggest they were poor and destitute. Many are asset rich - land - and cash poor.
With kids not interested and difficulty getting anyone to share farm, rent, lease or sell to continue farming they sell the land.
Shorty
Sunday 14th of April 2024
@Randy, I didn't say they were poor or destitute. In my area and I'm sure in others, many are asset rich almost exclusively land, and cash poor. I said that often they had an asset they could no longer work and earn income, had difficulty finding tennants and the next generation weren't interested.
Randy
Saturday 13th of April 2024
@Exp, you got some nerves to call others from Jakarta or Java for that matter that it is a real issue that they buy free hold properties or free hold land in Bali. They are Indonesian citizens and they have more rights than entitled foreigners who can only lease properties here. Both sides also know that taxes are lower here in Bali.
By the way, local builders/developers prefer to sell to wealthy Indonesians rather than to have to deal with leasing with fussy foreigners. Indonesians from all over Indonesia have the right to purchase in their own wide Republic as much as you would as an Aussie to buy in Sydney or Melbourne if you have that kind of money. There are Aussie real estate companies luring wealthy Indonesians to buy properties in Australia. They seemed to be able to attract Indonesian buyers if they keep having seasonal seminars in Jakarta, Wonder why that is…
Why would you think that there is a problem with other Indonesians moving in Bali or owning businesses locally…it creates jobs all over Bali in the hospitality industry. Some Balinese do NOT know how to handle money or a business. There is always the religious rituals that need to be met. They sell off their lands to prove to others that they have the means to make elaborate ceremonies. Think about that…obviously you know nothing of Balinese culture. What is most important to them, religion.
Why do you think that they would also hire people from elsewhere in the largest archipelago in Bali?? It is because the workers from other places are NOT Hindus. They do not take frequent leave of absence like Balinese would for family obligations at temples or ceremonies.
Randy
Saturday 13th of April 2024
@Shorty, why would you think that the farmers are poor if if they own land to grow rice or crops or even lease the land to entitled foreigners... Poor and destitute?? I don’t think so. Just because they live in a humble home walled up inside where small offerings altars or temples are built, you call that poor??
Randy
Thursday 11th of April 2024
Spain and Portugal will eliminate the so-called golden visas program granting residency rights to non EU nationals who make large investments in real estate in the country. There is a lack of supply and a spike in demand. It’s already impossible for the Spaniards and the Portuguese to find decent housing for those already live, work and pay taxes in their regional major cities. It’s a highly stressed market.
Chinese Investors top the list followed by Russians who invest more than 3.4 billion euros. Transparency International questioned whether authorities have investigated the origin of the funds. This can be said for foreign investors Including Russians doing business buying properties in Indonesia especially in Bali. Phuket, Thailand for example is already full of Russian investors. No one has ever asked where the funds may come from...
There are some complaints from locals that some foreigners building villas in Bali have defaulted on their promissory note to pay the contractors and workers. Some local notary offices are overwhelmed with local contractors demanding payment from the “entitled foreigners” on time. Heard from an Australian who complained that his Aussie bank could take 10 days or more to be transferred in the local Indonesian bank to pay his builders. Told him that in my own experience transferring money from the States to an Indonesian local bank may clear within 24 hours. Apparently Australian banks may be making a sum of interest for taking a long time in transferring money abroad. Sigh...
Bali is already choked up with foreigners buying (more like leasing) properties in Bali. Whether it may be on a valid visa or what have you, Indonesian authorities should rethink their strategy like the EU with their so-called golden visas to non EU nationals.
BaliDuck
Thursday 11th of April 2024
Just call it what it is. A giant clowntown.
Wayan Bo
Thursday 11th of April 2024
Taking tourists money for property’s before kicking them out of country 🤣
Steve b
Sunday 21st of April 2024
@Wayan Bo, yep how many have been done like a dogs dinner
Kazu
Wednesday 10th of April 2024
Is it any wonder bule don't know where they stand re. owning property?
Seems those that make the laws are just beginning to understand them... or not...
It's hard to not think some of this vagueness and ambiguity is not deliberate.
but sadly, I don't think it is...