Freehold:

• Permanent Ownership: Freehold means you own the property and the land it stands on indefinitely.
• Full Control: You have complete control over the property, including the right to sell, transfer, or develop it as you wish.
• Heredity Rights: Freehold property can be passed down to heirs.
• Higher Cost: Freehold properties are typically more expensive due to the permanent ownership rights.
• Common for Locals: In many countries, including Indonesia, freehold ownership is usually available only to citizens.

Leasehold:

• Temporary Ownership: Leasehold means you have the right to use the property and land for a specified period (e.g., 30, 50, or 99 years).
• Limited Control: Your rights are limited to the terms of the lease agreement; major changes to the property often require the landlord’s consent.
• No Heredity Rights: The property rights revert to the landowner when the lease expires, and it cannot be passed down permanently.
• Lower Cost: Leasehold properties are usually less expensive than freehold due to the temporary nature of ownership.
• Common for Foreigners: In countries like Indonesia, foreigners can typically only purchase property through a leasehold arrangement.

Foreigners cannot directly buy land in Bali due to Indonesian law prohibiting foreign ownership of freehold land. However, there are several legal methods through which foreigners can effectively control and invest in land and property in Bali:

1. Leasehold (Hak Sewa)

• Lease Agreement: Foreigners can enter into a long-term lease agreement for up to 80 years (often structured as 30 years with options to extend).
• Property Use: While the land remains under the ownership of an Indonesian citizen or entity, the foreigner has the right to use and develop the property during the lease term.

2. Right to Use (Hak Pakai)

• Government Approval: Foreigners can obtain a “Hak Pakai” title, which grants the right to use the land for a specific purpose, such as residential or commercial, usually for 30 years, with extensions available.
• Limited Ownership: The “Hak Pakai” title provides more security than a simple leasehold but does not confer full ownership.

3. Indonesian Nominee Arrangement

• Nominee Agreement: A foreigner can work with an Indonesian citizen who holds the title to the land on their behalf. This is a common but legally complex arrangement.
• Risk Factor: This method carries risks since the nominee legally owns the land, and careful legal structuring is required to protect the foreigner’s interests.

4. Indonesian Legal Entity (PMA Company)

• Setting Up a PMA: Foreigners can establish a Penanaman Modal Asing (PMA) company, a foreign-owned company registered in Indonesia.
• Company Ownership: The PMA can legally acquire land with a “Hak Guna Bangunan” (right to build) title for a specified period, typically 30 years, with possible extensions.

These methods allow foreigners to control and benefit from land and property in Bali while complying with local laws. However, each approach comes with its own legal and financial considerations, so seeking professional legal guidance is advisable.

In Indonesia, a Leasehold contract for property can typically be structured for the following durations:

• Initial Lease Term: Up to 30 years is common.
• Extension Options: The contract can often include options to extend the lease for additional periods, commonly 20 years, and then another 30 years, bringing the total possible duration up to 80 years.
• Total Possible Duration: In some cases, the total leasehold period can be up to 99 years, depending on negotiations and legal agreements.

These terms can vary based on the specific agreement between the lessor and lessee and local regulations.

The amount of land needed for a villa in Bali depends on several factors, including the desired size of the villa, the number of bedrooms, the inclusion of amenities like a pool or garden, and the location. Here’s a general guide:

1. Small Villa (1-2 Bedrooms)

• Land Area: 1 to 3 ares (100 to 300 square meters)
• Details: Suitable for a compact villa with a small garden or pool. Commonly seen in more densely populated areas like Seminyak or Canggu.

2. Medium-Sized Villa (3-4 Bedrooms)

• Land Area: 4 to 7 ares (400 to 700 square meters)
• Details: Ideal for a mid-sized villa with more spacious rooms, a garden, and a larger pool. This size is adeqate for family villas or small groups.

3. Large Villa (5+ Bedrooms)

• Land Area: 8 to 15 ares (800 to 1,500 square meters)
• Details: Accommodates a luxury villa with extensive living spaces, a large pool, multiple outdoor areas, and possibly additional features like a guesthouse or staff quarters.

4. Luxury Estate Villa

• Land Area: 15 ares and above (1,500 square meters and more)
• Details: Designed for high-end properties with extensive amenities, large gardens, multiple buildings, and complete privacy. These are typically located in more secluded areas like Uluwatu or Tabanan.

Considerations:

• Location: Due to higher land prices, urban areas like Seminyak or Canggu may require smaller plots, while more rural areas like Tabanan or Ubud can accommodate larger plots.
• Amenities: Including a large garden, swimming pool, parking, and additional guest rooms will increase the required land size.
• Regulations: Local zoning laws and building codes may affect the minimum and maximum land size for villa construction.

For a comfortable, well-designed villa that meets most expectations, 4 to 7 ares (400 to 700 square meters) is a commonly recommended land size.

The locations in Bali that generally offer the highest returns on investment, particularly for vacation rental properties, include:

1. Seminyak

• Luxury Market: Known for upscale boutiques, restaurants, and nightlife.
• High Rental Demand: Popular among affluent tourists and offers premium rental rates.
• Proximity to the Beach: Close to the beach, making it attractive to visitors.

2. Canggu

• Rapidly Growing Area: Increasingly popular with digital nomads, surfers, and young travelers.
• Trendy and Vibrant: Known for hip cafes, beach clubs, and a laid-back lifestyle.
• Diverse Market: Offers a mix of luxury villas and more affordable options, catering to various types of travelers.

3. Ubud

• Cultural Hub: Famous for its art, yoga retreats, and natural beauty.
• Year-Round Demand: Attracts a steady stream of tourists interested in wellness and culture.
• Strong Occupancy Rates: Popular among long-stay travelers seeking a serene environment.

4. Jimbaran

• Family-Friendly: Known for its calm beaches and luxury resorts.
• Growing Infrastructure: Increasing development, including high-end resorts and villas.
• Proximity to Airport: Convenient location near Ngurah Rai International Airport.

5. Uluwatu

• Cliffside Properties: Famous for stunning ocean views and luxury cliffside villas.
• Surfing Destination: Attracts surfers and those looking for a more exclusive experience.
• High-End Market: Growing popularity among luxury travelers, leading to high rental rates.

6. Nusa Dua

• Luxury and Security: Home to many 5-star resorts and gated communities.
• MICE Market: Attracts business travelers due to its convention centers and high-end hotels.
• Stable Returns: Offers consistent returns due to its established reputation as a high-end destination.

7. Sanur

• Quiet and Family-Oriented: Known for its relaxed atmosphere and appeal to older travelers and families.
• Steady Demand: Less volatile than other areas, with a consistent flow of tourists.
• Emerging Luxury Market: Increasing luxury developments catering to a more affluent crowd.

8. Tabanan

• Emerging Area: This less developed area offers the potential for high returns due to growing interest in more tranquil, scenic locations.
• Natural Beauty: Known for rice paddies, mountains, and less crowded beaches.
• Investment Potential: As other areas become saturated, Tabanan offers opportunities for early investment in emerging markets.

9. Lovina

• Undiscovered Gem: Located on the quieter northern coast of Bali, offering a more serene and less commercialized environment.
• Growing Popularity: Increasing interest from tourists seeking a more authentic and peaceful Balinese experience away from the crowded south.
• Dolphin Watching: Known for its calm beaches and famous dolphin-watching tours, which attract a steady flow of tourists.
• Lower Entry Costs: Property prices are generally lower compared to the southern regions, offering potentially higher returns as the area develops.
• Emerging Infrastructure: Gradual improvements in infrastructure and accessibility are making Lovina an attractive option for long-term investments.

These locations are known for their strong rental yields, steady demand, and potential for capital appreciation, making them attractive for investors seeking high returns in Bali.

Lovina is becoming increasingly popular for those looking to invest in a quieter, more relaxed part of Bali with solid potential for future growth.

The cost of land in Bali varies significantly depending on the location, proximity to popular areas, and development potential. Here’s a general overview of land prices in various parts of Bali as of recent trends:

1. Seminyak

• Price Range: IDR 800 million to IDR 2 billion per are (100 square meters)
• Details: Seminyak is a prime area with high demand due to its popularity with tourists and expats, driving up land prices.

2. Canggu

• Price Range: IDR 600 million to IDR 1.5 billion per are
• Details: Rapidly developing with increasing popularity, especially among digital nomads and surfers, leading to rising land prices.

3. Ubud

• Price Range: IDR 300 million to IDR 800 million per are
• Details: Known for its cultural appeal and serene environment, Ubud offers more affordable land than coastal areas.

4. Jimbaran

• Price Range: IDR 500 million to IDR 1.2 billion per are
• Details: Jimbaran has a mix of luxury and mid-range properties close to the airport and popular with families.

5. Uluwatu

• Price Range: IDR 700 million to IDR 1.5 billion per are
• Details: Famous for its cliffside views and luxury developments, Uluwatu commands higher prices, particularly for ocean-view plots.

6. Nusa Dua

• Price Range: IDR 500 million to IDR 1.5 billion per are
• Details: Nusa Dua is a high-end area with many 5-star resorts, and its land prices reflect its exclusivity and proximity to luxury amenities.

7. Sanur

• Price Range: IDR 400 million to IDR 1 billion per are
• Details: Sanur is known for its quiet, family-friendly atmosphere, offering a mix of affordable and mid-range land options.

8. Tabanan

• Price Range: IDR 100 million to IDR 400 million per are
• Details: A more rural and less developed area, Tabanan offers lower land prices with potential for future growth as development spreads.

9. Lovina

• Price Range: IDR 100 million to IDR 300 million per are
• Details: Located in North Bali, Lovina is more affordable and appealing to those looking for quieter, undeveloped areas with long-term investment potential.

10. Denpasar

• Price Range: IDR 400 million to IDR 1 billion per are
• Details: As Bali’s capital, Denpasar offers a mix of residential and commercial land at varied prices depending on proximity to business districts.

These prices can fluctuate based on market demand, economic conditions, and specific property features such as views, access to amenities, and future development plans. Before investing, consider conducting a detailed market analysis and consulting with local real estate experts.

The timeline for buying land in Bali can vary depending on several factors, including the complexity of the transaction, due diligence requirements, and the efficiency of involved parties. Here’s a general overview of the steps and associated timelines:

1. Property Search and Selection

• Duration: 1 to 4 weeks
• Details: This involves identifying suitable land based on your requirements, budget, and location preferences. Working with a local agent can expedite this process.

2. Negotiation and Offer

• Duration: 1 to 2 weeks
• Details: Once a property is identified, the price and terms are negotiated. This includes submitting an offer and possibly making counteroffers until an agreement is reached.

3. Legal Due Diligence

• Duration: 2 to 4 weeks
• Details: This crucial step involves verifying the land title, checking for encumbrances, reviewing zoning regulations, and ensuring no legal disputes. Engaging a notary or legal advisor is essential for this process.

4. Drafting and Signing of Sale and Purchase Agreement (SPA)

• Duration: 1 to 2 weeks
• Details: Both parties prepare, review, and sign the SPA. This document outlines the terms of the sale, payment structure, and responsibilities of both buyer and seller.

5. Payment of Deposit

• Duration: 1 week
• Details: Upon signing the SPA, a deposit (usually 10-30% of the purchase price) is paid to secure the property. The deposit is often held in escrow until the sale is completed.

6. Title Transfer Preparation

• Duration: 2 to 4 weeks
• Details: The seller and buyer work with the notary to prepare the documents required for the title transfer. This includes ensuring all legal conditions are met, such as paying outstanding taxes or obtaining necessary permits.

7. Final Payment and Title Transfer

• Duration: 1 to 2 weeks
• Details: The final payment is made, and the land title is officially transferred to the buyer. This step involves registering the new ownership with the National Land Agency (BPN).

8. Registration with the National Land Agency (BPN)

• Duration: 2 to 6 weeks
• Details: The BPN processes the registration of the new land ownership. Once completed, the buyer receives the updated land certificate.

9. Final Handover

• Duration: 1 week
• Details: The formal handover of the land occurs, where the buyer takes full possession of the property.

Total Estimated Timeline

• Duration: 10 to 24 weeks (2.5 to 6 months)

This timeline can vary depending on the efficiency of the legal processes, the complexity of the transaction, and any unforeseen issues. Working with experienced local professionals, such as a notary, real estate agent, and legal advisor, is important to ensure a smooth and timely transaction.

1. Freehold (Hak Milik)

• Definition: Permanent and absolute land ownership, typically available only to Indonesian citizens.

2. Leasehold (Hak Sewa)

• Definition: A temporary right to use land or property for a specified period, often up to 99 years, common for foreign investors.

3. Right to Use (Hak Pakai)

• Definition: A legal title allowing foreigners to use land or property for a specific purpose, such as residential, usually for 25-30 years with extensions.

4. Right to Build (Hak Guna Bangunan or HGB)

• Definition: A legal title that allows a company, including a foreign-owned company (PMA), to build on and use the land for a specified period, typically 30 years, with extensions.

5. Penanaman Modal Asing (PMA)

• Definition: A foreign investment company registered in Indonesia that can own property with a right-to-build (HGB) title.

6. Notary (Notaris)

• Definition: A legal professional in Indonesia responsible for drafting and authenticating legal documents, including sale and purchase agreements.

7. Zoning (Tata Ruang)

• Definition: Regulations that dictate the permitted use of land, such as residential, commercial, or agricultural, must be adhered to when developing property.

8. Sale and Purchase Agreement (SPA)

• Definition: A legally binding contract that outlines the terms and conditions of the sale and purchase of a property.

9. Due Diligence

• Definition: The process of thoroughly investigating a property’s legal, financial, and physical aspects before finalizing a purchase.

10. Land Certificate (Sertifikat Tanah)

• Definition: The official document that proves ownership of land in Indonesia.

11. IMB (Izin Mendirikan Bangunan)

• Definition: A building permit is required to construct or renovate a property in Indonesia to ensure compliance with local regulations.

12. Encumbrance

• Definition: Any claim, lien, or liability attached to a property, such as a mortgage, that may affect its transferability.

13. Off-Plan Property

• Definition: A property sold before construction is completed, often at a lower price, with the promise of future delivery.

14. ROI (Return on Investment)

• Definition: A measure used to evaluate the profitability of an investment, calculated as a percentage of the investment’s cost.

15. Occupancy Rate

• Definition: The percentage of time a rental property is occupied during a given period, used to assess the property’s performance.

16. Capital Appreciation

• Definition: The increase in the value of a property over time, providing potential profit when the property is sold.

17. Management Fee

• Definition: A fee charged by a property management company for overseeing a rental property’s day-to-day operations and maintenance.

18. Property Tax (Pajak Bumi dan Bangunan or PBB)

• Definition: An annual tax levied on property ownership in Indonesia based on the value of the land and buildings.

19. Vendor

• Definition: The seller of a property.

20. Land and Building Acquisition Tax (BPHTB)

• Definition: A tax the buyer pays upon acquiring land and buildings in Indonesia, typically around 5% of the property’s sale value.

1. Are (a)

• Definition: A unit of land measurement commonly used in Bali, equivalent to 100 square meters.
• Example: A plot of land measuring five ares would be 500 square meters.

2. Hectare (ha)

• Definition: A larger unit of land measurement, equivalent to 10,000 square meters or 100 ares.
• Example: A property spanning 2 hectares would cover 20,000 square meters.

3. Square Meter (m²)

• Definition: The standard unit of measurement for land and building area, equivalent to the area of a square with sides of one meter.
• Example: A villa with a floor area of 250 m².

4. Meter (m)

• Definition: A unit of length measurement commonly used to describe dimensions of land and buildings.
• Example: A property with a frontage of 20 meters.

5. Frontage

• Definition: The length of a property along the street or main access point, often measured in meters.
• Example: A plot with a 30-meter frontage.

6. Floor Area Ratio (FAR)

• Definition: The ratio of a building’s total floor area to the size of the land on which it is built, used to regulate building density.
• Example: A FAR of 1.5 on a 1,000 m² plot would allow a total building area of 1,500 m².

7. Plot Ratio

• Definition: Similar to FAR, it refers to the ratio of the total built-up area to the plot size, determining the extent of construction allowed.
• Example: A plot ratio of 2.0 allows building coverage of twice the land area.

8. Setback

• Definition: The required distance between the property boundary and the building, often regulated by local zoning laws.
• Example: A setback requirement of 5 meters from the road.

9. Gross Floor Area (GFA)

• Definition: The total area of all floors within the exterior walls of a building, including common areas, measured in square meters.
• Example: A villa with a GFA of 450 m².

10. Net Floor Area (NFA)

• Definition: The usable floor area within a building, excluding walls, staircases, and other non-usable spaces, measured in square meters.
• Example: An office space with an NFA of 300 m².

These terms and measurements are essential for understanding property dimensions, land size, and building regulations in Bali and Indonesia.

1. Indonesian Rupiah (IDR)

• Definition: The official currency of Indonesia, often abbreviated as IDR. All local transactions, including real estate, are conducted in Rupiah.
• Example: A property might be priced at IDR 3,500,000,000.

2. Conversion Rate

• Definition: The exchange rate used to convert foreign currencies into Indonesian Rupiah (IDR) and vice versa.
• Example: If 1 USD = 15,000 IDR, a property costing IDR 3,000,000,000 would be equivalent to 200,000 USD.

3. Down Payment (DP)

• Definition: An initial payment made when purchasing property, usually a percentage of the total price, paid in Rupiah.
• Example: A 20% down payment on a property priced at IDR 5,000,000,000 would be IDR 1,000,000,000.

4. Installment (Cicilan)

• Definition: A scheduled payment plan that allows the buyer to pay for the property in installments over a period, often in Rupiah.
• Example: Monthly installments of IDR 100,000,000 for 24 months.

5. Full Payment (Pembayaran Penuh)

• Definition: The complete payment for a property, typically made in Rupiah, either upfront or after the initial down payment.
• Example: Completing the purchase with a total payment of IDR 4,000,000,000 after the down payment.

6. Tax Withholding (PPh)

• Definition: When purchasing a property, the buyer must withhold income tax (Pajak Penghasilan) and pay it to the government, calculated as a percentage of the sale price in Rupiah.
• Example: A 5% tax withholding on a property sale price of IDR 2,000,000,000 would be IDR 100,000,000.

7. Transaction Fee (Biaya Transaksi)

• Definition: Additional costs associated with the transaction, such as notary fees, legal fees, and administrative fees, usually paid in Rupiah.
• Example: Transaction fees amounting to IDR 50,000,000.

8. Property Valuation (Penilaian Properti)

• Definition: The process of determining the market value of a property in Rupiah, often required for financing or sales purposes.
• Example: A property valuation estimates the market value at IDR 3,200,000,000.

9. Bank Guarantee (Garansi Bank)

• Definition: A financial instrument a bank provides to guarantee the buyer’s payment obligations, often used in large transactions in Rupiah.
• Example: A bank guarantee for IDR 1,000,000,000 to secure the purchase.

10. Foreign Exchange (Forex)

• Definition: The process of exchanging one currency for another, such as converting USD or EUR to IDR for property transactions.
• Example: Converting 100,000 USD into IDR for a property purchase based on the current exchange rate.

These currency-related terms are crucial for understanding the financial aspects of real estate transactions in Bali and Indonesia.