Dreaming of owning a villa in Bali? Here’s what international buyers must know before taking the leap! As we all know, Bali’s endless tropical charm, booming tourism sites, and laid-back lifestyle are always attractive for property investors and expats across the world. However, buying property in Indonesia, especially as a foreign buyer, requires a careful understanding of local regulations. That’s why it’s crucial to be aware of these key legal aspects before purchasing a villa in Bali.

Can International Buyers Legally Own Villas in Bali?

Indonesia’s Agrarian Law prohibits foreigners from directly owning freehold land (Hak Milik). In simple terms, this means that international buyers cannot legally own a villa on freehold land under their name. But don’t worry, there are still legal frameworks and alternative ownership options that allow foreigners to benefit from villa ownership in Bali.

Legal Ownership Options for Foreigners in Bali

While direct ownership is restricted, several legal structures enable international buyers to control, use, and benefit from property in Bali. Here are the most common and viable options:

1. Right to Use (Hak Pakai)

Right to use (Hak Pakai) is the first option which refers to a government-issued right that permits international buyers to legally use and occupy land for residential purposes. Initially granted for 25 years, this right can be extended, potentially allowing up to 80 years of usage. This option is ideal for long term living or vacation homes. 

Requirements: 

• Property must be used for residential purposes.
• Land must be zoned for residential use. 

2. Leasehold (Hak Sewa)

Leasehold (Hak Sewa) enables international buyers to rent property for a set durations, usually between 25 - 30 years with the possibility of renewal. This setup does not require Indonesian residency or a business entity, making it a flexible and lower-risk option for those seeking a holiday home or long-term investment.

3. Foreign Owned Company (Perseroan Terbatas Penanaman Modal Asing)

Foreign Owned Company (Perseroan Terbatas Penanaman Modal Asing) is a legal business entity in Indonesia that allows foreign ownership. This legal route grants foreign investors the ability to hold property using a Right to Build (Hak Guna Bangun) certificate issued by the government. This will be the best option for all international buyers or investors who plan to run a rental business, develop properties, or operate commercial real estate in Bali.

Key Legal Considerations Before Buying a Villa

To avoid legal complications and ensure a smooth ownership process, international buyers should pay close attention to these important factors:

1. Zoning Regulations

Make sure the land is appropriately zoned (residential, tourism, or commercial) for your intended use. Non-compliance with zoning laws may result in fines or, in severe cases, the forced removal of structures.

2. Due Diligence and Notary Support

Make sure to always work along with a reputable notary or Pejabat Pembuat Akta Tanah (PPAT) and conduct thorough due diligence. This process includes checking the land certificates, confirming the seller’s rights, and ensuring the land is not under any disputes.

3. Tax Obligations

Please be more aware of property taxes, income tax on rental earnings, and capital gains tax if you resell. It is best to work with a credible and professional advisor in order to get the proper solutions and to stay compliant.

Common Pitfalls to Avoid

Here are a few mistakes that international buyers should steer clear of:

1. Nominee Arrangements: Where property is purchased under a local citizen’s name are considered unlawful and pose significant legal dangers. 
2. Unclear Lease Agreements: Always ensure the lease contract clearly outlines extension terms, rights, and responsibilities. 
3. Purchasing in the Wrong Zone: Confirm zoning classification with local authorities before finalizing any deal.

How KosKaki Can Help You Navigate Bali’s Real Estate

To make your villa ownership convenient and trusted, working with a prominent professional is a must. Therefore, KosKaki is always ready to provide you with credible advisors in Bali’s real estate market, including the villa ownership. We are more than just a property agent, because we give the best services and solutions for your needs. KosKaki offers:

1. Expert legal consultation tailored for international buyers
2. Transparent and secure purchase processes
3. Partnerships with licensed notaries and legal experts
4. Customized ownership solutions (Hak Pakai, Leasehold, PT PMA)
5. Ongoing property management and investment support

Whether you are looking for holiday retreat or long term investment, KosKaki ensures and supports your journey to be legal and stress-free. So, just trust all your needs for villa ownership to KosKaki!

In Conclusion

Owning a villa in Bali is possible for international buyers, but it must be done in a legal and careful procedure. With the right structures, due diligence, and guidance from experienced professionals like KosKaki, international buyers are guaranteed to turn their dream to own a villa in Bali into reality without any legal complications. So, are you ready to make your own villa ownership come true? Contact KosKaki now for credible and trusted consultation and discover the smartest, fastest, and safest way to own properties in paradise!