Real estate cost in Bali is cheaper than the other paradise islands. Besides, the Indonesian government strives to promote foreign investments in Bali’s real estate market by streamlining the taxation system, terms and conditions regarding property transactions, and imposing foreign investor legislation. But if you are planning to purchase real estate in Bali, the most important thing you should know is that foreigners can’t own land here but take a Bali villa on lease for the long term. That may be why many investors are not interested in the Bali real estate market. They might not be aware that Bali is one of the most charismatic places on earth, located in Southeast Asia. Thankfully, now you know that fact.
One more thing that most investors are aware of is that location is king in real estate. Considering that, it is fair to conclude that Bali is an excellent place for real estate investment, but foreigners can’t own land here. So, how do we solve this investment puzzle? There are two options:
- A PT PMA company (100% foreign enterprise) can buy a freehold company by taking the Hak Milik certificate and changing it in HGB (Hak Guna Bangunan). The validity period of the HGB certificate is up to 30 years and can be extended for a period of 20 years and renewed for a maximum period of 30 years, for a total of 80 years. Building Use Rights holders (HGB) are required to apply for an extension at least two years before the HGB validity period ends.
- Leasehold ownership is another option in Bali that gives the buyer the right to occupy and use properties for a specific period (typically between 25-30 years). There is the possibility of extending for another 25 or 30 years. The extension is based only on the value of the land and not the building at the time of the extension. Foreigners who can’t invest directly in freehold villas can purchase a leasehold property in Bali. However, they have to return the property to the original native owner by the end of the lease period.
Reasons to Opt for Leasehold Properties in Bali
Freehold properties are more expensive than leasehold properties. Besides, the acquisition process of a villa in Bali on leasehold is less daunting as it doesn’t require the involvement of any Indonesian legal entity to accomplish the transaction. After purchasing the leasehold property in Bali, the owner can further sublease it to another person or use it as a commercial property for holiday rentals.
Prestige Property Bali, the leading Indonesian real estate agency, recommends clients invest in well-managed villas in posh areas like Seminyak, Uluwatu, Sanur, and Canggu. Demand for rentals in such popular holiday destinations is rising drastically. Therefore, a leasehold property in any of these locations can yield high returns.
Feel free to use our marketplace if you are looking for leasehold properties in Bali or beyond. We can also help you connect with local real estate experts who can ease your investment journey in Bali through their comprehensive knowledge and services, from searching for properties to their acquisition. Don’t hesitate to contact us for more information on buying leasehold property in Bali.