Table Of Contents
A Quick Indonesian Law-101
Options for Buying / Investing in Property
KITAS / KITAP
PT PMA
Bonus Tips
Building A Villa For Your Airbnb in Bali
More About The Pondok Wisata License
Documents Needed To Apply
Steps To Leasing A Property
Summary
BUYING PROPERTY IN BALI AS A FOREIGNER?
HERE’S WHAT YOU NEED TO KNOW
With its dreamy beaches, friendly people, and booming property investment market, it’s no wonder people are looking to invest in Bali.
You’ll often hear that the only way foreigners can invest in property in Bali, is by using a local nominee on their behalf…
Spoiler alert, it’s not.
That’s actually a pretty risky choice of buying property. You’ll be put in a position where you hold no legal rights or protection over the property; We’re talking none, zero, nada.
A Quick Indonesian Law-101
There are 3 official “rights” that you need to know before going ahead;
- Hak Milik = the Right to Own
- Hak Guna Bangunan = the Right to Build
- Hak Pakai – the Right to Use
Using a local nominee means you’re buying under that person’s name to indirectly “get” the Hak Milik.
To put it simply, a non-Indonesian citizen cannot own land in Indonesia but can acquire a leasehold title to a building.
Keep on reading to find out how!
Options for Buying / Investing in Property
KITAS / KITAP Holder
In case you didn’t already know, a KITAS is a temporary residence permit visa whilst a KITAP is a permanent residence permit visa.
Obtaining one of these permits will give you several benefits and one of them is legally “owning” a property. Keep in mind that KITAS/KITAP holders can only acquire the Hak Pakai / the Right to Use, along with other limitations.
We’ll give you a short table a little later on, to help you understand the specifications and make your life a bit easier (you’re welcome).
PT PMA
A safe way for you to buy property in Bali is through the creation of a PT PMA or what you would normally call a foreign limited liability company. This will allow you to acquire both the Hak Guna Bangunan (Right To Build) and the Hak Pakai (Right To Use).
| PT PMA (Foreign-Owned Company) | KITAS/KITAP holders |
|---|---|
| Right To Build & Right To Use | Right To Use |
| The subject of the rights holder is a person who is domiciled in Indonesia (KITAS/KITAP) | The subject of the right holder is a person who is domiciled in Indonesia (KITAS/KITAP) |
| Used for office buildings, warehouses, which have economic value and are indeed needed by PT PMA in carrying out its business activities Example: restaurants, beach clubs, agencies, etc (must be a business permitted by the government for foreigners to own it) | Used for a residence |
| Does not have to be on leased land | Must be on leased land |
| Can be an asset of PT PMA | Can be inherited |
| Can use, construct, own the buildings on the land, perform legal actions (releasing, transferring, and changing) | Right to use the land for a certain period, right to rent for buildings, right of ownership to apartment units, and residential houses |
| The maximum period of 30 years (can be extended for a maximum period of 20 years) | Right to use on state land: a maximum of 30 years extended for a maximum period of 20 years and renewed for a maximum period of 30 years Rights to use on overland with management rights: a maximum of 30 years extended for a maximum period of 20 years and renewed for a maximum period of 30 years Right to use on owned land: max. 30 years and can be renewed with the deed of granting the right of use on the land with the right of ownership |
| Unlimited plot | 1 plot of land per person/per family |
| Max. 2000 m2 (square meter) |
| - | Rules for the purchase price of the property in Bali: Single house: min. 5 billion Apartment units: min. 2 billion |
Bonus Tips
- If you want to extend the property lease after 80 years, it’s doable.
- You can hold a right-to-use (Hak Pakai) certificate only if the land already has a building on it and there are rules on using the property with a right-to-use certificate as a business.
- Due to the minimum value of the property rules, you can’t build nor get a property in Bali that is in an agricultural zone (greenbelt), this green zone serves to preserve agricultural land.
- You can only lease a property in tourist, residential, or commercial areas.
- It’s important to double-check whether the zoning allows you to do certain kinds of activities. Don’t worry we can help you with that here at Legal Legends
Building a Villa for You Airbnb in Bali?
More about the Pondok Wisata License
Are you planning to start your own Airbnb business in Bali?
Airbnb’s in Bali are becoming increasingly popular here, and it’s a possible business venture.
Know that you’ll need a special license called a “Pondok Wisata”.
On top of that, you’ll also need to set up a PT PMA because it is a form of business activity (FYI all money-making activities in Bali, Indonesia owned by foreigners legally require a PT PMA).
Essentially, this license allows you to rent out a small house or homestay in Bali. It covers up to three bedrooms or up to five bedrooms.
Anything larger than that will require a full hotel license.
A Pondok Wisata license can only be under the name of an Indonesian citizen but you can manage the villa on behalf of your PT PMA with scope for business villa management (KBLI-551)
This license will be issued for a duration of 5 years and can be extended.
Taxes must also be paid on the property, but depending on the requirements of the local tax authority, this can be done monthly or annually. Even if the property does not generate income, you must still file the necessary tax documents.
You can expect a wait of 6-8 months before acquiring it.
Documents Needed To Apply
- Apply NPWPD Number (Tax Number)
- Apply document of ITR (zoning)
- Apply document of UKL – UPL: (Environmental Management and
- Environmental Monitoring Effort / Management System and Monitoring for Environment)
- Apply document IMB (Change of the Function) – must be for “Pondok Wisata”
- Apply document of NIB “Pondok Wisata”
- Apply document of Tanda Daftar Perusahaan (Business License)
Steps To Leasing a Property
- Submit completed forms to the owner of the land:
- Certificate of the land (copy)
- SPPT – Tax (copy)
- ITR zoning (copy)
- KTP (copy)
- KK (copy)
- Get the right to build with the correct building permit (IMB)
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Great read! Very informative 🙂
Super helpful article!