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What you should know before starting to buy or invest property in Bali

Before deciding to make an investment plan or buy property in Bali, there are several important things that foreigners need to know:

1. Ownership Status

Freehold: Only Indonesian citizens (WNI) can own property with Freehold status. Foreigners are not allowed to own land or property with this status.

Building Use Rights (HGB): Foreigners can get the right to build and use land for a certain period, usually 30 years, with an extension option.

Use Rights: Foreigners can buy property with Use Rights, which gives the right to use land or buildings for 25 years, with the possibility of extension up to 80 years.

2. Government Regulations

The Indonesian government has strict regulations regarding property ownership by foreigners. It is important to understand the latest regulations, as there are certain limitations on the number of properties that can be owned and the location where the property is located.

3. Tax Obligations

Property owners in Indonesia must pay Land and Building Tax (PBB) every year. In addition, there is also income tax imposed on the sale of property.

4. Legal Procedures and Notaries

Every property transaction in Bali must go through a registered notary, who is responsible for ensuring that all legal documents are in accordance with Indonesian law.

5. Location and Investment Potential

Location is a key factor in property investment in Bali. Areas close to tourist attractions such as Ubud, Seminyak, and Canggu tend to have higher investment values. Research into the growth potential of the area is also important.

6. Cooperation with Locals

In some cases, foreigners choose to invest in property by cooperating with locals through certain agreements, but this must be done very carefully to avoid legal risks.

7. Currency Fluctuations

Currency exchange rates can affect your investment. Pay attention to fluctuations in the rupiah against your currency, as this can affect your purchase price and profits.

8. Environmental Regulations

There are various environmental regulations that must be adhered to, especially in protected areas or in coastal areas. These include restrictions on development to protect the natural environment.

9. Security and Political Stability

While Bali is relatively safe, it is important to consider the overall political and legal stability in Indonesia, as this can affect the value and security of your investment.

10. Return on Investment (ROI) Opportunity

Bali is known for its strong rental property market, especially for villas and houses rented to tourists. However, it is important to conduct market analysis and financial planning to ensure a realistic potential return on investment.

Understanding and taking note of the above can help foreigners make wiser decisions and reduce the risks in property investment in Bali.