You’re one week into your Bali getaway, live in a luxury villa and pay half the rent you should do in Sydney/New York/London, surf every single day, drink coconuts, eat delicious food, crazy party, drive scooter all over the island, and the last thing will be you’ve got to be thinking that “Damn, I don’t want to leave, I should live here”. Bali impresses like no other place.
Whether you’re thinking of taking up permanent residency, build a house in Bali, starting a business or looking to put some investment into this tropical paradise so you could come back anytime, we’ve got a few pro tips for you.
Know your location and surround
Spend some time in the area you intend to purchase in either for your residential or as an investment in Bali. If you are looking for safe returns, target Canggu property or Residential in Berawa; the investment growth in the area has gone rapidly surprising since 2016. The property price in Canggu and Berawa area has increase significantly up to 200% each year up to now and will keep going up for the next 20 years.
If you’re a more relaxed person that loves a chill-out area and surrounded by rice field, have a look into an option to build a house in Pererenan area. It’s only 10 minutes driving to the vibrant heart of Canggu’s famous beaches and trendy areas, yet the most exclusive residential areas for high net worth Indonesians and expatriates in Bali.
If you’re after an investment in Bali with attractive returns, try to get property in a boutique hotel managed by reputable hospitality management. Location? Uluwatu is the perfect answer. Based on the market area growth from the past 5 years, there are 2 locations with high potential to grow: Canggu/Berawa and Uluwatu. If you’re looking for such a property investment in Uluwatu, this is just a perfect time.
Check the legal side
Once you have found your dream property, take your time thorough Due Diligence. Whether your property is for Business or Residential purposes; it’s important to ensure that you know exactly what you are investing in and its legal status.
These are the most essential key documents you should check before purchase property in Bali:
- Land Certificate
Make sure it is registered under the same name with what mentioned in Landlord ID Card. If it’s not, and the person that you spoke with said it’s his/her parent’s land that has been inheritable to him/her, ask their Family Card (Kartu Keluarga). The family card should show the parents and his/her name in it.
- Land Zoning
When you fall in love with a piece of land, one thing you should check before you do anything on that land: Zoning. Be aware of the land is located in the green zone because means you couldn’t build anything on that land. The document is called Izin Tata Ruang (ITR) or spatial permit.
- Building Permit (IMB)
IMB is important, very important.
Make no mistake, after the land certificate, the IMB is probably the most important document regarding properties in Indonesia. The building permit is not only a permit to carry out the initial building but it also continues through the building’s life as a registration document. The permit defines (through a pile of associated documents that are lodged with the application) the specification of the building that is or has been built and the purpose the building can be used for.
- Land Tax
Make sure the landlord has paid their land annual taxes. Because in some cases they didn’t pay the taxes for a very long time, get fine every year, and it might cost you another thousand bucks to pay those taxes. Because if you don’t you will not be able to build anything.
Lock the deal Safe and Sound
After the Due Diligence is clear; use a legal consultant or Notary to ensure that your agreements are sound. Some Notary also offers a consultancy in terms of checking land documents as we mentioned above. When it’s done, lock the deal through Notary so your investment is secure. You can ask the Notary for an English Translation of your agreements – if this is not provided for you, ensure that you request it so that you understand your rights and obligations.
Noted there will be a lease or purchase tax which is 10% of the value that needs to be paid for a property transaction and 2% notary fee. Make sure you clear this with the Landlord who will pay the tax and notary fee. Most practices are the landlord should pay the tax (because it’s obviously their income), and you will pay the notary fee. But again it will depend on the agreement in place.
There will always be a demand for property in Bali. For investors, Bali’s strong tourism position means good turnover rates for sub-leased properties and high demand for properties for sale. The key is getting into the market before it’s too late.
We hope you have found these tips to settle in Bali helpful. Please feel free to click the share button below!