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Buying a House in Bali, Indonesia: The Ultimate Insider’s Guide

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Have you dreamt of buying a house in Bali, Indonesia? It’s no surprise! This stunning island is a paradise on earth, with its gorgeous scenery and vibrant culture. However, if you’re unfamiliar with Indonesian property laws, the buying process can seem overwhelming. 

Before diving into Bali’s real estate market, let’s take a moment to understand the ins and outs of Indonesian property laws, especially those that apply to foreign buyers. We’ll explore different types of property titles, like Hak Pakai, Hak Milik, and Hak Guna Bangunan, and explain what they mean for you. 

If you’re feeling a bit intimidated by these terms, don’t worry! We’ll break it down in simple terms, so you can be confident and informed throughout the process. 

Keep in mind that it’s always a good idea to seek guidance from reputable real estate agents and legal professionals familiar with local laws before making a purchase. 

Now that we’ve got that out of the way, let’s start!

Why Buy a House in Bali

Bali offers a unique opportunity for foreign buyers to invest in a dynamic real estate market, own a second home or even relocate to this stunning tropical paradise. 

The island’s flourishing real estate market offers an extensive selection of luxurious Bali villas, prime locations, and picturesque surroundings.

Typically, Bali properties are priced competitively, yet they often offer a higher quality of living compared to similar square meter properties in Western countries. 

In recent years, Bali’s property market has seen impressive growth, with luxury property prices increasing by 15% annually, making it an attractive investment for foreign nationals.

Another advantage of owning a house in Bali as a second home is the potential for rental income. The island is a popular tourist destination, and you can benefit from the demand for vacation rentals. Plus, with the assistance of local property developers, many foreign investors navigate local laws and regulations to secure long-term leasehold properties with leases up to 80 years.

When buying property in Bali, it is crucial to conduct thorough due diligence and consider aspects such as land title, local governments’ permits, and the overall market price. Working with reputable real estate agents and seeking legal advice is a safe way to ensure your investment is protected.

One more reason to buy a house in Bali? It has consistently been ranked as one of the world’s best destinations for both living and vacationing. This explains why a lot of people make Bali their home base, which offers a blend of luxury real estate, a vibrant local culture, and a captivating natural environment.

Legal Aspects of Buying a House in Bali

Let’s take a moment to talk about the legal side of venturing into Bali’s real estate market. It may not be the most exciting part, but trust us, it’s essential!

Ownership Options

In Indonesia, there are a few different ways you can own property in Bali. The most common options include obtaining a Hak Pakai (right of use) certificate, a Hak Milik (freehold title), or a Hak Guna Bangunan (right to build) certificate. 

For a foreign buyer, leasehold properties are often the safest and most accessible option. However, if you have Indonesian citizenship or a strong connection to a local nominee, you might consider freehold titles or other forms of ownership.

Hak Pakai and Hak Guna Bangunan

Hak Pakai (HP) is the right-to-use title, which allows foreign nationals to own property in Indonesia legally. 

Under Indonesian law, you can hold a Hak Pakai title for a maximum of 80 years, consisting of an initial period of 30 years, an extension of 20 years, and another extension of 30 years. This title is applicable both for land and landed properties, such as Bali villas.

Hak Guna Bangunan (HGB) is a right-to-build title granted to foreign-owned companies which permits them to own property in Indonesia. HGB titles can be held for a maximum of 60 years, consisting of an initial 30-year period with two possible extensions of 20 and 10 years.

Comparing the two options, the HP title is considered the best choice for foreign nationals seeking a second home in Bali under their own name.

Foreign Owned Legal Entities

Another option for a foreign buyer to acquire property in Bali is through a foreign-owned company, known as a Penanaman Model Asing (PMA) company.

A PMA company can hold land under the HGB title, giving you the right to build and operate your property.

Setting up a PMA company provides more protection compared to using a local nominee, which carries some risks. However, keep in mind that establishing a PMA company involves a more complex legal process and additional costs.

Choosing the Right Location

When considering buying a house in Bali, Indonesia, one of the most important factors is selecting the perfect location. Bali is renowned for its diverse real estate market, and understanding the different areas will help you make the best decision for your second home.

Popular Areas to Buy a Home in Bali

When it comes to popular locations, areas like Ubud, Sanur, Canggu, Kuta, and Seminyak come to mind. 

Each of these places offers a unique lifestyle and property options that cater to different preferences. 

Here’s a short description of Bali’s most popular regions that people consider when buying a house in Bali:

  1. Seminyak: An upscale beachside neighborhood in the south of Bali, perfect for those looking for a luxury vacation home close to the ocean. 
  2. Sanur: A more relaxed area located on the east coast of Bali. It’s best for those seeking a tranquil atmosphere away from the hustle and bustle of other popular tourist areas.
  3. Ubud: Situated inland and known as the cultural heart of Bali, this is a great destination for nature lovers who are interested in exploring the island’s rich history and culture. If you’re a yogi, this is the place for you!
  4. Jimbaran: A scenic bay on the west side of Bali with some beautiful white sand beaches, perfect for anyone wanting to enjoy some sunbathing and swimming. 
  5. Canggu: A hip area located between Seminyak and Tanah Lot which boasts plenty of cafes, bars, and restaurants as well as some charming villas surrounded by lush green rice terraces – great if you’re looking to invest in a modern property with easy access to plenty of amenities.
  6. Uluwatu: A favorite location for surfers looking to catch some waves or take in breathtaking sunsets from the cliffs overlooking the Indian Ocean.

Upcoming Regions

Beyond the established hotspots, Bali also has up-and-coming regions offering promising opportunities for foreign buyers. Some of these areas may offer lower property prices, new property developments, and improved infrastructure. Keep an eye on changes in local laws, land title regulations, and market trends to capitalize on these emerging opportunities.

By taking the time to understand the local market and considering different locations on the island, you can find the ideal spot for your dream home in Bali, Indonesia.

Finding the Perfect Property

Buying a house in Bali, Indonesia can be an exciting experience, especially as you navigate the vibrant real estate market. When choosing your dream property, consider the following factors to ensure you find the best option for you and your family.

Type of House

First, think about the kind of property you’re looking for. 

Bali offers a variety of housing options, including villas, traditional houses, and modern residences. 

Depending on the property type and land title you choose, the local laws and regulations may vary.

Property Value

As a foreign investor, the local property market and prices are major factors to consider when looking to buy a house in Bali, Indonesia.

Property prices in Bali can vary greatly depending on factors such as location, land size, and square meterage. It’s important to research the area thoroughly and determine what the market value of your desired property is. 

For instance, prime locations like Seminyak and Ubud often command higher prices due to their popularity among tourists and expats.

By doing some research into these aspects, you can get an idea of what properties in similar areas are worth and decide if it’s worth investing in or not. 

Additionally, checking out online listing sites can give you an idea of what rental rates look like in the area so you can get an approximate idea of how much return on investment you can expect from buying a home there.


When searching for your perfect home in Bali, consider your lifestyle and the amenities you want. 

Some properties offer luxurious features, such as private swimming pools, spacious gardens, and stunning views. 

Meanwhile, others prioritize practical amenities like easy access to local shops, schools, and healthcare services.

In general, the amenities you choose can impact your property value, rental income potential, and overall satisfaction with your new house in Bali.


Property prices in Bali vary depending on location, size, and property type. 

Luxury real estate in prime locations can be quite expensive, while properties in more remote areas or with limited budgets may offer more affordable options. Your real estate agent can help you search for properties based on your preferences and budget.

Don’t forget to factor in the additional costs of owning property in Bali, such as taxes, maintenance fees, and exchange rates. 

Financing Your Dream House

Finding the perfect house in Bali, Indonesia can be an exciting process. Once you’ve found your dream home, it’s time to consider the financial aspects. Here, we’ll explore several financing options for your new Bali villa like local bank financing, developer financing, and cash payment.

Local Bank Financing

Getting a mortgage through an Indonesian bank is a viable option for financing your property purchase. 

It’s important to research the various offerings by different banks before selecting your best option. 

Again, remember that foreign buyers will need to obtain either a Hak Pakai or Hak Guna Bangunan title to legally own property in Bali. Securing this title beforehand will make it easier for you to apply for a loan.

Local banks might require you to maintain a certain amount of money in an account or an investment with them to qualify for financing. 

Don’t forget to consult with your chosen bank about exchanging your home currency for Indonesian Rupiah, as exchange rates may impact your budget.

Developer Financing

Property developers in Bali may offer financing options for your dream house, particularly for off-plan or newly built properties. 

Developer financing can be an attractive choice if you’re working with a limited budget, as the payment terms and interest rates may be more flexible.

Before committing to developer financing, ensure you conduct thorough due diligence on both the property and the developer to ensure they have a trustworthy track record. 

Get legal advice, if necessary, to help you understand the fine print of financing agreements.

Cash Payment

If you have the means to make a cash payment for your Bali villa, it can save you from the complexities of bank loans and developer financing. 

Paying with cash allows you to skip the interest rates and negotiate better property prices with property owners. But be careful of scams. As always, do your due diligence.

Working with Real Estate Agents

When considering buying a house in Bali, Indonesia, it’s important to understand the intricacies of the local real estate market, property laws, and your options as a foreign buyer. 

Collaborating with experienced real estate agents can make buying a house in Bali so much smoother. Plus, they can help you navigate Indonesian law efficiently.

Some reliable real estate agencies in Bali include Bali Realty, Ray White Property Group, and Paradise Property Bali. These agencies have a proven track record of assisting foreign buyers in finding their dream Bali villa or property. They are proficient in local laws, land titles, due diligence processes, and can help you secure a suitable property for your needs.

Closing the Deal

In this section, we’ll discuss the final steps you need to take as you close the deal on your Bali property transaction.

Due Diligence

Before you finalize your decision to purchase a property, I can’t stress enough the importance of conducting thorough due diligence. 

This may sound like a fancy legal term, but really it just means doing your homework to make sure you’re making a well-informed decision. This process involves checking the land title, ensuring the property meets local laws and regulations, and verifying the seller’s ownership. 

By conducting due diligence, you can avoid potential legal issues and ensure that the property you’re investing in meets all your needs and expectations. Think of it as taking a closer look under the hood before you drive that shiny new property off the lot! 

Notary Role

Congratulations on finding your dream property in Bali! As you get ready to close the deal, one essential step you don’t want to overlook is hiring a reputable notary. 

A notary in Indonesia plays a vital role in drafting and legalizing property agreements, helping you navigate through Indonesian law, and facilitating the transfer of hak pakai, hak milik, or hak guna bangunan titles. 

It is always a good idea to choose a notary experienced in working with foreign buyers and is familiar with Bali’s real estate market.

Taxes and Fees

When purchasing a property in Bali, keep in mind that you’ll also need to set aside funds to cover taxes and fees involved during the closing process. These may include:

  • Land and Building Acquisition Duty (BPHTB): A tax imposed on property transfers, usually calculated as a percentage of the property’s value.
  • Notary fees: A fee for the notary’s services, usually charged as a percentage of the property’s value.
  • Agent commission: Typically paid by the seller, real estate agents may charge a commission based on a percentage of the property’s sale price.

Frequently Asked Questions

Can a foreigner buy a house in Bali?

Foreigners cannot buy freehold property in Bali, as the Indonesian law limits this right to citizens with a “Hak Milik” title. 

However, foreigners can acquire other ownership titles, such as the “Hak Pakai” (Right-to-use) or “Hak Guna Bangunan” (Right-to-build) titles, by setting up a foreign investment company called a “Penanaman Model Asing” (PMA).

How much does a house cost to buy in Bali?

The cost of buying a house in Bali varies widely depending on factors like location, property size, and amenities. 

On average, a modest house in a central location can cost around USD $100,000, while luxury villas can range from USD $300,000 to over a million dollars.

Is buying property in Bali a good idea?

Investing in Bali’s real estate market can be a good idea if you are looking for a second home (vacation home) or seeking rental income from the flourishing tourism industry. 

However, it is crucial to understand Indonesian property laws, perform due diligence, and work with experienced real estate agents to navigate the local market.

Many foreign nationals and investors have successfully purchased Bali properties, but it’s best to be cautious and well informed about local laws and market trends before making any decisions.

Can a US citizen live in Bali?

Yes, American citizens can live in Bali with the appropriate visa, such as a social-cultural visa, retirement visa, or a temporary residence permit called “Kartu Izin Tinggal Terbatas” (KITAS). These visas have varying requirements and restrictions, so be sure to research the best option for your intended stay in Bali.

How much does it cost to live in Bali in US dollars?

The cost of living in Bali varies based on factors like location, lifestyle, and personal preferences. On average, a couple can enjoy a comfortable lifestyle in Bali for around USD 1,500 to 2,500 per month, including accommodation, food, transportation, and leisure activities.

Bali offers a range of living costs, from budget-friendly options to luxurious lifestyles, so there is something for everyone.

How long can a US citizen live in Bali?

American citizens can stay in Bali for up to 30 days with a tourist visa-on-arrival, extendable for another 30 days. 

For longer stays, US citizens can apply for different types of visas and permits, such as the social-cultural visa, retirement visas, or temporary residence permits (KITAS). 

Can a US citizen own property in Indonesia?

US citizens cannot own freehold property in Indonesia, as the “Hak Milik” title is reserved for Indonesian citizens. 

However, American nationals can acquire property through other ownership titles like “Hak Pakai” or “Hak Guna Bangunan” by setting up a PMA company. It is crucial to work with local experts and legal advisors to ensure a compliant property purchase.

How long can you own a property in Bali?

Ownership duration depends on the title. The Hak Pakai title typically allows foreign property owners to have the right to use it for 25 years, extendable for an additional 20 years, and another 25 years after that. 

The Hak Guna Bangunan title usually grants 30 years, extendable for 20 years, followed by a 30-year extension.

It is essential to understand the terms and conditions of specific land titles as they dictate the length of property ownership.

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