What You Need to Know About Property Ownership Title in Bali
From Leasehold to Right to Build, discover the different types of property ownership in Bali and what they mean for foreign buyers in this informative article.
Leasehold (Hak Sewa):
- Any type of VISA, including Tourist Visa
- Property rights are defined on a notarized agreement
Right to Build (Hak Guna Bangunan/HGB):
- Need to have a PT PMA
- Need a KITAS/residence permit
Right to Use (Hak Pakai):
- Need KITAS/residence permit
- Can only buy a single property per title
Right to Own (Hak Milik):
- Only eligible for Indonesian citizen
Leasehold (Hak Sewa)
When it comes to leasehold properties in Bali, the good news is that you can lease a property with any kind of Visa, including a tourist Visa. Unlike other forms of property ownership, leasehold doesn't require foreign nationals to register a company or obtain a residence permit in Indonesia. This makes the process much more accessible and straightforward for those looking for leasehold properties in Bali.
Leasehold villa in Canggu.
Photo by Bali Home Immo
In Bali, leasehold ownership grants you full control over the property for a specified amount of time, typically 25 years, although contracts for up to 30 years are not unusual, as well as negotiated extensions of 10-20 years. This flexibility, attractive price, and ease of acquiring a leasehold property have made it a popular choice for foreigners looking to invest in Bali's vibrant property market.
Right to Build (Hak Guna Bangunan/HGB)
On the other hand, if you are considering acquiring a freehold property in Bali through a foreign-owned company, known as a PT. PMA (Perseroan Terbatas Penanaman Modal Asing), a specific visa is required. The title you will get through PT PMA is an HGB (Hak Guna Bangunan) title, which will allow you to fully own property for up to 70 years. The 70 years comprises 30 years of initial validity + 20 years of extension + 20 years of renewal.
And the great thing about this title is you can pass the HGB title to another company or sell it to Indonesian nationals and convert the HGB title to the Hak Milik title, which makes the property remains highly valuable to Indonesian nationals. You can also buy several properties under the name of the company and use them to operate as a business.
HGB title is excellent to build a villa or apartment complex.
Photo by Bali Home Immo
To acquire a freehold property through a PT. PMA, first, you’ll have to register a new PT PMA or acquire an existing one, you can set up a 100% foreign-owned PT PMA in the Hospitality Management Consulting category for a short-term villa rental or the Real Estate category for a long-term villa rental. You can acquire property in the name of your PT PMA immediately after the company’s Articles of Association have been approved and the company’s tax card has been issued which usually takes around 2-3 weeks.
Second, you must obtain a specific visa called a "KITAS" (Kartu Izin Tinggal Terbatas), which is a limited stay permit. It is important to note that the process of obtaining a KITAS can be more complex and time-consuming compared to leasehold properties. Working with a reputable legal and consulting firm specializing in foreign investments can greatly assist you in navigating through the necessary procedures and requirements.
Right to Use (Hak Pakai)
The Hak Pakai title has some similarities to HGB. Those similarities include:
- Foreigners need to have a residence permit/KITAS.
- Ownership validity of up to 70 years, comprises 30 years of initial validity + 20 years of extension + 20 years of renewal.
- Family can inherit the title
- Can be sold to Indonesian nationals and converted to Right to Own title (Hak Milik)
Besides those similarities, the Hak Pakai title doesn’t require you to own a PT PMA and can be bought individually. However, several limitations made many foreigners not choose this title:
- Hak Pakai title only let you own land that has a building on it.
- Limitations to operating as a business
- A minimum property value of 5 billion rupiahs for a building built on land, and 2 billion rupiahs for an apartment.
- Can only buy a single property.
Right to Own (Hak Milik)
Hak Milik title is hereditary, permanent, and valid for a lifetime. Basically, the Right to Own is the strongest property title that people can have over land in Indonesia.
A Hak Milik title can be transferred to another party through inheritance or purchase. However, Hak Milik is only owned by Indonesian citizens and legal entities that have met the requirements.
Only Indonesian citizens can own Hak Milik title.
Photo by dashu83 on Freepik
Foreigners who acquire property rights by inheritance without a will or by marital property mixing, as well as Indonesian citizens who have property rights but lose their citizenship, must relinquish their property rights within one year of acquiring the rights or losing their citizenship.
In summary, if you are interested in leasehold properties in Bali, you can proceed without needing a specific visa. The leasehold agreement, which grants you temporary ownership, can be established without the complexities associated with obtaining a residence permit or registering a company. However, if you have your sights set on acquiring a property through a PT. PMA, it is crucial to ensure that you meet the necessary visa requirements and comply with Indonesian regulations.
