A Simple Guide to Buy Property with Bali Home Immo

 

You have contacted us and expressed your interest with one of our listings. Then our sales agent connects you with the property owner to negotiate on the price. Finally both parties agree with the price and are ready to take the next steps. In this simple guide, we will explain how the villa buying process with Bali Home Immo goes.

 

Buying Process from Overseas/Abroad/Remote

 

Bali Home Immo understands that not all of our clients have the privilege of free time to travel directly to Bali. Therefore, we accommodate such concerns to reduce the inconvenience to our clients abroad.

 

Freehold

 

If you want to buy a freehold property with Bali Home Immo while you are not in Bali, we have you covered. If you want to make sure about the requirements to buy a property, you can also check out this article here. Now, let’s get to the point.

 

 

1 . After negotiating the price with the property owner and reaching an agreement, our legal team will create a Memorandum of Understanding (MoU) and/or Pengikatan Perjanjian Jual Beli (PPJB), which is a binding sales agreement. This serves as proof that the property is reserved for you and no one else can buy it.

2 . You'll then digitally sign the MoU or binding sales agreement. We typically use Docusign for this purpose.

3 . Following your agreement, you'll make the deposit payment as previously arranged.

4 . Now, you'll need to initiate a Power of Attorney (PoA) process in your home country, adhering to Apostille regulations. You can nominate a trusted individual or our sales agent to represent you and sign the documents on your behalf. This is also when you'll make the remaining payment.

5 . Once the PoA and final payment are completed, your chosen representative will sign the Akta Jual Beli (AJB), or Sale and Purchase Agreement.

6 . After your representative signs the AJB, the title deed will be transferred from the previous owner to you, making you the new owner of a freehold property in Bali.

 

Leasehold

 

Leasehold properties are a popular choice for many foreigners investing in Bali. You can check this article here to know more about the requirements to have a leasehold property in Bali.

 

 

1 . Once you've agreed on the price and terms, our legal team will draft the MoU, which you'll sign digitally.

2 . After digitally signing the MoU, you'll make a deposit payment for the property.

3 . Next, you'll need to complete the Power of Attorney (PoA) process in your home country following Apostille regulations. You can nominate a trusted person or our sales agent to sign the documents on your behalf.

4 . Your chosen representative with PoA will sign the lease agreement in the presence of a notary.

5 . After the lease agreement is signed, you'll need to make the final payment as per your agreement.

6 . Once the final payment is settled, the lease agreement will be transferred to you, officially making you the new owner of a leasehold property in Bali.

 

Buying Process On-Site

 

Freehold

 

1 . After negotiating the price with the property owner and reaching an agreement, our legal team will create a Memorandum of Understanding (MoU) and Pengikatan Perjanjian Jual Beli (PPJB), a binding sales agreement. This document serves as proof that the property is reserved for you and no one else can purchase it.

2 . You'll then sign the MoU or binding sales agreement.

3 . Following the agreement, you'll make the deposit payment as previously arranged.

4 . Subsequently, the notary will conduct due diligence.

5 . Once due diligence is completed, you'll need to finalize the remaining payment and cover any necessary taxes.

6 . After the final payment, you can sign the final document, the Akta Jual Beli (AJB), or Sale and Purchase Agreement.

7 . With the AJB signed, the title deed will be transferred from the previous owner to you, officially making you the new owner of a freehold property in Bali.

 

Leasehold

 

1 . Once you've agreed on the price and conditions, our legal team will draft the MoU, which you'll sign digitally.

2 . After digitally signing the MoU, you'll make a deposit payment for the property.

3 . Next, the notary will conduct due diligence, which typically takes around 7 working days. This thorough process ensures all documents are in order.

4 . Following due diligence, you'll sign the lease agreement in the presence of a notary. The lease agreement becomes effective after you complete the payment.

5 . After signing the lease agreement, you'll need to make the final payment as per your agreement.

6 . Once the final payment is made, the lease agreement will be transferred to you, officially making you the new owner of a leasehold property in Bali.

 

Those are how the buying process works if you choose to purchase Bali property with Bali Home Immo. Regardless of where you are located, abroad or in Bali, we are fully prepared to provide you with first class service. In addition, you can explore our carefully selected collection of properties that includes land, apartments, villas and much more, not only in Bali but also in other regions.

Disclaimer: The information provided in this article is intended for general informational purposes only. It should not be considered as legal advice or used as a basis for any legal, financial, or real estate decisions. Bali Home Immo does not accept responsibility for any consequences or losses arising from the use of this article's content. We strongly advise all readers to consult with their legal team, financial advisors, or real estate experts before making any property-related decisions, investments, or legal agreements. Property transactions involve a range of complex legal and financial considerations that may vary based on specific circumstances. This article is not a substitute for professional advice, and its content may not reflect the most up-to-date legal regulations or market conditions since this article is written. Readers are encouraged to seek personalized guidance to ensure that their property transactions comply with all relevant laws and regulations and are in their best financial interests.

10 Crucial Considerations Before Buying a Villa in Bali

 

With its stunning landscapes and vibrant culture, Bali has become a sought-after destination for expatriates looking to invest in a villa. Before you embark on this exciting journey, you must be well-informed and make prudent decisions. Here are 10 key considerations for those who are contemplating the purchase of a villa in Bali.

 

1. Location Matters:

Selecting the right location is paramount when investing in a villa. Consider the proximity to popular attractions, beaches, and amenities. A balance between tranquility and accessibility to Bali's vibrant lifestyle is crucial. Areas like Seminyak, Canggu, and Umalas offer a mix of both, ensuring a perfect blend for a comfortable living experience. 

1. Rental Potential:

For those looking to make their investment work for them, assessing the rental potential of the villa is vital. Bali's booming tourism industry makes short-term rentals a lucrative option. Investigate the demand in the chosen area and ensure that the property management services are reliable for seamless income generation. Here's how you can forecast the rental potential based on the daily rate. 

1. Amenities and Design:

The allure of Balinese villas often lies in their unique design and luxurious amenities. Evaluate the villa's layout, the quality of materials used, and the presence of modern conveniences. Pools, lush gardens, and spacious living areas enhance not only your living experience but also the property's appeal to potential renters.

 

1. Land and Building Size:

Understanding the size of both the land and the building is crucial to ensuring your investment meets your expectations. A larger land size may provide more privacy and space, while a well-designed and efficiently used building space maximizes the villa's functionality.

 

1. Ownership Title/Leasehold:

Clarifying the ownership title is a critical step in the buying process. Ensure the villa has a proper freehold title or a secure leasehold arrangement. Legal assistance is highly recommended to navigate complex Indonesian property laws and safeguard your investment.

 

1. Infrastructure and Access:

Check the local infrastructure to ensure a comfortable living experience. A well-maintained road network, reliable utilities (water supply, electricity, drainage), and access to essential services contribute to the overall desirability of the location. Additionally, proximity to the airport and major transportation hubs is a practical consideration for frequent travelers.

1. Local Regulations and Zoning Laws:

Understanding and complying with local regulations and zoning laws is imperative. Verify that the villa adheres to the zoning regulations, and be aware of any restrictions that may impact your intended use of the property. This step is crucial to avoid legal complications in the future.

1. Surrounding Developments:

Research ongoing and planned developments in the vicinity. Upcoming infrastructure projects, commercial establishments, and residential developments can significantly impact the property's value and desirability. Choosing an area with positive growth prospects ensures long-term returns on your investment.

1. Budget for Maintenance and Renovation:

Factor in the costs associated with maintaining and potentially renovating the villa. A well-maintained property preserves its value and attracts better rental opportunities. Be prepared to invest in periodic maintenance and upgrades to keep the villa in optimal condition.

1. Reliable Seller: 

Last but not least, reliable seller. When navigating the intricate process of purchasing a villa in Bali, it's highly advisable to engage the services of a reputable real estate agency. A reliable agency acts as your trusted partner, guiding you through legalities, negotiating on your behalf, and offering valuable insights into the local market dynamics. Take the first step towards your dream villa in Bali – reach out to us and begin your investment journey with good advice. 

 

Investing in a villa in Bali is a thrilling endeavor that promises a unique blend of culture, luxury, and potential financial gains. By carefully considering these 10 crucial factors, you can make an informed decision that aligns with your investment goals and ensures a rewarding experience on the Island of the Gods.

 

Extending Your Lease in Bali: A Comprehensive Guide to Secure Your Property Investment

 

Investing in property is a significant decision, and when it comes to leasehold properties in Bali, understanding the intricacies of lease extensions is crucial for protecting your investment. As a foreign investor or resident in Bali, navigating the lease extension process can seem daunting, with various legal and financial considerations to take into account. In this comprehensive guide, we will delve into the essential aspects of extending your lease in Bali, providing you with the knowledge and insights to make informed decisions.

 

I. Leasehold Property in Bali: An Overview

 

1. Understanding the basics of leasehold property in Bali

 

Leasehold property in Indonesia is regulated by the Undang Undang Pokok Agraria (Basic Agrarian Law). This law provides the legal framework for property rights in the country.

 

For non-Indonesian citizens, the most common type of title used when they lease property is "Hak Sewa" or Right to Rent. This title offers flexibility for negotiations and allows for various arrangements, including building on the leased land, making renovations, and changing the building structure. To obtain this title, all you need is a valid Visa.

 

Hak Sewa is the most popular choice for investors in Bali.

Image by Canva

 

The second type of title is "Hak Pakai" or Right to Use. While it offers similar benefits, it is rarely utilized by most investors in Bali due to the additional administrative requirements which include obtaining a KITAS (Limited Stay Permit).

 

The terms and conditions of lease extensions under the Hak Sewa title are determined through negotiations between the parties involved. This flexibility allows for securing the use of the property for an extended period and ensuring the interests of both the landowner and the tenant are aligned.

 

1. Rights and obligations of both landlords and tenants during the land lease

 

The renter, or tenant, of a leasehold property in Bali, has specific rights and obligations. These include the right to use and occupy the property for the agreed-upon duration, the responsibility to pay rent and other fees on time, and the duty to maintain the property according to the lease agreement.

 

Similarly, the lessor, or landowner, also has rights and obligations throughout the lease period. These rights include receiving rent payments in a timely manner, ensuring that the property is in a livable condition, and complying with any other terms stated in the lease agreement.

 

Image by Canva

 

It is important to note that while these rights and obligations are essential and regulated by the law, in practice, the specifics can be negotiated between the property owner and the lessee. This is because the principle of freedom of contract, known as "pacta sunt servanda," allows for flexibility in determining the rights and obligations between both parties.

 

1. Benefits of extending your lease in Bali

 

Extending your lease offers several benefits and holds great importance for property owners in Bali. By securing a lease extension, you maintain long-term control and enjoyment of the property and allows you to capitalize on the potential appreciation of property value over time.

 

1. Duration and terms of leasehold agreements

 

In Indonesia, there is no specific law that determines the maximum length of a property lease. The duration of a leasehold agreement usually depends on the agreement made between the owner of the land and the person leasing it. However, it's important to know that in Bali, notaries typically don't certify agreements with very long periods, like 80 or 100 years. Instead, they may suggest dividing the lease into shorter terms, such as 30 years, with the option to extend for another 20 years. In Bali, the lease duration is typically 20-30 years with the possibility of a 10-20 year extension. Although there are no specific laws governing this, this is a common practice in the Bali property market.

 

Lease extension in Bali is negotiable.

Image by Canva

 

Typically, the terms and conditions for the lease extension are outlined in the contract and can be negotiated until both parties reach an agreement. One advantageous condition for the lessee is a fixed rate for the lease extension. This means that you can pay for the extension period based on the price at the time of purchasing the property, rather than the future price after the lease expires.

 

However, it's important to note that most property owners set a time limit within which you must pay for the lease extension at the fixed rate. Usually, they provide around one to five years for you to make the payment.

 

Another important point to consider is that in Bali, notaries create separate documents for the original lease and the extension. For instance, if your initial lease is for 30 years and the extension is for 20 years, the notary will prepare one document for the 30-year lease and another separate document for the 20-year extension.

 

II. Extending Lease: To do or Not to do?

 

Factors to consider before deciding to extend your lease

 

When thinking about extending your lease, you have to consider various factors that can impact your investment. These factors may include:

 

Property Value: Assess the current and potential future value of the property. Consider factors such as location, market demand, and anticipated growth in property prices. A lease extension may be more favorable if the property's value is projected to appreciate significantly.

 

Rental Income: Evaluate the rental income potential of the property over the extended lease period. Analyze Bali’s market trends, rental demand, and potential returns on investment. Ensure that the rental income generated from the property justifies the costs and efforts associated with a lease extension.

 

Calculating the rental income potential of your property is essential.

Image by Canva

 

Long-Term Plans: Assess your long-term plans for the property and how they align with a lease extension. Consider whether the property meets your future needs and goals, both personally and financially. Evaluate whether extending the lease will allow you to achieve your desired outcomes and maximize the return on your investment.

 

Legal and Financial Advice: Seek professional advice from legal and financial experts who specialize in property matters in Bali. They can provide valuable insights and guidance tailored to your specific circumstances. Their expertise will help you make an informed decision and navigate the complexities of lease extension agreements.

 

By carefully considering these factors, you can make a well-informed decision on whether to proceed with extending your lease. It is important to weigh the benefits and potential risks to ensure that the lease extension aligns with your investment objectives and long-term plans.

 

III. Lease Extension Costs and Financial Considerations

 

Calculating the total price of land extension uses the same formula as leasing land where you have to multiply the price per are per year by the land size and the extension/lease duration:

 

Price per are x Land size x Extension/lease duration = Total price

 

For example, if you want to extend the lease of your 5 are land for 10 more years and the landlord asks you to pay 15 million rupiahs per are per year then here’s how to calculate the total price:

 

IDR 15.000.000 x 5 are x 10 years = IDR 750.000.000

 

This formula is used in Canggu, Pererenan, Umalas, Seminyak and Bukit Peninsula, hence it’s very uncommon to find landlords in those areas that would offer a global price both for leasing and extension. One crucial thing that you must do before calculating the total is you must ensure that the price given by the landlord already includes the notary fee (max. 1% of the total price) and agent fee (if a real estate agent is involved) or not, otherwise, you will have to take those into account as well.

 

Image by Canva

 

Generally speaking, the notary fee is the only additional cost that a renter has to pay whereas agent fee and income tax (known as Pajak Penghasilan or PPH) are the landlord’s responsibility. Annual land and building tax (Pajak Bumi dan Bangunan or PBB) throughout the extended period will still be the renter’s burden unless otherwise specified in the extension agreement or the initial lease agreement.

 

IV. Steps to Extend Your Lease

 

A. Engaging Real Estate Agent Assistance and Advice

 

When you have made the decision to extend your lease, it is advisable to engage the services of a reputable real estate agent who specializes in leasehold properties in Bali. A knowledgeable agent can provide valuable assistance and advice throughout the lease extension process, ensuring a smooth and successful experience.

 

Advice from local experts will be super helpful when you decide to extend your lease.

Image by Canva

 

At Bali Home Immo, we have a team of experts who possess a thorough understanding of the local property market. With over a decade of proven expertise, we have helped numerous clients navigate the complexities of lease extensions in Bali. Our dedicated team is committed to guiding you through the entire process, offering personalized assistance every step of the way.

 

B. Negotiating Lease Extension Terms and Conditions

 

Once you have engaged a real estate agent, they will assist you in negotiating the terms and conditions of your lease extension with the landowner or lessor. This negotiation process involves discussions on various aspects, including the duration of the extension, the price of the extension and payment terms. 

 

C. Drafting and Signing the Lease Extension Agreement

 

Once the terms and conditions of the lease extension have been agreed upon, a lease extension agreement will be drafted. This legal document will outline the agreed-upon terms, including the duration of the extension, any rent adjustments, and any other provisions specific to your lease arrangement. 

 

Image by Canva

 

It is essential to seek legal advice to ensure that all the terms are accurately reflected and aligned with your expectations. Once you are satisfied with the terms, both parties, including the landowner or lessor, will sign the agreement before a notary, making it legally binding.

 

V. Conclusion

 

Extending your lease in Bali can be a strategic decision to secure your property investment and enjoy long-term benefits. Understanding the basics of leasehold property, reviewing your current lease agreement, and considering the factors involved are crucial steps in the process. Engaging the services of a reputable real estate agent specializing in leasehold properties can greatly assist you throughout the lease extension journey.

At Bali Home Immo, we have a team of experts with extensive knowledge of the local property market and lease regulations. We recommend exploring our leasehold property catalog on the Bali Home Immo website, where you can find a wide range of properties with lease extension options. Schedule an appointment today and get a free consultation with our team.