Are you interested in buying a villa or house in Ubud? Ubud, located in the heart of Bali, is one of the most popular destinations in Indonesia for tourists and expats. Many people love Ubud’s cultural richness, natural beauty, and vibrant community and decide to make it their home or invest in property.
Buying and owning real estate in Ubud as a foreigner can be challenging due to Indonesian laws and regulations. This article will guide you through the process of buying and owning property in Ubud as a foreigner, including the legal requirements, the different types of property ownership, and the steps you need to take to make a successful investment.
Can foreigners purchase real estate in Ubud?
Ubud is a beautiful Balinese town known for its lush greenery, art, and culture. Many foreigners who visit Bali often consider buying real estate in Ubud. The good news is that foreigners can buy real estate in Ubud, but the process can be complicated.
Different kinds of property ownership
There are three types of property ownership in Indonesia, including Hak Milik (Right to Own), Hak Pakai (Right to Use), and Hak Guna Bangunan (Right to Build). Foreigners cannot obtain Hak Milik but can establish a PT PMA instead. This PT PMA, a legal entity, can obtain Hak Pakai and Hak Guna Bangunan.
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How to buy a villa in Ubud?
If you’re a foreigner looking to buy a villa or house in Ubud, there are a few ways to do so:
- Leasehold: Under a leasehold title, foreigners can lease property for a long term, mostly 25 years. It is important to say that the foreigner doesn’t own the property but is renting it for a certain period. Still, leaseholds can be an interesting investment method in Indonesian real estate.
- Indonesian nominee: Foreigners can use an Indonesian nominee to buy land registered under the nominee’s name. It is important to consult a legal professional before proceeding due to the legal implications and risks involved.
- Foreign-owned company (PT PMA): Establishing a PT PMA in Bali is a secure and popular way for foreign investors to own land and property in Ubud. This option provides greater protection and control over the investment.
It’s important to work with a reliable local real estate agent and a legal professional with expertise in Indonesian real estate regulations. They can help you obtain the right visa, establish the PT PMA, get the right paperwork, and find land or property that meets your needs.
Buy property in Ubud with a PT PMA
Foreigners interested in buying property in Ubud can do so through a PT PMA, which is recognized as a legal entity in Indonesia. This type of company is foreign-owned and can buy property in Ubud and other regions of Indonesia.
A PT PMA can acquire titles such as Hak Pakai and Hak Guna Bangunan. These titles are essential for purchasing property through the company. Foreigners can also obtain a KITAS residency permit through the PT PMA, allowing them to stay in Indonesia for up to two years.
A step-by-step guide to buying real estate in Ubud
Purchasing real estate in Ubud can be accomplished by following these six steps:
- Use a notary, accountant, or visa agency to assist with establishing a PT PMA.
- Obtain the property certificate from the Indonesian National Land Office (BPN).
- Provide proof of payment and settle the payment.
- Verify that the requirements for Hak Guna Bangunan or Hak Pakai are met.
- Request the building approval (PGB) to obtain the right to build.
- The BPN will issue the property certificate under your PT PMA.
Real estate prices in Ubud
Real estate prices in Ubud can vary depending on the location and type of property. An overview of average real estate prices in Ubud is provided in the table below.
| Average buy price | Average price/m2 | Average rent price | |
|---|---|---|---|
| House | IDR 2 billion ($126,000) | IDR 7 million ($441) | IDR 100 million ($6,300) |
| Land | IDR 500 million ($31,500) | IDR 1.5 million ($94.50) | – |
Why is it smart to invest in real estate in Ubud?
Investing in real estate in Ubud can be smart due to various reasons. Ubud is a popular tourist destination with a growing tourism industry that attracts many visitors yearly, making the real estate market quite attractive.
The Balinese town offers a strong rental market as tourists prefer to rent vacation homes, villas, and apartments instead of staying in hotels. Ubud is surrounded by stunning natural scenery, including rice paddies, forests, and rivers, making it a peaceful and rejuvenating vacation spot. Compared to other popular tourist destinations, the real estate prices in Ubud are still relatively affordable, allowing investors to get in early before prices increase.
Bali is known for its political stability, which provides real estate investors a safe and secure environment. However, it is essential to do thorough research and seek professional advice before making any investment decisions.
Interested in investing in Ubud real estate?
Ubud offers a unique opportunity for investing in real estate due to its cultural heritage, stunning natural scenery, and increasing popularity as a tourist destination. Not only that, but the cost of living in Ubud is relatively affordable, and the potential for long-term appreciation in property value is high.
When you want to buy a villa in Ubud, it is crucial to understand the legal requirements for foreign buyers. Working with a trusted real estate agency specializing in Indonesian real estate is recommended. An agency can assist you in setting up a PT PMA, obtaining the necessary licenses and permits, and finding the perfect property that meets your requirements. They will make sure your investment will become successful.
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Frequently Asked Questions (FAQs)
Can a foreigner buy property in Ubud?
Foreigners can buy real estate in Ubud, but the process can be complicated. They can do so through a leasehold, a PT PMA, or an Indonesian nominee.
Is buying a villa in Ubud a good investment?
Investing in real estate in Ubud can be smart due to various reasons. Ubud is a popular tourist destination with a growing tourism industry that attracts many visitors yearly, making the real estate market quite attractive.
How much does a villa in Ubud cost?
A small villa in a less desirable location might cost around IDR 2 billion ($126,000), while a larger villa in a prime location could cost IDR 20 billion ($1.26 million) or more. The price of land can range from around IDR 500 million ($31,500) to IDR 10 billion ($630,000).
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What can you tell me about Skyline Development Service and their pre construction Villas
Hi John! When considering pre-construction villas from a developer, such as Skyline Development Service, it’s crucial to conduct thorough due diligence. This includes verifying the developer’s track record, reviewing the project’s legal and planning permissions, and assessing the financial health of the developer. Always visit the site, consult with local real estate experts, and consider legal advice to ensure your investment is secure.