3 important local real estate laws in Bali
Most of the property regulations set by the Indonesian government also apply to Bali. However, several local real estate laws in Bali apply to this island. The three most important rules are explained below.
1. Zoning laws in Bali
Bali’s land zoning laws are one of the most important local real estate laws in Bali. It’s important to understand the zoning of a property before starting construction projects in Bali. The island has designated residential zones where building constructions are allowed exclusively for dwelling purposes. In contrast, green zones are reserved for agricultural use and do not permit the construction of structures such as villas.
2. Building Approval (PBG)
It’s mandatory to obtain Building Approval, locally known as Persetujuan Bangunan Gedung (PBG). This license shows compliance with the local building regulations and ensures the project’s safety by minimizing potential risks. The PBG certificate in Bali replaces the Building Permit (IMB), which is no longer needed to apply for when building a villa in Bali.
3. Height restriction law in Bali
One of the other important local real estate laws in Bali concerns the height restriction of buildings. There is a height restriction of 15 meters (more or less similar to a coconut tree) over any structure imposed in 1977, which is why you do not see any skyscrapers on the island.
The tallest building is the Grand Bali Beach Hotel,d which was built in 1966 before the enactment of the regulation. There are cultural reasons for this imposition, such as that the building should not be higher than Pura Besakih and that coconuts symbolize the interaction between the environment and the people. All in all, this height restriction minimized the detriment of Bali’s natural landscape, and for that, it remains one of the most important local real estate laws in Bali.
How can foreigners buy land in Bali?
For foreigners interested in buying property in Bali, it’s essential to understand the national and local real estate laws in Bali. While direct ownership of freehold property isn’t allowed for foreign nationals, there are several other methods to invest in Bali’s real estate market.
- Invest in property through a PT PMA: PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a foreign-owned company that allows foreigners to buy property in Bali. Through a PT PMA in Bali, one can buy a freehold or leasehold property. This method is popular due to its safety and the added benefit of obtaining an Investor KITAS, a two-year residency permit. If you buy freehold property through a PT PMA, you must convert the land title to Hak Guna Bangunan (HGB).
- Buy leasehold property: This method allows an individual or legal entity the right to own and use real estate for a specified period, typically up to 80 years. It’s a cost-effective alternative to freehold ownership.
- Buy under a Hak Pakai title: Hak Pakai allows both foreigners and Indonesians to buy and use a property. However, ownership is limited to the building or unit, and a residency permit in Indonesia is required.
- Buy with a passport: As of 2024, foreigners can purchase Balinese property using just their passport. There are size and minimum value restrictions based on the region, with specific values set for landed houses and apartments.
National regulations and local real estate laws in Bali can change. Given the complexities and potential pitfalls of buying property in Bali, it’s highly recommended to work with a local real estate agent to ensure a smooth and compliant transaction.
Confused about Bali’s real estate laws? We’re here to help!
Navigating Bali’s local real estate laws is crucial for property buyers and investors to ensure compliance with Indonesian regulations. From land titles to zoning restrictions, understanding these laws can be overwhelming. Our team of experts specializes in Bali’s property regulations and can provide tailored advice to help you make informed decisions. Leave your details below, and we’ll reach out to assist you, or email us directly at [email protected] for more information.
Frequently Asked Questions (FAQs)
Are foreigners allowed to own property in Bali?
Foreigners are allowed to own property in Bali. Although foreign nationals are excluded from owning property under Hak Milik, the highest form of property ownership, they are allowed to buy property through a PT PMA, a leasehold agreement, the Hak Pakai or Hak Guna Bangunan title, or with only their passport (if they meet the requirements).
Can I build a villa in Bali?
You can build a villa in Bali if you follow all the local real estate laws and regulations in Bali, starting with obtaining the right land title and compliance with zoning laws. Next, you must obtain a Building Approval (PBG) license and possibly several other permits, depending on the villa’s location and desired purpose.
Is there a property tax in Bali, Indonesia?
Yes, there are property taxes in Bali for all transactions, such as when buying, renting, or selling property in Indonesia. It includes the Transfer Tax (BPHTB) and Land and Building Tax (PBB).
