Bali’s enchanting landscapes, vibrant culture, and serene beaches have made it a sought-after destination for investors looking to own a piece of this tropical paradise. However, before venturing into the realm of buying land in Bali, it is essential to carefully evaluate key factors. Discover our Essential Checklist before buying a land in Bali.
Legal Considerations
Start by understanding the legal framework surrounding land ownership in Bali. As a foreign investor, familiarize yourself with regulations, restrictions, and requirements imposed by the Indonesian government on foreign land ownership. This includes acquiring a land leasehold under a foreign-owned company, known as a PT PMA.
Land Ownership and Accuracy
Verify the legitimacy of land ownership and ensure the seller possesses valid rights to sell the property. Engage a reputable notary or legal professional to conduct meticulous due diligence, including a thorough land title search, to confirm the accuracy and validity of ownership documents.
Zoning
Zoning is a system that classifies land for specific purposes in Bali. It includes green, yellow, purple, orange/brown, and red zones. Green zones are for agriculture, yellow zones for residential use, purple zones for tourism, orange/brown zones for commercial use, and red zones for protected areas. Understanding the zoning regulations is crucial to ensure your land use aligns with the designated classification. Stay updated on any changes to zoning laws.
Location
Consider the location of the land you plan to purchase. Evaluate proximity to essential amenities such as hospitals, schools, markets, and transportation hubs. Assess access to major roads, highways, and popular tourist attractions, as these factors can impact property value and development potential.
Infrastructure and Access
Evaluate existing infrastructure and access to the land. Ensure utilities such as water, electricity, and internet connectivity are readily available. Consider the quality of roads and transportation links for easy accessibility and future development prospects.
Tax Implications
Understanding the tax implications associated with land acquisition in Bali is crucial. Consult with tax professionals to determine the applicable taxes, such as acquisition tax, land and building tax, and income tax. Being well-informed about tax obligations beforehand will enable effective budget planning and prevent unforeseen financial burdens.
Environmental/Surrounding Factors
Assess the surrounding environment to gauge its potential impact on your land investment. Consider factors such as proximity to beaches, protected areas, agricultural land, or other natural features. Environmental considerations can influence the property’s value and development opportunities.
Building Permit
A Building Permit (PBG) is a crucial legal document that confirms that a building complies with zoning and construction standards. PBG is a legal document that confirms the building complies with zoning and construction standards. In Bali, PBG is essential since the Bali administration office issues it to ensure all the environmental and land regulations are adhered to. PBG is important and highly recommended before buying as it minimizes the risk of purchasing a property with no occupation permissions.
Sertifikat Laik Fungsi (SLF) is another important document to consider. SLF acts as a function certificate issued by the local government indicating that a building has fully conformed to regulations and standards. It determines whether a building is legal and livable. Therefore, invest in a property that has SLF already issued, or you can procure SLF through different property agents competent enough to get it. Building without an SLF is risky since it could be demolished, which could lead to uncountable losses.
Land Borders
Ensure a clear understanding of the land’s boundaries to avoid any disputes or encroachments with neighboring properties. Engage a licensed land surveyor to conduct a precise survey, providing accurate knowledge of the land’s border and ensuring a hassle-free ownership experience.
Conclusion
Purchasing land in Bali presents an incredible investment opportunity, but due diligence is paramount. By carefully considering factors such as location, legal considerations, infrastructure, zoning, land ownership, taxes, environmental aspects, building permits, and land borders, you can make informed decisions and mitigate potential risks.
However, we strongly advise to seek professional advice when considering buying a land in Bali, and the choice of an expert Real Estate agent can make all the difference. At Emas Estate, we will ensure that each and every step of the buying process checks all the boxes along with our legal partners. Let’s talk about your project !
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