Bali has long been a popular vacation destination known for its beautiful beaches, lush rainforests, and rich culture.
In recent years, the Indonesian island has become especially popular with digital nomads and those looking to escape city life. More and more foreigners are interested in owning property in Bali, either for investment purposes or to call home.
Data from Indonesian-based real-estate platform Rumah123 showed that demand for properties by foreign citizens in Bali’s Badung Regency has increased by 92.1% compared to 2022, per the daily business paper Bisnis Indonesia. The Bandung Regency includes tourist spots like Seminyak, Canggu, and Uluwatu.
“Growth of foreigners’ demand in properties in 2023 has seen rapid development compared to 2022. The potential for the foreign market is expected to further accelerate growth and advancement of this industry in 2024,” Marisa Jaya, head of research at Rumah123, told the outlet.
Business Insider spoke to Nathan Ryan, a real-estate agent, about three things people should know before building a house in Bali. Ryan cofounded Bali Realty with his wife in 2009. He has spent the past 15 years working in the island’s real estate market.
1. Prepare for chaotic paperwork — and ask for lots of documentation
Prepare for some level of paperwork chaos in Bali. Information is not always documented properly and can cause a headache for foreign buyers, Ryan said.
Since foreigners can’t own land titles in Bali, those who want to buy land in Bali typically do so on a leasehold basis. These leases range from 25 to 30 years, and they can be renewed.
When buying a leasehold property, buyers should engage a notary or lawyer to check that the land title is clear, current, and real, Ryan told BI.
The buyer should ask the seller for documents detailing the history of the land all the way back to the original landowner.
“You might be the third or fourth buyer, and if someone hadn’t previously paid the taxes, the government could come after you for those taxes,” Ryan continued.
2. Make sure the street leading to your plot has a name
When looking for leasehold property in Bali, make sure there’s a public road leading to it.
“There have been times when property has been locked in, because it might look like there’s a road there to the land you’re looking at. However, that road could be on land that belongs to someone else,” Ryan said.
If the street doesn’t have a name, you might be in for trouble. There have been cases of properties being built on land without registered roads or laneway access.
“There could be a road there when you went and looked at the land,” he continued. “But if you look it up on Google, it won’t have a name, which means that someone owns it.”
3. You might not want to live in the same place you vacation
“If you can get a yearly rental, test an area first before you commit to buying,” Ryan said. “Just because you’ve holidayed in Seminyak might not mean that you want to live in Seminyak.”
Being close to popular places in Bali, like Canggu, can mean getting caught in traffic, especially during rush hour, which is something to consider when picking a spot to build a home.
“Traffic’s a headache, and you have to plan your day around it,” he added. “It’s like in any big city, where you have to plan what you’re doing and work your day out.”
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