North Bali Real Estate
A Helpful Guide to Investing In North Bali Real Estate

 

North Bali Real Estate

Franklin D. Roosevelt said “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” So the importance of investing in real estate cannot be over emphasized.

When an island is likened to heaven, it intrigues me and triggers my curiosity to know about it more. This is the case with north Bali in Indonesia. Its friendly weather, hospitality culture of the people, comfortable homes by the sea and in the mountains have made this island a  destination for holiday makers and an irresistible investment opportunity for people interested in real estate.

The North Bali Real Estate market is increasingly attracting business moguls that are interested in taking advantage of the real estate portfolio that it is offering. So if you are looking to buy a home or invest in the property market in Bali and you are afraid of the restrictions the Indonesian law will pose to you, worry no more because we will guide you towards achieving your objective.

North Bali Real Estate – How You Can Buy a Property in Bali

There is no doubt that the Indonesian government has put some laws in place to restrict foreigners from overtaking their property market and to encourage and grow indigenous ownership. However, there are some legal steps one can take to procure property in Bali when vacant land for sale call is up.

The three essential laws that guide real estate in Indonesia are as follows:

• The right to build – Hak Guna Bangunan
• The Right to use – Hak Pakai
• The right to own – Hak Milik

North Bali Real Estate – Leasehold Agreement (long term renting)

Foreigners can buy or invest in properties in Bali through a leasehold agreement under Hak Pakai (right to use) as far as the property is not subsidized by government.  This could be a long time lease under the name of the original owner of the property; which can last for a tenor of 25 years and can be extended to 75 years. Under this contract the property can be sub leased (rented) to others. However, if the lease expires, all rights return to the original owner as Hak Malik.

North Bali Real Estate – Leasehold (mortgage investment structure)

Another way for a non-indigene to buy a property is a combination of the above lease agreement and a first registered mortgage supported by several documents including Business Partner Agreement and Irrevocable Power of Attorney, Deed of Lease in Notarial Form, Testamentary Wills, and Deed of Lease in Notarial Form.

The high return on investment and capital gains has caused increase in price for property in Bali but its reputation as a safe nest for luxurious homes has kept demands rolling in. This island offers variety of choice to investors, depending on your budget.  Many people are going into undeveloped places as it is the tradition of expansion and growth in real estate business.

Now that you know that you can buy property and you understand how to invest in real estate in Bali, the next thing is to engage an agent to search for your preferred type of property, negotiate price, deposit an agreed percentage of the amount, sign a letter of intent with the owner accepting the final amount, sign the power of Attorney agreement, collect a revised certificate and pay the notary of the property price. Hurray the property is yours.

There are also indications that the Indonesian government are beginning to relax their laws on foreigners owning property in other to encourage development. This is an signal that the market will open up more. So you can take the ‘early advantage’ to invest now and grow your investment over time. This has been a proven success formula in real estate business.

About The Author Of This Article

Rachel Stinson has always had a knack for writing, food, fashion, home improvement and sports. Blogging has combined all four for her with an added bonus of enthusiastic audiences. She expertly analyzes real estates, restaurant and online packaging stores Dignam.com with respect to pricing and people involved and can express her opinions in an unhesitant, engaging manner for all matters.

 

Main Article: North Bali Real Estate

Looking to purchase a beautiful sea view Villa in North Bali?

Looking for a beautiful North Bali Villa to rent for your next holiday?

Bali villa rental business
Unlicensed villa operations in Bali

Now more than ever it is critically important to make sure your villa has the correct paperwork and your paying local taxes if you want to operate a villa rental business in Bali.

Authorities on Bali island are intensifying the search for unlicensed accommodations operating businesses in the regency. This includes hostels, home stays, hotels as well as rented houses and villas according to Bali Tribun (Bali villa rental business).

The main reasons for these recent crackdowns are to ensure operators comply with laws and regulations, which are in place to protect communities and employees working in the hospitality industry, and to clamp down on tax avoidance.

Villas with a maximum of 5-bedrooms located in designated tourism zones can apply for something called a Pondok Wisata license, which allows them to run a tourism-based daily rental business. Those located in residential zones can apply for a Rumah Kos (Guest House) license, which allows for a maximum of 10 rooms available for rent.

In both cases licenses must be under the name of the legal landlord or a company director if the property is owned by a legitimate business entity and a local tax ID has to be registered.

AirDNA, the data and insight window for Airbnb have 28,672 active villa rentals in Bali with an average occupancy of 53%. While the platform does not indicate how many of these have the correct licenses or how many of them are complying with tax regulations, what is clear is that a significant amount of money is exchanging hands.

In November 2017, the UK’s Daily Telegraph reported that Bali is the most lucrative destination for Airbnb operators worldwide where the average revenue per user is USD 44,000. One such operator, apparently managing 504 properties, was raking in over USD 16.5 million a year, they said.

Giri Prasta, Regent of Badung told Bali Tribun (Bali villa rental business) that so far data has been collected and recorded from 62 villages and 554 Banjars in the regency.

Every Balinese village is divided into one or more Banjars, which are cooperative community associations of neighbours, and they are all cooperating with the drive to meet the island’s tax targets. Chairman of Badung Parliament, Putu Parwata also says he is supporting the Regent’s efforts to clamp down on illegal tourist accommodations in Badung say Bali Tribun.

Villas owned by foreigners are under particular scrutiny. Giri said he was aware of many foreign owned villas that were using the names of local “nominees” on land certificates to avoid the restrictions in place on foreigners owning freehold land and property in Indonesia. Doing this is illegal and so is avoiding paying tax.

Technical teams have already been established to check paperwork and compliance and to provide warnings if they find violations. If no action is taken by villa owners to acquire the correct licenses or pay their taxes after three warnings their business will be closed says Giri.

Bali villa rental business – Sources: Bali Tribun, Telegraph UK, AirDNA

Main Article: Bali villa rental business

Looking to purchase a beautiful sea view Villa in North Bali?

Looking for a beautiful North Bali Villa to rent for your next holiday?