Key Sale Terms
Hak Milik (Freehold): Exclusive to Indonesian citizens, this title grants indefinite ownership rights. Foreigners cannot directly own freehold property in Indonesia​​.
Hak Pakai (Right to Use): Allows foreigners to lease property for up to 25 years, extendable for another 20 years and then a further 25 years. This title is obtained for properties with a minimum government-set value​​.
Hak Guna Bangunan (Right to Build): Available to foreigners through a PT PMA company, this title permits building on the land for up to 30 years, with extension options​​.
Hak Sewa (Leasehold): Permits foreigners to lease a property for up to 25 years, with extension options depending on the contract​​.
IMB (Building Permit): Required for constructing any property, ensuring adherence to local regulations and approved architectural plans​​.
Pondok Wisata (Guest House License): Necessary for legally operating a rental business, valid for up to five years with extension options​​.
PT PMA Company: A foreign-owned limited liability company necessary for foreigners to conduct business and purchase property in Bali legally and safely​​.
Legal Implications
Understanding the legal implications of each term is essential. For instance, not complying with the proper land title can lead to legal issues or even property confiscation. Similarly, operating a vacation rental without a Pondok Wisata license can result in fines or closure​​.
Negotiation Strategies
Conduct Thorough Due Diligence: Engage a reputable local property lawyer or notary to help investigate the property’s legal status, ownership history, and any potential issues​​.
Verify Land Certificates and Permits: Ensure all documents, such as land certificates and building permits, are up-to-date and properly registered​​.
Understand Zoning Regulations: Familiarize yourself with local zoning laws to ensure the property’s use aligns with these regulations​​.
Professional Property Inspection: Hire a property inspector to assess the property’s condition and structural integrity​​.
Negotiate Terms and Conditions: Based on your due diligence findings, negotiate the sale terms, including price adjustments for any discovered defects or legal issues​​.
Legal Documents and Expert Legal Commentary
Legal documents are the backbone of property transactions in Bali. Ensure all contracts are reviewed by a legal expert specializing in Indonesian property law. Their commentary can provide insights into navigating the complex legal landscape and offer advice on compliance and risk mitigation​​.
Glossary of Terms
A glossary of Bali property sale terms is vital for understanding the market. This includes terminologies like “Hak Milik”, “Hak Pakai”, and others, each with specific legal implications and requirements​​.
