Buying real estate is no small thing to do. Regardless of the type of real estate, there are processes and rules which must be respected, and about which we ordinary citizens know very little. If you are buying a property and you want to make money from it by renting it out, then an attractive location is the first thing you need to think about.
If you buy real estate in a foreign country, for example in Bali, things become a little more complicated. The law that must obey in Bali is the law of Indonesia, and for the common layman, it can be a nightmare. If you don’t have knowledgeable or don’t want to hire a lawyer for this job, from a great real estate idea on this one fantastic place you can very easily get only a bunch of problems.
Before you blindly go after your dream, we suggest that you do some research. You must be familiar with all the facts and potential obstacles. This isn’t either a little simple process and it is of great importance that you connect with the right team that already knows this topic. Accordingly, in this text, we will list 4 pitfalls to avoid when buying Real Estate in Bali to help you out.
1. Purchase of land without a land certificate
This is a huge mistake! Throughout Indonesia, certain legal rules apply when it comes to shopping a real estate. Here land certificates are something you need to start with. Therefore, the land you are buying must have a certificate. In certain areas of Indonesia, there are still properties that do not have these certificates. Buying such a property can be high risk and cost you a lot.
On the other hand, all restrictions are clearly defined on these documents following the Indonesian ones by law. All lands, that is, all land guarantee, are not fully available to foreigners. Yes, this is the part that surely interests you. These certificates can limit you in what you can do and for how long to work with your property. In some parts of Bali, the property cannot be sold permanently but only for 100 years, in others, you are restricted to not being able to build or change the appearance.
Also, this document determines the value, height, and purpose of the building that you plan to build in the given territory. It is important to know that not all certificates are available to foreigners. So if you want to own a piece of land in beautiful Bali, here are two types of certificates that might interest you as a foreigner when buying land in this country:
Hak Guna Bangunan
This certificate gives you the right to build. If you are a foreign investor and want to transfer part of your company to Bali, keep your attention here. Having this certificate gives you the right to use the property for business purposes
Hak Pakai
If you want to have a piece of land in Bali that you will enjoy with your family, this certificate is right for you. It gives you the right to use the land as a foreign citizen.
2. Access roads around the property are not important to you
Another mistake that can cost you dearly. Don’t be fooled if you see a very low price. She’s not that short for no reason. Open your four eyes and take a good look at what you get for a certain amount of money. The price can be your first alarm that something is wrong. The first thing in your mind should be checking the road that connects your desired country with the main roads.
Probably some of you thought: well if there is no direct road, I will make one to a nearby property. Watch out! this can be a double-edged trap. If you decide on this move, know that it will cost you twice as much. This means that they would have to buy your neighbor’s land to build a road to the nearest road. In some cases, this process is significantly more expensive than the initial land purchase.
3. Non-distinction between ITR and zoning aspect
When you have already decided to buy land in a foreign country, it is clear to you that there are probably different laws than the ones you are used to. You have to pay special attention to every detail, including when it comes to Tata Ruangan (ITR) and land aspects.
Not distinguishing these two terms can cost you time and money. The biggest difference between these two items is the answer to the question of whether the building permit applies to one plot or a larger area. What will be better for you depends on your set goals.
ITR or popularly called zoning refers to a large area and it will affect the requirements for issuing building permits. The regulations differ from the zone where your desired land is located. Under the zones, there may be different construction restrictions, for example, construction is not allowed in the green zone, and so if you did not inquire about zoning beforehand and wanted a place for yourself, you have fallen into a trap. Unlike ITR, the land aspect refers to one parcel.
In order to be more informed about Bali real estate and make the right choice in this segment as well, we advise you to consult with https://www.penidaland.com/pages/investing-in-bali-real-estate.
4. Not checking the taxes before buying
You are no stranger to paying taxes when buying land. This is a practice in every country, even in Bali. However, here you are not exempt from the aforementioned payments, neither if you are a buyer nor a seller. Indonesian laws apply to both buying and selling. With the buyer, this tax is 5%, with the seller it is halved and requires a payment of 2.5%. So be careful and take into account how much money you invest.
All the pitfalls we talked about in this text, although there are many more, you can easily avoid. Before buying land, ask yourself about the laws considered buying a real estate in Indonesia, the certificates you must have and the fees without which you would not be able to move forward.
If you are not sure whether you have studied everything in the right way, there are always consulting real estate agencies, such as the one mentioned in the text, which can draw your attention to important items without taking additional time and fearing whether you have done everything correctly. We wish you luck in your search and land purchase in this wonderful place.
Rhydian Choi 
Kim Marks