Eyecon Group

In Bali, the primary difference between freehold and leasehold land in ownership and tenure:

• Freehold Land (Hak Milik): This is the highest form of land ownership in Indonesia, where the owner has full rights over the land indefinitely. However, only Indonesian citizens can hold freehold title. Foreigners are not allowed to directly own freehold land in Bali.

• Leasehold Land (Hak Sewa): Leasehold land involves renting the land for a specified period, typically between 25 to 99 years. Foreigners can legally lease land under a leasehold agreement. At the end of the lease term, the land reverts to the original owner unless the lease is renewed.

In summary, freehold provides permanent ownership, but it’s restricted to Indonesian citizens, while leasehold offers long-term access to land for foreigners without ownership rights.

In Indonesia, land size is commonly measured using a unit called “ARE.” One ARE is equivalent to 100 square meters (10 meters by 10 meters). This unit is often used to describe smaller plots of land. For example, a property listed as “5 ARE” would be 500 square meters in size. It’s a widely used and recognized unit of measurement in Bali and across Indonesia when dealing with real estate and land transactions.

Yes, foreigners can invest in Bali’s real estate market, but there are specific regulations they must follow. Foreigners cannot directly own freehold land in Indonesia, including Bali. However, they can invest through legal structures such as leasehold agreements, which allow them to lease land for up to 99 years. Another option is to establish a foreign-owned company (PMA), which can hold land under a right-to-build (Hak Guna Bangunan) title.

At Eyecon Group, we assist with every aspect of developing and owning real estate in Bali. This includes helping with legal documentations, setting up necessary legal structures, and ensuring that all requirements are met for a smooth and compliant investment process. Our team of experts is here to guide you every step of the way, making your real estate investment as seamless as possible.

In Bali, notary fees for property transactions typically range between 1% to 2.5% of the property’s purchase price. The notary plays a crucial role in overseeing the legal process, ensuring all documents are correctly drafted and signed. The exact fee can vary depending on the complexity if the transaction, the notary’s experience, and the value of the property. It’s essential to discuss and agree on the notary fee upfront. Eyecon Group can assist you in working with a trusted notary to ensure a smooth transaction.

As a foreigner, there are several important legal and administrative steps you must follow to lease your property in Bali and generate rental income:

1. Leasehold Ownership:
   Ensure your property is legally held under a leasehold structure. Foreigners cannot directly freehold land in Bali, but with a leasehold agreement, you can lease the land for a set period (usually 25 to 99 years). This is the foundation for legally operating your property.

2. Pondok Wisata Licence (Rental Licence):
   To legally rent your villa for short-term stays, you will need to obtain a Pondok Wisata licence, which is specifically for properties intended for tourism accommodation. This license allows you to rent the property out on platforms like Airbnb and Booking.com. you must ensure the property is in a designated tourism zone and meets local requirements for operating as a rental.

3. Tax Compliance:
   Rental income in Indonesia is subject to taxation. As a property owner, you will need to register with local tax authorities and file the necessary paperwork to declare rental income. You must also comply with local income tax and VAT (Value Added Tax) regulations.

4. Property Management & Maintenance:
   Managing the day-to-day operations of rental property requires maintaining the property, handling guest bookings, and ensuring compliance with local rules.

At Eyecon Group, we handle every step of this process. From setting up your leasehold agreement and obtaining the required Pondok Wisata licence to managing your tax compliance, we ensure all legalities are covered so you can lease your property without any worries. We also offer comprehensive rental management services, taking care of everything from marketing your villa, handling guest bookings, maintaining the property, and ensuring smooth operations. This way, you can focus on receiving income while we manage the technicalities of your investment.

In Bali, land is divided into specific zoning classifications that dictate what types of developments are allowed. Each zone is represented by a different colour on zoning maps:

1. Residential Zoning (Perumahan) – Yellow:
   This zone is intended for residential developments, including homes and villas. Land in yellow zones is ideal for private residence and long-term rentals.

2. Tourism Zoning (Pariwisata) – Pink:
   Pink zones are designated for tourism-related developments such as hotels, resorts, and short-term rental villas. This zoning allows you to apply for a Pondok Wisata license for vacation rentals.

3. Agricultural Zoning (Pertanian) – Green:
   Green zones are reserved for agricultural activities like farming. Building homes or villas is generally restricted in these areas unless special permits are acquired, or zoning is changed.

4. Commercial Zoning (Perdagangan) – Red:
   Red zones are for commercial use, allowing for businesses like shops, offices, and restaurants. If you’re planning a commercial project, this zoning is necessary.

Understanding these zoning categories and their corresponding colours is essential for legally developing land in Bali. Eyecon Group will help you navigate zoning regulations to ensure your project is following local laws and suited to your needs.