Over a million Australians head to Bali for a break every year. Unsurprising then, that keeping the holiday mood alive and moving to Bali is a dream for many of us.

Whether you want hipster Canggu, spiritual Ubud or local life in Denpasar, you’ll find a place to feel at home.

If you’re thinking of buying a place to settle in Bali this guide is a great place to start. Read on for helpful hints about where to look, what you’ll pay, and how to save money on paying for your home from overseas with Wise.

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What’s the property market like in Bali?

Indonesia has seen sustained economic growth and a stable but steady increase in the cost of housing, over the past few years¹. However, local factors make a big difference, and the property market in your chosen area of Bali may not be the same as on the other side of the island - let alone in Jakarta. That’s why some local research is crucial to help you understand the property market wherever you’re thinking of buying a home².

You’ll be able to find helpful resources online, and can talk to real estate agents in the area you’re considering to build a picture of how the market there is shaping up.

Can foreigners buy property in Bali?

It is possible for foreigners to buy property in Indonesia, but there are restrictions and limits³. It’s also worth noting that you’ll likely find the market and house buying process quite different to in Australia. Don’t try to buy a property in Bali without experienced local help, including a solicitor who can help navigate the legal requirements.

In broad terms, foreigners can buy condominiums in Indonesia, but buying land is more problematic. If you’re looking to buy a freehold property you’ll need to look carefully at the options, which include buying through an Indonesian representative or company. It’s worth noting that the practise of buying through a nominee - a local representative - can cause serious legal problems, as you have little to no actual control over the property should the relationship with your chosen nominee sour.

What’s the approximate cost of different properties in Bali?

The prices of different types of property in Bali will depend on the area. You’ll need to do some local research into your options before you get too far into the process of selecting a new home.

A great way to start is to look at the data provided on Numbeo which covers cost of living including the price of accommodation. Numbeo data is live, submitted by users, and changes dynamically over time. Look online for the most up to date information for your chosen areas.

To get you started, here are the property prices in Bali overall, and specifically in the capital of Bali, Denpasar:

Price per square metre	Overall in Bali	Denpasar
City centre apartment	AUD1,202	AUD1,065
Apartment not in the city centre	AUD579	AUD678

*Data correct at time of research, 24 July 2020

How can I find a property in Bali?

Ready to get started? Here’s what you need to know about.

Property agencies and agents

Buying a property in Bali can be tricky in terms of understanding the local processes and legal framework. Do not try to navigate it alone. You’ll want an experienced realtor on side who can guide you through the journey. This will cost, but it may eventually save you a lot of money if you avoid common pitfalls and problems. Get local recommendations for agents, and be sure to check they have experience of selling to foreigners.

Avoiding scams

There are a number of common issues when buying property in Bali. Firstly, buying land as a foreigner is not easy. This can lead to nominee purchases in which a local Indonesian has their name put onto the legal paperwork for the property. Even if you think you can trust the nominee, this is fraught with issues. If the situation changes and your relationship is no longer so good, if the nominee finds themselves in debt, or if you want to sell the home, you may struggle.

A second issue is when properties are sold without proper ownership deeds. Some land in Indonesia is common owned - meaning it can not be sold. However, unscrupulous fraudsters may try to sell you land or properties which are illegal - which, again, can lead to a loss down the line.

Property websites in Bali

There’s no shortage of property agents online, which is a great place to start when you’re browsing to find a property which suits you. Here are a few to get you started:

• Bali Property
• Seven Stones
• Bali Villas and Land

How do I choose the right property?

Research is key to finding the right property on Bali for your needs.

Property types

It’s important to know that in Indonesia foreigners can not buy land, which means you’ll not be able to buy a freehold property easily. While there are some ways around this, they are all tricky and require sound legal advice.

The most straightforward way to buy a property in Bali is to go for a condominium. While foreigners buying condos is still a little bit of a legal grey area, this is far easier than trying to buy a freehold villa or land to build.

Property law changes all the time, so do check what is possible under the prevailing legislation. At the time of writing, foreigners buying a condo are likely to need to sign a convertible lease which states that the developer is obliged to pass over the deeds as soon as foreign ownership processes have become legal and full foreign ownership is possible. This has been the standard approach for some years now, and is as close to full foreign condo ownership as is currently possible.

Condition of the property

When you’re choosing a home you’ll need to check the property is in a good condition. Talk to your real estate agent about how best to arrange a property inspection and any specific issues which should be looked in to because of the location or property type.

Other things to look out for

Make sure the property you’re buying can legally be sold. Some land in Indonesia is zoned to avoid it being ever sold or built on - but that may not stop unscrupulous developers building and then selling on at a profit, before the law catches up with them⁴.

What are the steps to buying a property as a foreigner?

• Calculate your budget - you’re unlikely to get a mortgage in Indonesia as a foreigner⁶, so check if you can get a local mortgage in Australia for a foreign property if you need additional funds
• Choose a broad location and research the housing types and costs
• Find a trusted local real estate agent to help you
• Visit potential properties and choose the right one for you - pay a deposit if this is required
• Work with your agent and notary to complete checks on the property and land
• Close and complete the purchase, paying all required taxes and fees

What are the legal requirements to buying a property in Bali?

When you buy a property in Indonesia you’ll find there are a range of taxes to pay, depending on the specific purchase. Get professional advice on this, to make sure you’re paying everything that is required and you don’t get any nasty surprises.

How do I get a bank loan/mortgage?

It is not usually possible for foreigners to get a mortgage in Indonesia. You’ll likely need to fund the purchase with your own savings, or else get a mortgage in Australia and use this to pay for the property⁵.

It’s worth noting that Australian lenders are likely to require security to even consider a loan for a foreign property⁶. This could mean that you use equity in your Australian property as security for your new home. These mortgages are specialist products, so you’ll need a mortgage expert to advise you.

How do deposits, down payments, mortgages and bank loans work?

If you’re not paying for your Bali property in cash, you may need to find a specialist loan product to support your purchase.

Choosing a bank

You’re unlikely to get a loan with an Indonesian bank as a foreigner. However, you might be able to find a suitable loan product from a specialist mortgage provider in Australia. This sort of product may not have as favourable terms as you could find for a domestic home purchase, so do your research carefully to make sure you understand the way it works.

Deposits / Down payments

Depending on your specific purchase you may need to pay a deposit, and you’ll certainly need to pay fees and costs to complete your transactions. It’s worth noting that a deposit is not always required - and it’s also important to be sure your home sale is legitimate before you hand over any money. Real estate agents are not necessarily licensed or regulated in the same way as you might expect, and scams abound.

Once you’re sure of the fees and other costs you need to pay, you’ll want to find a smart way to transfer money from Australia to Bali without incurring excessive charges. That’s where Wise can help.

Wise offers convenient, low cost international payments which use the mid-market rate. That means there’s no markup added to the exchange rate used, and no hidden fees to worry about. Just quick, secure cross border payments which can cost 8x less than your normal bank.

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What kind of taxes and fees will I need to pay?

Purchasing a property is never cheap - and in Indonesia the costs are higher than in many other places. You’ll need to consider³:

• Agency/Agent fees - 5%, paid by either seller or buyer
• Transfer tax - 5%
• Land deed costs - 1%
• Notary/Lawyer fees - 0.5% - 1.5%
• Public Registration fees - 0.2%
• Transfer duty - 5%, may be paid by the seller

Don’t forget, if you’re paying your fees from your Australian bank account, you may be subject to fees and charges including extra costs as part of a marked up exchange rate. Get around this by using a payment provider which offers the mid-market exchange rate for all international transactions, such as Wise. If you are looking for a way to send money to Indonesia, Wise could be an option.

Buying a holiday home - or a permanent place to settle - in Bali is a dream for many people. It’s a big decision and it’s crucial to do your research thoroughly to make sure you don’t fall victim to scams or end up with surprise costs. When you’re thinking about how to pay for your new place, don’t forget Wise, for cheap international payments which use the mid-market exchange rate.

Sources:

1. Global Property Guide - Indonesia
2. Bali Property Market
3. Global Property Guide - Indonesia - Buying
4. Investing in Bali
5. Investing in Property
6. Buying Property Overseas

All sources accurate as of 24th July 2020