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Yes, the analysis of Bali's property market is included in our pack
Due diligence in Bali property investment involves comprehensive legal, financial, and physical verification of land ownership, title types, encumbrances, and development rights. Foreign buyers face specific restrictions and must navigate Indonesian land registry systems, building permits, zoning regulations, and various legal requirements to ensure secure ownership.
This verification process includes checking land certificates through the National Land Agency (BPN), confirming title types suitable for foreigners, investigating liens or disputes, verifying building permits, and ensuring utility access and proper boundaries are established.
If you want to go deeper, you can check our pack of documents related to the real estate market in Indonesia, based on reliable facts and data, not opinions or rumors.
Due diligence in Bali requires verifying land ownership through BPN, checking title types (Hak Milik for locals, Hak Pakai for foreigners), and confirming building permits and zoning compliance.
Foreign buyers must navigate specific ownership restrictions, verify utility connections, check for encumbrances, and ensure proper access rights before completing any property transaction.
| Due Diligence Component | Key Requirements | Typical Cost/Timeline |
|---|---|---|
| Land Registry Verification | BPN certificate check through notary | 3.5 million IDR, 5-7 business days |
| Title Type Confirmation | Verify Hak Milik/Hak Pakai/Hak Sewa status | Included in notary verification |
| Building Permits | Check IMB/PBG validity or obtain new | Several million IDR, 1-3 months |
| Zoning Verification | Confirm ITR at local planning office | Variable by regency |
| Utility Connections | Verify water, electricity, sewage, internet | Variable, higher in rural areas |
| Survey and Boundaries | Independent surveyor confirmation | Professional surveyor fees |
| Legal Disputes Check | Court and BPN dispute verification | Included in notary due diligence |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
Who legally owns the land in Bali and how can I verify that ownership through the Indonesian land registry?
Legal ownership of land in Bali is proven by a land certificate issued by the National Land Agency (BPN - Badan Pertanahan Nasional).
Verification can be done through a qualified notary or legal agent who submits a request to the BPN to officially confirm the owner, boundaries, and whether any encumbrances exist. This process takes 5-7 business days and costs approximately 3.5 million IDR as of September 2025.
The BPN maintains the official land registry database where all legitimate land ownership is recorded. Only certificates issued by BPN are legally valid for proving ownership rights in Indonesia.
Your notary will request an official certificate check that confirms the current registered owner, plot boundaries, land area measurements, and any registered liens or restrictions on the property.
Never rely on informal documents or verbal agreements when verifying land ownership in Bali.
Is the land title Hak Milik, Hak Pakai, Hak Sewa, or another type, and what does that mean for a foreign buyer?
The title type determines what ownership rights are available and which ones foreigners can legally hold.
| Title Type | Foreign Ownership Rights | Duration & Renewability |
|---|---|---|
| Hak Milik (Freehold) | Not permitted for foreigners | Permanent ownership (Indonesian citizens only) |
| Hak Pakai (Right to Use) | Yes, with residence permit (KITAS/KITAP) | Up to 80 years with extensions possible |
| Hak Sewa (Leasehold) | Yes, contractual agreement | Typically 25-30 years with renewal options |
| Hak Guna Bangunan | Yes, through PT PMA company | Building rights, not land ownership |
| Hak Guna Usaha | Limited to agricultural business use | Business cultivation rights only |
Hak Milik offers the strongest ownership rights but is exclusively available to Indonesian citizens, while Hak Pakai provides the most secure option for foreign individuals with proper residence permits.
It's something we develop in our Indonesia property pack.
Are there any liens, mortgages, or encumbrances registered against the property that could affect the sale?
The Indonesian land registry records liens (Hak Tanggungan), mortgages, and other encumbrances that must be checked through an official title search at BPN.
Your notary will conduct this verification as part of the due diligence process, which reveals outstanding debts, legal restrictions, or third-party claims that affect the property's legal transfer. Common encumbrances include bank mortgages, private loans secured against the land, government liens for unpaid taxes, and court-ordered seizures or freezes.
All registered encumbrances must be cleared before the property can legally transfer to a new owner. The seller is typically responsible for paying off mortgages and liens at closing, but this should be confirmed in writing beforehand.
Some encumbrances may not appear in BPN records if they were created through private agreements, which is why comprehensive legal due diligence beyond the registry check is essential.
Any unresolved encumbrances will block the transaction and prevent the issuance of a new land certificate in the buyer's name.
Is the zoning designation clear and does it legally allow the type of building or business activity I plan to use it for?
Land zoning in Bali is defined by the ITR (Izin Tata Ruang) system which designates what types of construction or business activities are legally permitted.
You must confirm the zoning classification at the local spatial planning office (Dinas Tata Ruang) at the regency or city level where the property is located. BPN verifications may include basic zoning information, but a separate inquiry at the planning office provides comprehensive details about permitted uses.
Common zoning categories in Bali include residential, commercial, mixed-use, agricultural, and tourism zones, each with specific restrictions on building height, density, and business activities. Some areas have additional cultural or environmental restrictions that limit development options.
Zoning violations can result in forced demolition, fines, or inability to obtain business licenses, making this verification crucial before purchase.
Always match your intended use with the exact zoning designation rather than assuming flexibility, as Indonesian authorities strictly enforce zoning compliance.
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What building permits (IMB or PBG) are already in place, and if missing, how long and how much would it cost to obtain them?
All permanent buildings in Bali require a building permit - either IMB (old system) or PBG (current system under the OSS online system).
You must verify which permits exist on the property through the local building permit office at the regency or city level. Buildings without proper permits face demolition risk and cannot be legally sold or transferred.
If permits are missing, obtaining a new PBG typically takes 1-3 months with costs ranging from several million to tens of millions of IDR depending on building size, complexity, and location. The process requires architectural drawings, structural calculations, environmental assessments, and various technical approvals.
Retroactive permits for existing buildings without proper documentation often cost significantly more and take longer to process than permits for new construction. Some older buildings may not meet current building codes and require modifications before permits can be issued.
Never assume that existing buildings have valid permits - always request official permit documentation and verify its authenticity with the issuing authority.
Are there any existing or pending disputes involving the property, the seller, or neighboring landowners that could block the transaction?
A notary's comprehensive due diligence includes checking for registered disputes, ongoing litigation, or claims involving the land, seller, or neighboring properties.
This verification covers multiple sources including BPN records, court registries, and local administrative offices to identify boundary disputes, inheritance conflicts, contractual disagreements, or criminal cases related to the property. Neighbor disputes over boundaries, access rights, or water usage are particularly common in Bali and can severely complicate or block property transfers.
Any unresolved dispute should delay the transaction until the matter is legally cleared through mediation, court proceedings, or settlement agreements. Some disputes may not be formally registered but could surface after purchase, which is why interviewing neighbors and local officials is advisable.
The seller should provide written warranties that no disputes exist and agree to resolve any that emerge before closing.
It's something we develop in our Indonesia property pack.
Is the property located within a protected area, such as a green belt, rice field (subak), or coastal setback zone, where development is restricted?
Certain areas in Bali are protected by law with strict development restrictions or complete prohibitions on construction.
Protected zones include green belt areas, subak traditional irrigation systems for rice fields, coastal setback zones (typically 100 meters from high tide), river buffer zones, and culturally significant temple areas (pura). These restrictions must be verified at the local planning office and by reviewing official spatial maps.
Properties in protected areas may have existing buildings that are grandfathered in, but new construction, renovations, or expansions could be severely limited or prohibited entirely. Some restrictions may not be clearly marked on land certificates, making separate verification essential.
Violating protected area regulations can result in forced demolition, substantial fines, and criminal charges for both owners and developers.
Always cross-reference the property location with official protected area maps before committing to purchase.
Does the property have valid access rights (right of way), and are those rights registered and recognized by law?
Valid legal access rights (Hak Akses) must be registered and clearly described in the land certificate or supporting legal documents.
The access route should be documented with specific width measurements, boundaries, and maintenance responsibilities clearly defined. Informal or verbal access agreements can be revoked at any time and are frequent sources of legal disputes in Bali.
Check that the access road connects to a public street and that all intermediate landowners have granted permanent access rights. Some properties rely on private roads that cross multiple parcels, requiring documented agreements with each landowner along the route.
Access rights should specify vehicle access, pedestrian access, utility line access, and any restrictions on use or timing.
Properties without registered access rights may become landlocked if neighboring owners decide to block informal access routes.
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Are utilities like water, electricity, sewage, and internet already connected, and if not, what are the realistic costs and timelines for connection?
Due diligence must verify existing utility connections and assess costs and timelines for any missing services.
1. **Water supply** - Check for PDAM municipal water connection or private well systems with proper permits2. **Electricity** - Verify PLN connection capacity and voltage suitable for intended use 3. **Sewage system** - Confirm connection to municipal system or proper septic system installation4. **Internet connectivity** - Check fiber optic availability and mobile signal strength5. **Gas connections** - Verify LPG delivery access or natural gas pipeline availabilityNew utility connections in rural areas can be expensive and time-consuming, sometimes taking several months and costing millions of IDR per service. Urban areas typically have better utility infrastructure but may require capacity upgrades for larger properties.
Request written estimates from each utility provider before finalizing any purchase, as connection costs can significantly impact the total investment required.
Some remote areas may have limited or unreliable utility access that affects property value and usability.
What are the notary, legal, and tax costs involved in completing the purchase, and who is responsible for paying each fee?
Property purchase costs in Bali include multiple fees and taxes that must be budgeted and allocated between buyer and seller.
| Cost Component | Rate/Amount | Responsible Party |
|---|---|---|
| Notary (PPAT) fees | 1%-2% of transaction value | Typically buyer |
| Transfer tax (BPHTB) | 5% of taxable value | Buyer |
| Seller income tax (PPh) | 2.5% of sale price | Seller |
| Land registry registration | Fixed administrative fee | Buyer |
| Due diligence checks | 3.5 million IDR + additional searches | Buyer |
| Legal representation | Variable based on complexity | Each party for their lawyer |
The buyer typically covers most transaction and notary fees, while the seller covers taxes on their capital gains from the sale.
Cost allocations can be negotiated between parties, but standard practice in Bali follows the above distribution.
How much annual property tax (PBB) will apply, and are there any unpaid property taxes that I would inherit as the new owner?
PBB (Pajak Bumi dan Bangunan) is Indonesia's annual property tax calculated on the assessed value of land and buildings.
Tax rates vary by district and property classification, typically ranging from 0.1% to 0.3% of the assessed value annually. Luxury properties and commercial properties face higher rates than basic residential properties.
The local tax office (Dispenda) determines assessed values based on land area, location, building size, and construction quality. These assessments may be significantly lower than market values but can be updated periodically.
Check for any unpaid PBB before purchase, as new owners may inherit outstanding tax debts from previous years. Notaries typically ensure all back taxes are paid at closing, but this should be explicitly confirmed.
It's something we develop in our Indonesia property pack.
Has an independent surveyor confirmed the exact boundaries and measurements of the land, and do they match the land certificate?
Independent surveyor confirmation provides essential protection against boundary disputes and measurement discrepancies.
Hire a licensed surveyor to measure the property boundaries and compare results with the measurements recorded at BPN and on the land certificate. Discrepancies between actual measurements and official records must be resolved before purchase through official boundary correction procedures.
The survey should identify boundary markers, measure all sides of the property, calculate total land area, and document any encroachments or boundary overlaps with neighboring properties. Some older certificates may have inaccurate measurements due to outdated surveying methods.
Boundary corrections through BPN can take several months and require agreement from neighboring landowners, which may complicate or delay the transaction.
Mismatched boundaries are a leading cause of post-purchase legal disputes in Bali real estate transactions.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Due diligence in Bali property investment requires systematic verification of legal ownership, title types, building permits, and utility access.
Foreign buyers must navigate specific ownership restrictions while ensuring comprehensive checks of encumbrances, disputes, and zoning compliance before completing any transaction.
Sources
- Legal Indonesia - Land Certificate Verification
- Indoned - Land Titles in Indonesia Guide
- Neginski - Foreigners Buying Property in Bali
- Bali Law Connection - Property Title Search
- Seven Stones Indonesia - Legal Process Guide
- Balitecture Realty - Property Ownership Guide
- Bali Business Consulting - Hak Pakai Guide
- Cekindo - Buying Property in Bali Essentials