A dream island… but a market that must be understood before buying
Buying a villa in Bali can seem like an accessible dream: idyllic climate, attractive rental yields, favorable tax conditions… But behind this postcard image, there are also legal grey areas, unclear practices, and sometimes real scams.
Every year, foreign investors lose tens of thousands of dollars — not because of the property itself, but because of a lack of preparation, verification, or proper guidance.
Here’s a clear and complete checklist of the most common pitfalls in Bali real estate — and how to avoid them.
1. Understand the difference between “Freehold” and “Leasehold”
It’s the foundation — and many get it wrong
In Indonesia, foreigners cannot legally own land in Freehold (Hak Milik).
However, they can purchase property under:
Leasehold: a 25- to 30-year lease, often renewable (sometimes up to 90 years)
A foreign-owned company (PT PMA), with strict legal structure and usage
🚩 If someone offers to sell you “Freehold” under your personal name — it’s illegal. Walk away.
2. Always go through an independent notary
Don’t rely solely on the seller… or their “recommended notary”
A local notary is required to validate the sale, but some work closely with agencies or developers.
✅ Be sure to:
Choose an independent notary, ideally recommended by a legal firm or trusted investor
Have them verify land certificates and ownership rights
Request a fully translated bilingual contract (English–Indonesian) before signing anything
💡 A good notary costs around 1% of the sale price. A legal mistake can cost you the entire investment.
3. Verify the seller’s identity and all legal documents
Identity fraud and double-selling happen in Bali
Before any payment:
Request a copy of the SHM or SHGB (land certificate)
Ensure the name exactly matches the seller’s ID
Ask to see original documents, not just phone pictures
Check that the land is free from debt, dispute, or mortgage (verified at the BPN Land Office)
🛑 Many scams start with a “seller” who doesn’t legally own the land.
4. Never sign or transfer funds without full due diligence
No “quick deals,” no pressure
Some pushy agents will ask you to:
sign a draft agreement without review,
pay a deposit without valid documents,
“reserve the land” with no legal commitment
✅ You should always complete full due diligence before signing or paying anything:
Legal background check by a notary or real estate lawyer
Physical site inspection and boundary check
Permit validation (IMB or PBG — local building permit)
Verification of access roads and servitudes
🔍 If it looks too good to be true, it probably is.
5. Use a PT PMA structure if you want stronger legal standing
For serious, long-term investment
If you plan to:
make multiple acquisitions
operate commercial rentals legally
resell the property later with more options
… the best solution is to create a foreign-owned Indonesian company (PT PMA)
This allows:
ownership of property under Hak Guna Bangunan (right to build)
legal operation and rental income
easier contract execution and resale
📌 Note: This requires a clear business plan, local office, capital, and accounting.
6. Work only with qualified and verified professionals
Your team is your best protection
Many “brokers” in Bali operate without licenses or legal protection — they work purely on commission.
To secure your project:
Hire a real estate lawyer fluent in English or French
Use an independent notary with strong references
Partner with a professional inspection team
Work with a legit property management company for rentals
🌐 At Gravity Bali, we only work with licensed, insured, and vetted professionals.
Real case: how an investor almost lost $50,000
In 2022, a Belgian client contacted us after transferring $50,000 to a “land seller” in Bali for a Freehold plot.
Turns out, the person had no legal claim to the land.
With the help of a local lawyer, we managed to stop further damage, but the money was never recovered.
👉 Today, this same client bought a fully compliant Leasehold villa through our network — and it’s generating strong returns.
Conclusion: yes, Bali is an opportunity — if you’re properly guided
Bali is full of potential, but also full of pitfalls for the unprepared.
By following these steps and working only with qualified professionals, you’ll transform a risky purchase into a solid, profitable investment.
