F.A.Q. (Frequently Asked Questions): What Documents Are Required for Foreigners to Purchase a Villa in Bali?
Bali, with its stunning landscapes, vibrant culture, and booming tourism industry, has long been a favorite destination for foreign investors and expatriates looking to buy property. If you're a foreigner interested in purchasing a villa in Bali, it's important to understand the necessary legal requirements and documentation to ensure a smooth transaction. In this article, we will outline the key documents required for foreigners to buy a villa in Bali.
1. Valid Passport
The most basic and essential document for any foreigner looking to purchase property in Bali is a valid passport. This serves as proof of your identity and nationality. Make sure your passport has at least 6 months of validity remaining before you proceed with any legal or property transactions.
2. KITAS or KITAP (Temporary or Permanent Stay Permit)
Foreigners who wish to purchase property in Bali must hold a KITAS (Kartu Izin Tinggal Terbatas) or KITAP (Kartu Izin Tinggal Tetap). These are Indonesian temporary and permanent residence permits, respectively. A KITAS is required if you're staying in Indonesia for more than 6 months but less than 5 years, and a KITAP is necessary for those with permanent residency status.
- KITAS: For foreigners staying in Indonesia on a temporary basis.
- KITAP: For foreigners who have obtained permanent residency.
Having one of these permits allows you to legally reside in Indonesia and proceed with property ownership arrangements under specific conditions.
3. NPWP (Taxpayer Identification Number)
Every individual, including foreigners, who engages in financial transactions in Indonesia, including property purchases, is required to obtain a NPWP (Nomor Pokok Wajib Pajak), which is the Indonesian Taxpayer Identification Number. You can apply for an NPWP at the local tax office. This number is crucial for tax reporting, particularly if you plan to rent out the property or sell it later on.
4. Power of Attorney (if applicable)
If you are not in Indonesia or cannot be present during the property transaction, you may need to grant a Power of Attorney (Surat Kuasa) to a trusted representative, such as a lawyer or notary, to handle the paperwork and property registration on your behalf. This document should be notarized and legally binding in order to authorize the agent to act on your behalf in legal matters regarding the purchase.
5. Deed of Sale and Purchase (Akta Jual Beli)
Once the price and terms are agreed upon, both the buyer and seller will sign a Deed of Sale and Purchase (Akta Jual Beli). This document, prepared by a notary, outlines the details of the property sale, including the price, conditions, and the parties involved. For foreigners, the notary will ensure that the sale complies with Indonesian law, especially regarding the type of property title you can hold.
6. Proof of Ownership of the Property (Sertifikat Tanah)
Before purchasing, it’s essential to verify the property title certificate (Sertifikat Tanah). In Indonesia, there are several types of land titles, but foreigners can only acquire property through long-term leasehold agreements or other specific legal structures (such as through a local company or under a Hak Pakai title). A valid certificate must be presented to confirm the land’s legal status and ownership.
7. Building Permit (IMB - Izin Mendirikan Bangunan)
If you plan to build on the property or make significant modifications, you will need an IMB (Izin Mendirikan Bangunan), or Building Permit. This permit is issued by the local government and ensures that your construction complies with zoning laws, environmental regulations, and other building codes in Bali.
8. Bank Account in Indonesia
Foreigners purchasing property in Bali need to open an Indonesian bank account to facilitate financial transactions related to the property purchase. This account is required for the transfer of funds and to pay any taxes, fees, or maintenance costs associated with owning a property in Bali.
9. Company Registration Documents (for Foreigners Buying via PT PMA)
If you're a foreigner wishing to purchase property in Bali through a PT PMA (Perseroan Terbatas Penanaman Modal Asing), a foreign investment company, you will need to provide additional documents related to the company registration. These include:
- Articles of Association (Anggaran Dasar)
- Business licenses (Surat Izin Usaha)
- Shareholder agreements
- NPWP for the company
This structure allows foreigners to own property under a leasehold or certain rights, but not under Hak Milik (freehold).
10. Local Notary’s Services
A notary (Pejabat Pembuat Akta Tanah) is an essential part of the property-buying process in Bali. The notary will prepare, validate, and ensure that all documents, including the Deed of Sale and Purchase, are legally sound and compliant with Indonesian laws. Notaries will also assist in the transfer of property titles and registration with the land office.
11. Tax and Other Financial Documents
You will also need to ensure that any taxes or fees related to the transaction are properly accounted for. These could include:
- Pajak Penghasilan (PPh): Income tax on the sale of property, typically paid by the seller.
- Pajak Pertambahan Nilai (PPN): Value-added tax on new property sales.
- BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan): The acquisition tax on land and property, usually paid by the buyer.
Ensure that all tax obligations are fulfilled to avoid legal complications.
Conclusion
Purchasing a villa in Bali as a foreigner involves various legal requirements and documentation. It's essential to understand the necessary steps, from obtaining a KITAS or KITAP to securing an NPWP and ensuring proper property title certificates are in order. Working with an experienced notary and legal team can help streamline the process and ensure that you comply with all Indonesian property laws.
By gathering the necessary documents and understanding the legal landscape, foreigners can successfully navigate the process of purchasing a villa in Bali and enjoy their investment in this tropical paradise.
