The Process 2020

The “How To” Guide to a Successful Property Transaction in Bali

The Acquisition Process is as follows:

Each transaction is just a little bit different from the last one, but every successful transaction follows a certain path that is quite simple, however it is likely to be different from what you are used to in your home country. What follows is a brief outline laying out how Bali Nirmana Property typically helps our investors go from “How do I do this?” to “Congratulations, here are your keys.”

Once we have agreed on a price between the vendor and the buyer, if the property is a leasehold, I generate a Sale and Purchase Agreement (SPA) which spells out the Parties, the Property, the Price, the Payment Terms and the Penalties for non-performance. This is an internal document in English (and sometimes in Bahasa Indonesia as well) meant for the buyer, the vendor and the agents. The Parties need not be present in Bali to sign this agreement; it can be scanned and emailed back and forth for countersigning.

If the property is a Hak Milik, HGB or Hak Pakai then we follow the principle of the “5 P’s” mentioned above and the notary will draft the preliminary binding agreement (PPJB), and a translation into English will be provided. The Indonesian version is signed in the presence of a notary here in Bali by both PTarties.

The SPA/PPJB form the basis of the AKTA SEWA MENYEWA which is the official lease transfer deed (for Leasehold Properties) or the AKTA JUAL BELI which is the official Buy/Sell Agreement (for Hak Milik/Freehold Properties). The AKTA (Agreement) is signed at the notary’s office 30 days (+/-) after all Parties have signed the SPA, the deposit (10%) has been transferred to the trust account of the appointed notary and due diligence on the property has been satisfactorily completed. For the signing of the AKTA, both Parties or their representatives, under a limited Power of Attorney, must be present in Bali. Only Indonesian citizens can accept POA to sign the Akta on behalf of either Party for the transfer of a Hak Milik property, while foreigners and Indonesian citizens alike can hold POA for the transfer of a Hak Sewa property. POA can also be assigned for the purpose of signing management agreements as well.


As the buyer of a leasehold property, you have only one mandatory expense above and beyond the purchase price; that is the 1% of your purchase price fee for the notary to conduct due diligence to ensure that all of the taxes on the property have been paid, that the licenses are current, that the underlying ownership title has not been used to collateralize another investment and that you have clear and unencumbered access from a public road to the boundary of your property. In the event that you are not familiar with any particular notary, we are happy to recommend one that we have used over the years. He of course will also draw up the deeds in Bahasa Indonesian – and in English for an additional fee of around $100 – for your review prior to signing. This process can take place while you are in Bali or while you are back home.

If you are buying a Hak Milik/freehold property, you will pay the aforementioned 1% to the notary and there is a 7.5% transfer tax on the transaction that is shared between the buyer and the seller; 5% for the buyer and 2.5% for the seller.

If you are buying a leasehold property, the tax burden is on the account of the seller.

Your deposit is fully refundable in the event that your notary discovers a legal impediment to your purchase; at your instruction the deposit will be refunded to you within three working days as per the SPA/PPJB.

The signing of the AKTA at the notary’s’ office requires at least one person from the buying party to be present, or they can provide a Power of Attorney Agreement to someone here in Bali to sign on their behalf. A dual language, sworn translation Surat Kuasa (Power of Attorney Agreement) is provided for the assigning party. That POA can be notarized in your home country and sent to Bali for countersigning and witnessing in front of your notary. It’s that easy.

After the signing of the Notorial Akta, the Final Payment is generally transferred directly to the seller. The property becomes yours once the seller has confirmed to all Parties, including the notary, that they have received the Final Payment. Upon notification of the successful transfer, the notary releases the notarized deed to the new buyer.


N.B. One of the great misconceptions in our industry stems from the use of the word “Freehold”. There simply is no translation for the word into Bahasa Indonesia. For a complete glossary of common terms and vocabulary used in the property sector in Bali, click here or go to the News and Advice link on our website.

Hak Milik is the designation under Indonesian law that most closely resembles what those of us from abroad would call ‘Freehold’, however only Indonesian citizens can hold Hak Milik titles. Foreign investors can search the web and shop for properties marketed as Hak Milik. In the event that the foreigner finds a Hak Milik property he/she wants, negotiates the fair selling price and the property passes due diligence, a foreigner can buy a property that is marketed as Hak Milik/Freehold. You heard that correctly. A foreigner can shop for and buy a property that is being marketed as Hak Milik. The difference between the title that the local person holds upon successful purchase, and the title that you might hold as a foreigner, is only manifested in the paperwork. The features and benefits of true ownership can be held by the foreigner in two ways; under his/her own name using the Hak Pakai title, or under the name of his/her. so while the name of the title may be different from the one that Wayan has, the capital appreciation, flexible usage and the ability to pass the asset onto the beneficiaries is very much solidly and legally in place.

On a leasehold transaction we can act as your Power of Attorney – or we can organize appointing on that you choose – so that you do not need to fly back to Bali to sign the Transfer Agreement. For the transfer of a freehold property, Power of Attorney can only be granted to an Indonesian citizen, which we can easily arrange on your behalf.

After settlement, the notary will keep the original Transfer Agreements in his safe, awaiting your instruction to either send to you by courier, or to hold onto them until such time that you return.

To learn more about how a foreigner can acquire property that is marketed as ‘Freehold’ or how we calculate capital appreciation on a leasehold investment with options to extend the lease term, visit Bali Nirmana Property’s News & Advice pages and click on the topics that catch your attention.

Or, contact Patrick on WA & Handphone on +62 817 973 3031 or by email at [email protected]