Buying well in Bali

A villa purchase in Bali above US$500,000 is a sequence of decisions, most of them taken before a price is agreed. The title you can lawfully hold comes first, the checks belong to your own notary and lawyer, and the taxes depend on who is selling and what is being transferred.

Every serious purchase in Bali begins with the same question, which title the buyer can lawfully hold. For a foreign buyer the answer is never Hak Milik. What remains is a choice between a right of use, a company that holds a right to build, and a lease, each with its own terms and obligations.

At the top of the Bali market, the house is usually the easy part to judge. The difficulty lies underneath it, in a certificate, a zoning designation, a building approval and, for a lease, a contract. Each is checked by the buyer's own notary and lawyer, and each has failed someone in the past two years.

Buying a villa before it is finished means buying a set of permits, a contract and a builder's promise, with the house to follow. At the top of the Bali market the drawings are rarely the problem. The approvals, the payment schedule and the wording of the agreement decide how the purchase ends.

Estate land in Bali is valued on view and frontage, but it is bought on zoning, access and the paper behind the boundary. A beautiful parcel can carry a green designation, a setback that swallows the best of the view, or a lane that belongs to a neighbour. Those questions come before any conversation about the house.

Most owners at this level spend only part of the year in Bali. The house runs in their absence, the paperwork follows them home, and the choice to let it to guests brings a licensing chain and a tax position of its own. Each is easier to settle before handover than after it.