Building your dream home in Bali requires a sound understanding of the licenses and permits required in order to avoid serious legal complications. Our professional legal team will assist our clients with the application process once all architectural drawings have been completed and approved.
One of the most important permit that will need to be secured is an IMB also called Izin Mendirikan Bangunan. This will be your building permit or building registration which will give you details about the purpose of your building i.e residential or commercial according to the Indonesian law. It’s illegal to buy or rent a building without a proper IMB.
In addition to the Land Certificate, the IMB is the most important permit when it comes to properties in Bali. It is utilised though the entire building process and can be requested by the Indonesian authorities at any time. It’s the responsibility of the building’s owner to secure it. If you rent a building it’s your landlord’s responsibility but if you are the owner then the responsibility will fall upon you. It’s also important to point out that a building that is used for a purpose that is different from what is stated on the IMB is illegal so you will have to make sure that the exact use matches the purpose written on the IMB.
The first step to secure an IMB is to verify the Land Zoning of the land. This is to ensure that under the town planning regulation, the purpose of land use is permitted in that particular zone.
The following documents will be required at the Department of Town Planning and Settlements:
Land Zoning and Town Planning also called Spatial Planning are required in Bali throughout the entire island. A guideline known as The Province Regional Spatial Plan or Rencana Tata Ruang Wilayah Provinci (RTRWP) shows how lands are required to be used in Bali. The goal of spatial planning is to create towns and cities that are livable. Under this master document RTRWP, lands are allocated for specific purposes only and the types of property built on the land are controlled. This is why the IMB is so important for Spatial Planning.
Successful IMB application will be issued with a metal plate that will need to be displayed in front of your building.
At the moment the government is implementing some changes in certain areas of Bali as to how buildings need to meet certain technical standards. As a consequence they have introduced a new licensing rule called (PBG) which officially removes the status of the Building Permit (IMB) and replaces it with a Building Approval (PBG). PBG is a licensing term used to be able to build a new building or change the function and technicality of the building.
Based on these provisions, PBG is a permit granted to a building owner to build a new building, modify, expand, reduce, and/or maintain a building in accordance with the technical standards of the building.
Interested in buying land or property in Bali ? Island living will assist you with it’s professional legal team to acquire the land of your choice in order to build your dream home. However there are certain regulations in place that you must be aware of before starting any purchase to avoid bad surprises. Due diligence will be performed by our notaries to give you total peace of mind of the legality of your land.
The only way foreigners can safely invest in property or buy land in Bali is by owning an Indonesian legal entity– a PT PMA. Property owned by a foreigner may not be freehold ownership, but the Right to Build and Right to Use titles give you clear legal grounding.
Land types in Bali
You have two types of land that you can acquire in Bali – one is freehold and the other is leasehold.
A freehold land or property (Hak Milik) is when the property owner has no time limit for his ownership period. One of the options for foreigners to own a property in Bali is to do it through PT PMA, a foreign limited liability company in Indonesia and get the Right to Build license. The advantage of a freehold property is that you have complete control over it, and are not subject to any further payments, like ground rents, service charges or admin fees, which can be the case with leasehold properties.
Leasehold (Hak Sewa) means you have a lease from the freeholder (the landlord) to use the property for any number of years, up to 25 years or more. Less expensive than freehold, leasehold is a long-term lease contract. Although the land title is not under the foreigner’s name and remains under the ownership of the original owner, the land can be rented for an initial period of around 25 years and can then be extended up to a period of 70 years.