In good and bad, Bali has had a thriving real estate market over several decades now. This is likely to continue and it’s good to see that finally zoning regulations and build permissions are being enforced in a much better way. Our team have spent more than 20 years in the industry and collectively have more than a hundred years of experience.
First of all, it’s important to know that Seven Stones actually came out of the property industry doing projects, marketing and selling. Today we still operate in real estate but also have an advisory business. Below we take you through the various steps, all of them being important for the best possible output and purchase. We have also shared some blogs on some of the topics for you to read more about it.
The Dream
Your real estate dream starts with a dream, and that’s a process in itself. What is the dream? Lifestyle change, lifestyle only, investment, retirement or perhaps a combination of several. We can help you through this process as well. But most importantly, once that process is done we can help searching for the best possible property, whether it is a Bali villa or only land in some of Bali’s many beautiful areas. Seven Stones Indonesia has an extensive number of listings, but can also take on specific searches working with other agencies and making sure the properties you eventually short list and visit are qualified with your needs. This piece of writing might make you understand more about the journey of property and real estate business in Bali.
Due Diligence
Once a property has been identified, Seven Stones Indonesia can provide a due diligence. This is very important for many reasons. Main reasons are around zoning and places you can actually build as well as possible footprint on the land. Is the property going to be used for residential purposes or commercial use? What kind of permits will be needed to operate the property. Is there any claims on the property? Does it have any outstanding tax payments? And so on. Many law firms and notaries do a great job but too many only do a simple paper check and zoning check. This may seem sufficient and in-expensive but may (actually often) cost you a lot later. You can read further details by clicking this link about why due diligence is necessary.
Finance
Buying a property is a big investment for most people. That’s why Seven Stones Indonesia can offer finance with great rates for villas and boutique hotels in Bali. We can help with finance of up to 70% of the appraisal value of the property. Tenors can be from a few years up to 10-12 years. If you’re looking for property financing and investment, currently we are working with Briix as a fintech platform.
Legal Entity
If the idea is to commercialize the property then you would need to set up a legal entity for this. A Pty Ltd or PMA as it is called in Bali and Indonesia. This is an easy process that Seven Stones Indonesia can take you through. Even if it is for residential purposes this may still be the best option. If not, one can consider the Second Home option that Indonesia offers or a residential title such as Hak Pakai in once own name. You can find out the advantages of setting up PT PMA in this article.
Transaction Management
Once all of the above have been clarified then we get to the actual transaction that most probably started with an OTP (offer to purchase) and a deposit into escrow. The transaction will then continue into a full and formal notarial agreement regardless of this being a title purchase or a long term lease. In both cases Seven Stones Indonesia can handle the communications between buyer, seller and notary at no extra cost. Benefits would be a clear time schedule, transparency, security and pro-active communication with both buyer and seller. This link can tell you important things to know about transaction management regarding property and real estates.
Taxes and Accounting.
If the property enters into commercial activity you would need to do monthly tax reports and payments. This requires a good standard of accounting. Seven Stones Indonesia offers various packages on this and will help you minimize your tax exposure as well as ensuring you are in full compliance. A tax report would also be needed yearly for both the PMA and for the director(s), otherwise this may impact permits and eventual visa’s attached to the PMA. Learn more about Indonesia’s corporate tax here.
LKPM (investment Report)
Indonesia’s ministry of investment (BKPM) requires a quarterly investment report regardless of activities on going or not. Failure to comply with this may result in loss of your permits issues in regards to the activity of the PMA.
Visa
As part of your Bali villa investment, you may also want to take up residence in Bali and Indonesia. In any case, Seven Stones Indonesia will make sure you’re taken care of and in compliance if you chose to hold an active role in the company or just being in Bali and Indonesia enjoying your investment/lifestyle.
Architect
Building properly in Bali can be a challenge and it all starts with a good architect. An architect that understands the extreme wind, rain and sun we see in our tropical paradise. It’s also important to understand that Bali has specific design aspects set in law and these need to be understood. So also in terms of build permits (PBG) and permits of use (SLF). Seven Stones Indonesia has worked with many architects and recommend several local talents to help you design your dream villa or boutique resort specific to your liking.
PBG/SLF (Build and Usage Permits for Properties)
Over the recent few years, Indonesia has streamlined its business regulations. So also on building permits (PBG) and usage permits (SLF). A build permit should be in place prior to construction and any recommendations that this is not necessary need to be treated carefully. Recent changes in zoning regulations and density of build in each area are also a lot stricter. You may end up with a yearly penalty tax at the best or in worst case scenario denied permits and possible demolition. Seven Stones Indonesia works closely with the government to make sure you are all in compliance and obtain the right type of build and usage permits. Still curious about Indonesia’s PBG/SLF permit? This Seven Stones’ blog post can provide you the details.
Construction.
There are many great construction companies out there, but prices and quality may differ widely and a full understanding of what you get in terms of specifications on material is very important. A strong agreement with the construction company is important as well as clear time frames of build and delivery. Seven Stones Indonesia can provide you with management of construction and also help you source good and reliable construction companies to work with.
Sales & Marketing.
You may be building just for your own purpose for now, or you may build to sell. In any case Seven Stones Indonesia came from real estate brokerage and have an extensive network combined with a high level of integrity to help you sell and market your properties. You can read a few important points about simple step-by-step regarding sale and rent through this link. In addition to our own web page and social media reach, we work with several other great web pages for a wider reach such as
Management
As we are writing this, Seven Stones Indonesia is in the process of launching a villa and property management company together with Briix who offer a state of the art tech system together with property finance. We are aiming at developing a fee structure that maximizes your returns combined with an extensive knowledge and high level of quality services to ensure the best possible experience for your clients. In general, be in compliance and be good. As emphasized in this article, why it is important to play by the book when it comes to law and regulations.
