Bali Property Purchase Process – Once we have agreed on a price with the vendor, your agent generates a preliminary agreement between the parties. This is often referred to as the 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 or (English and Bahasa Indonesia) meant for you, the vendor and the agency. 

The Parties need not be present in Bali to sign this agreement; it can be scanned and emailed back and forth for countersigning. The SPA forms 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 Freehold Properties). 

The AKTA is signed at the notary’s office 30 days (+/-) after all Parties have signed the SPA and the by both parties agreed deposit (usually 10 – 25%) has been transferred. For this signing, both parties, or their representative, under Power of Attorney, must be present in Bali.

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 the due diligence to ensure that all of the taxes on the property have been paid and 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. 

The notary will also draw up the deeds in Bahasa Indonesia; and in English for an additional fee of less than $100. If you are buying a freehold property, there is a 7.5% transfer tax which is split 5%/2.5% between the buyer and the seller respectively. This tax is not applied to the actual transaction amount, but to the lowest possible amount that the notary can accept, in order to reduce the tax burden.