New luxury complex of villas and apartments "SUOM"

Bali is one of the most visited islands in the world, and several times rewarded by Tripadvisor as one of the best places in the world. More than 12 mill. people are visiting Bali every year. The demand for properties and land in Bali is increasing and more than 350.000 westerners are every year looking for a place to live. Investing in a villa in Bali is a great combination between an investment with a very high return combined with a possibility of having a vacation home.

A non-Indonesian citizen cannot own land in Indonesia. However, a foreigner can acquire a leasehold title (Hak Sewa) to a land and building for a defined period of time. This title can be held in your own personal name and is 100% legal and protected by the Indonesian law. You can only lease properties for 25-30 years and the extension is possible for another 25-30 years.

Hak Sewa or the leasehold title gives the holder the right of use for an empty plot of land or the building(s) on someone else’s land for a fixed period of time. A Leasehold Right title can be granted over land currently held under a Freehold title (Hak Milik), Right to Build title (HGB) or Right to Use title (Hak Pakai). Indonesian individuals, Indonesian legal entities and foreign individuals and legal entities may acquire Leasehold (Hak Sewa) properties. The period of lease is generally between 1 to 25 years and usually there is an option to extend the lease, which is specified in the agreement between the land owner (Lessor) and the who rents the property (Lessee) Hak Sewa cannot be used in the form of a mortgage, nor can it be registered with the National Land Agency. Subject to the conditions of a lease contract (lease deed), a foreigner may lease an empty plot of land, build permanent buildings on the land and resell the remaining balance of the lease term to any third party by way of a sub-lease or transfer of Leasehold Right. Commercial leases of office space, factory buildings, restaurants, hotels, shops and the lease of residential premises are all examples of Hak Sewa titles. Residential properties can include apartments, condominiums, villas and houses.

Hak Milik or Freehold is the strongest form of land title ownership in Indonesia. Only individuals of Indonesian Nationality can own land under the Hak Milik title. Consequently, neither limited liability companies (PT/Perusahaan Terbatas) nor foreign individuals may obtain land with a Hak Milik title. Subject to zoning restrictions, the Hak Milik title owner can use the land for any purpose, although it does not entitle the owner to exploit the natural resources found on or under the land. The title has no limit and may be sold, gifted, exchanged, handed down by a will and may also be used in the form of a mortgage. Foreigners may, however, acquire land under a Hak Milik title in another form of entitlement called Hak Pakai or Right of use.

For a Freehold property transaction (Hak Milik) The buyer: Land and building acquisition duty (BPHTB) = 5% of NJOP value (government assessment) The seller: PPh income tax = 2.5% of NJOP (government assessment) For a Leasehold property transaction (Hak Sewa) The buyer: no Tax implications The seller: final income tax of 10% (Indonesian nationals or KITAS / KITAP holders) and 20% (foreigners without KITAS / KITAP)