Freehold and Leasehold: peculiarities of real estate ownership in Indonesia

When considering buying real estate in Indonesia, including the Bali region, it is important to understand the differences between freehold and leasehold ownership. These concepts are not only relevant to Bali, but are also relevant to other regions of Indonesia as well as many other countries where there is a real estate market.

Freehold: Absolute Ownership

Freehold, or full ownership, gives buyers in Bali and other regions of Indonesia absolute rights to own, use and sell real estate. This represents the most preferred option for those seeking a stable real estate investment in Indonesia.

Advantages of Freehold Ownership

Absolute ownership provides stability and long-term investment.
Freehold purchasers have the right to transfer their property to their heirs.
The lack of tenure restrictions allows owners to freely dispose of their property.

Disadvantages of Freehold Ownership

High prices: freehold properties in Bali are often more expensive than leasehold options.
Purchase Restrictions: there are restrictions on the purchase of freehold real estate for foreigners in Indonesia.

Leasehold: Rental Property

On the other hand, leasehold is a form of leasehold where the buyer is given the right to lease a plot of land for a certain period of time. It is important to note that with leasehold, it is the land plot that is leased and what is on it is owned by the buyer.

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This type of ownership is also applicable both in Bali and other regions of Indonesia, as well as in many other countries with a developed real estate market.

Benefits of Leasehold Ownership

More affordable prices: leasehold properties in Bali are often more affordable for buyers, especially foreigners.
Flexibility: some leasehold agreements may provide an option to extend the lease term.
Investment Opportunity: buying leasehold property in Bali can provide investment opportunities with the right approach.

Disadvantages of Leasehold Ownership

Term Limitations: a limited lease term can create uncertainty and requires further consideration when making a decision.
It is not always possible to transfer rights to heirs: in some cases, the leasehold right may be restricted from passing to heirs.

Conclusion

The choice between freehold and leasehold ownership of real estate in Indonesia depends on your specific needs, goals and financial capacity of each buyer. It is important to realize that the decision to choose between freehold and leasehold should be made by the buyer himself/herself, taking into account all factors. Professional real estate agents can assist in this process by providing information, advice and assistance in selecting the most suitable option.

Thus, when buying real estate in Bali or elsewhere in Indonesia, it is important to consider all aspects of freehold and leasehold ownership, and consult with experts to make an informed choice that suits your needs and goals. Whether it is a stable investment or a unique investment opportunity, choosing the right form of real estate ownership can help you gain a new level of comfort and confidence in your investment in Indonesia.