Question 1

What is off-plan project? What are benefits of it?

Accepted Answer

An off-plan villa project refers to a real estate development where villas are offered for sale before they are constructed or completed. In other words, buyers purchase the property based on architectural plans, designs, and other project specifications provided by the developer, without the physical structure being already built.

Lower Initial Cost:
Off-plan properties are often priced lower than completed properties, offering a cost-effective entry point into the real estate market.

Potential for Price Appreciation:
Historical data shows that properties bought off-plan may appreciate in value as construction progresses, providing potential capital gains.

Flexible Payment Plans:
Many off-plan projects offer flexible payment schedules, allowing buyers to spread payments over the construction period for increased financial flexibility.

Locking in at Current Market Prices:
Purchasing off-plan allows buyers to secure a property at current market prices, potentially benefiting from future increases in property values.

Newer Building Standards:
Off-plan properties are typically constructed using the latest building standards and technologies, ensuring modern amenities, energy efficiency, and overall quality.

Early Access to Desirable Locations:
Off-plan projects often emerge in upcoming or sought-after locations, giving buyers the opportunity to secure property in areas with potential for growth and development.

Developer Reputation:
Choosing a reputable developer with a history of successful projects can provide buyers with confidence in the reliability and quality of their investment.

Potential for Rental Income:
Investors may benefit from off-plan purchases by entering the rental market early, potentially earning income as soon as construction is completed.

Question 2

How can I stay informed about the developments and status of my villa?

Accepted Answer

You will receive regular WhatsApp updates on a monthly basis, providing you with visuals and progress reports about your villa.

Question 3

Leasehold or freehold - who owns the villa?

Accepted Answer

One frequently asked question pertains to the limitations foreigners may encounter when it comes to owning property in Bali. There are, in fact, two primary methods for foreign individuals to obtain property in Bali:

Leasehold: In this approach, you obtain land for a specified duration (e.g., 20, 30, or 50 years) from a local landowner. Throughout this period, you enjoy complete rights to the land. Our recommendation often favors Leasehold due to its lower risk and cost-effectiveness. In our contracts, we consistently incorporate a guaranteed extension provision. This allows you to prolong your tenure if you decide to retain the property for a period beyond the initially agreed duration. Additionally, working with leasehold properties tends to facilitate resale, as the leasehold market is larger than the freehold market.

Freehold: Through the creation of a local company (PT PMA), you have the opportunity to acquire land from a local resident. This process typically involves a more extended and costlier procedure, with the land's price being notably higher. However, the advantage is perpetual ownership, requiring only the renewal of your HGB license every 25 years.

Question 4

Can I resell my villa?

Accepted Answer

Certainly! You have complete freedom to make choices with your villa. Given the flourishing Bali villa market, the possibility of selling or even gifting your villa is entirely viable.

Question 5

If there are delays in construction?

Accepted Answer

The construction agreement includes a predetermined completion date as specified in the notarized document. If this deadline is not met, we commit to compensating you with daily penalty fees, which will be deducted from your final payment.

Question 6

What services are included in Airbnb management?

Accepted Answer

The management team takes care of everything from guest communications and staff coordination to villa maintenance, ensuring seamless operations. This approach allows you the option to be hands-off in the day-to-day management of your villa while still enjoying a consistent cash flow.

Question 7

Can I insure my villa?

Accepted Answer

Yes. Although some local homeowners may forgo insurance, there are available options with companies such as ALLIANZ. This coverage can extend to natural events like earthquakes or flooding.

Question 8

How are the payment terms structured for an off-plan project?

Accepted Answer

Payment terms for off-plan villas in Bali can differ based on the developer and specific project. However, common terms typically include:
Reservation Deposit:
A modest deposit, often around 10%, is required to secure the villa.

Down Payment:
A percentage of the total purchase price serves as the down payment.

Progress Payments:
Additional payments are made during various construction milestones.

Final Payment:
The remaining balance becomes due upon the completion of construction and the transfer of ownership.

It's crucial to note that these terms may vary, necessitating a thorough review of the sales and purchase agreement for precise details before committing to an off-plan villa purchase in Bali.

Question 9

Which is more suitable: purchasing under my personal name or through a business entity?

Accepted Answer

here are two options:
Personal Ownership:
You can own a property without a company. If you generate income, using an AirBnB management company for tax and financial management is an option. However, for compliance, it's recommended to open a PT PMA.
PT PMA Ownership:
This is a more secure business approach in Bali, ensuring legal compliance. Our legal team can assist in establishing your company, optimizing taxes, and handling necessary reporting.

Question 10

How will owning property in Bali impact the taxes in my home country?

Accepted Answer

We advise seeking guidance from a local tax expert to explore any bilateral tax agreements between your home country and Indonesia.

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