Simply told, Bali is a stunning island. Two of our best friends, drawn by the waves at Echo Beach and the scuba diving in the Gili Islands, just uprooted their lives and moved out there permanently. They requested for our assistance, so we’ve been researching the whole cost of constructing a villa in Bali, which includes the price of the land, the cost of the necessary permits, the cost of the materials, and the cost of the labour.
It’s not as inexpensive as we had hoped, but considering the volume of what you’re receiving and the fact that you’re in Bali, it’s a steal. That is, if you have the resources to do so and the time to spare; in Bali, patience (known as sabar) is essentially a legal requirement.
How Much Does It Take to Construct a Balinese Villa?
The price of real estate is determined by three factors regardless of location: location, location, and location. Our friends plan to build a villa in Canggu, and we thought we’d share some of the estimated expenses with you.
Here is a simplified summary of all the costs associated with constructing a villa in Bali, from the purchase of a vacant lot all the way up to the final cost of furnishing and equipping your very own little piece of paradise.
Since it is forbidden by law for foreigners to acquire land or property in Indonesia due to a decree stating that “Indonesia’s land is a gift from God to the Indonesian people,” only Indonesian citizens are allowed to do so. Instead, signing a long-term lease is the most straightforward and typical choice.
They usually have a starting term of 25 years and cost per are (100 sq m) every year. Obtaining the haksewa, or permission to construct a house (and a pool) on the plot of land, is included in the asking price.
Prices range from $4,000 per year for a remote plot in the middle of nowhere to more than $3,000 for prime beachfront real estate. That means you may expect to spend anything from $30,000 to $250,000 or more on a 3-acre plot over a 25-year period. In case you forgot, the asking price for the Canggu land we’re considering is $1,300 per acre, annually.
Locating available land for rent is the primary challenge in Bali. Many prime places have already been taken, and even less attractive areas may be expensive. Bali’s land values continue to rise each month, even under the current Covid-19 system. Keep an eye on a few properties over a period of months to obtain a sense of the market’s fluctuations.
Isolated areas, such as NyangNyang Beach, are reasonably priced right now and might be a wise investment in the future, so they’re worth considering if you’re searching for somewhere to live away from the masses.
There is no shortage of real estate brokers on Bali who will gladly sell you a leasehold and provide you with valuable information. We found Paradise Property Group’s website, which lists a wide variety of land for sale in Bali, to be valuable when we began our own building project, so we bookmarked it and checked it regularly to see how the prices had changed. You can expect to pay a fee of up to 5 percent of the total lease price when working with a real estate broker.
Lease extensions beyond the first 25 years can be negotiated for terms up to 70 years in length. As soon as the lease expires, the land and any improvements must be returned to the owner. Also, “any upgrades” includes new construction, so you’ll essentially have to give up your villa and pool for free after 70 years. The difficulty, though, will likely arise for your grandkids.
Obtaining Necessary Authorizations
In Indonesia, a construction permit, or IMB, is required prior to ground breaking (IzinMendirikanBangunan). Remember what we mentioned about sabar: you can’t start building till you get this paperwork, and it can take anywhere from 4 to 10 months to get it.
In most cases, the construction contractor or architect will handle the paperwork and include the cost of an IMB in his Bill of Quantity, which is often in the range of $200 to $300. (BoQ). If not, choose a another service provider. We discovered some helpful suggestions at mrfixitbali in regards to the IMB construction permission, which you may find to be of interest if you’re interested in learning more.
If there are unpaid taxes on the land, then you cannot file for an IMB or any other paperwork. There’s no telling how much they could cost or if you’ll have to pay for them. If there are any delinquent payments, bringing them up in conversation with the landowner will help you negotiate a better price.
Construction Supervisors and Architects
Building a new home or villa is fraught with potential hiccups, and those problems multiply exponentially when they arise in a foreign country. Hire a seasoned local to manage construction schedules, material orders, and maintenance of all necessary contractors. An architect or building manager is often entrusted with this responsibility.
Budget an additional $15,000-$20,000 for hiring a native architect in Bali, who would likely charge 10–15 percent of the total building expenses. Unfortunately, less respected architects frequently overestimate the price of things in order to increase their own profits. Many Indonesians see nothing wrong with this, reasoning that a foreign buyer willing to spend hundreds of thousands on a home is likely quite wealthy and won’t mind foregoing a few thousand dollars here and there.