05 · 3 min path
The money
Payment schedule, escrow, currency, and the costs nobody mentions until the notary appointment.
The price is not the price
Budget eight to fifteen per cent on top of the headline figure before you own anything. Where you land in that range depends almost entirely on the structure you chose at stage two, which is why the two decisions have to be made together.
On an acquisition of title – HGB through a PT PMA, or Hak Pakai – BPHTB is the big line: an acquisition duty on land and buildings at five per cent of the acquisition value, paid by the buyer, above a tax-free threshold that is set regionally and differs between regencies. Then notary and conveyancing at around one per cent, independent legal and title diligence at USD 2,000 to 4,000, and company formation at USD 4,000 to 6,000 if you are incorporating.
On a lease there is no BPHTB, because you are acquiring no title. There is instead a ten per cent final tax on the rent. That is legally the landowner's liability and most Bali lease contracts pass it to the tenant. If yours is silent on it, assume you are paying it.
Then furnishing. Off-plan handovers are almost never complete, and a unit that will be let has to be furnished to the standard the nightly rate assumes. Six to ten per cent of the purchase price is realistic, and it is the line most often missing from the model.
The payment schedule
Milestone payments are standard, and they are where your leverage sits. Three things worth insisting on:
- Payments against verified milestones, not dates. Thirty per cent on completion of structure is a term. Thirty per cent in April is a loan.
- Somebody independent verifying the milestone. A developer confirming their own progress is not verification.
- A retention. Five to ten per cent held until snagging is closed, not released at handover. Without it, the last defects get fixed at your expense or not at all.
Currency
You will pay in a mix of USD and IDR across eighteen to thirty months. That is a real exposure, not a rounding error: a ten per cent move on a USD 400,000 purchase is USD 40,000, which is the entire furnishing budget. Ask which payments are denominated in which currency and whether the contract fixes a rate at all. Many do not, and at the prevailing rate on the day is a risk you are carrying for free.
The number to finish with
Not the price. The all-in: price, every transaction cost, furnishing, and the first year of running costs before it earns anything. Then the annual run-rate underneath it – service charge, maintenance and sinking fund, licences, land and building tax, insurance, and company compliance if you incorporated. Two to four per cent of the purchase price a year is normal, and it is owed whether or not anybody stays.
A developer who will produce that whole sheet without being pushed is a developer who has done this before.
Written by us · 3 min read · stage 5 of 9