International Real Estate


For Sale in … Indonesia

Taken From : The New York Times

This three-bedroom villa in Bali is less than a year old and has many traditional Balinese features.

THREE-BEDROOM VILLA IN BALI

$695,000

The house, overlooking rice fields and distant volcanoes, is in a small village, a few minutes’ drive from Canggu beach. Bars and restaurants in Seminyak, a suburb of Kuta popular with expatriates, are 15 minutes away. Bali is one of thousands of islands in the Indonesian archipelago. Situated between the islands of Java and Lombok, it is known for its surfing beaches and rice terraces climbing the sides of volcanoes. The Balinese people are primarily Hindu, and the island has many temples and shrines.

The villa is less than a year old and has many traditional Balinese features. The main living areas are open to the outside. The kitchen, living room and dining room extend under a large covered terrace at the center of the house. The floors are of concrete tile made in Yogyakarta, a Javanese artisan city. Most of the woodwork in the house is teak.

All three bedrooms have en-suite bathrooms and can be closed up and air-conditioned. The master suite takes up the entire second floor, with a bathroom, a walk-in closet and a private balcony.

Outside, a row of coconut palms divides the property from rice fields. The property’s saltwater pool is next to the bale, a traditional small house used for napping in the afternoon or relaxing with drinks in the evening. A water tower beside the house holds water pumped from the ground for washing (most foreigners in Bali drink bottled water). The house is a 45-minute drive from the airport.

MARKET OVERVIEW

Prices for vacation homes are up 20 percent as of Sept. 2008, over the same period last year, and occupancy rates are up in the island’s five-star hotels and vacation rentals, according to Fakky Hidayat, head of consultancy and research for Knight Frank / PT. Willson Properti Advisindo in Jakarta. He says vacation homes in Bali are less expensive than similar homes in Thailand. A typical vacation home in Bali costs anywhere from $850,000 to $3.5 million, while prices in Thailand can reach $7 million.

WHO BUYS IN BALI

Many buyers come from Australia, France and Italy, as well as the Middle East, according to Matthew Georgeson, partner and director of sales with Elite Havens Group, a real estate firm specializing in sales and rentals of luxury villa. In the past several months, Mr. Georgeson said, the United States lifted its travel advisory, which had cautioned Americans about the dangers of traveling in Indonesia. As a result, he has seen increased interest from American developers and buyers.

Mr. Hidayat said that in the coming months, he expected the troubled American banking industry to have a major impact on Bali’s real estate market.

BUYING BASICS

Foreigners in Indonesia cannot own land outright, but they can lease land from an Indonesian landowner. A typical lease length is 25 years, Mr. Georgeson said. Generally, a potential buyer finds a “freehold property,” for which an Indonesian acts as a nominee and holds the title. At the same time, a right-of-use certificate from the government is issued to the foreign buyer. This certificate allows the foreigner to sell the right to the land without getting permission from the nominee (though the certificate must be updated every 25 years). Mr. Georgeson recommends that his clients use a professional nominee from a notary’s office.

Transaction costs — 1 percent for the notary, $1,500 for a title search and $2,000 to $3,000 in legal fees — usually make up about 3 percent of the purchase price, according to Mr. Georgeson.

Buyers pay a tax when they transfer the freehold certificate into their name. Taxes are 5 percent of the assessed value of the property. A property of this size, Mr. Georgeson said, would probably have a transfer tax of at least $2,000, but not more than $5,000. In addition, the seller pays the real estate agent’s commission, which is usually 5 percent of the purchase price.

Luxury property in Bali is almost always priced in United States dollars.

USEFUL WEB SITES

Official Web site of Bali: www.baliprov.go.id

United States Bureau of Consular Affairs: www.travel.state.gov

Statistics Indonesia: www.bps.go.id

LANGUAGES AND CURRENCY

Indonesian, Balinese; Rupiah ($1 = 9,696 rupiahs)

TAXES AND FEES

Local land taxes are quite low, usually only $200 to $300 a year. Staff wages make up the bulk of the running costs of owning a villa in Bali. A villa of this size usually has a staff of four people, according to Mr. Georgeson. Their wages run $600 to $700 a month, total.

CONTACT

Matthew Georgeson, Elite Havens Group (62) 361 738747, www.elitehavenssales.com

2 Responses to “International Real Estate”

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    thank you.

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