Required Certifications for a Secure Bali Purchase

Published on October 29, 2025 and written by Cyril Jarnias

Buying Property in Bali: Mandatory Certifications

When it comes to buying property in Bali, it’s crucial to navigate the maze of local regulations to ensure a secure investment. With a rapidly expanding real estate market, Bali attracts many international buyers, making knowledge of mandatory certifications essential.

Whether purchasing land, a villa, or an apartment, understanding the required documents can save you many headaches. Certifications such as:

• The Sertifikat Hak Milik, which establishes Indonesian ownership rights
• The Sertifikat Hak Guna Bangunan, related to building usage rights

are imperative steps to ensure every transaction is conducted legally.

Essential Certificates for Secure Property Purchase in Bali

For a secure property purchase in Bali, it’s imperative to verify the presence and authenticity of several essential certificates. These documents protect the buyer against land disputes and ensure the transaction’s legality.

Specific Types of Required Certificates

• Sertifikat Hak Milik (SHM): Certificate of Ownership Title
  This document certifies that the seller is the legal owner of the property. It represents the highest level of land rights for Indonesians. Foreigners cannot directly hold an SHM but must ensure the seller possesses this title when acquiring property through a local company or lease.
• Hak Guna Bangunan (HGB): Building Usage Rights
  Primarily used by foreign investment companies (PT PMA), this certificate allows land possession and development for a specified period, with extension possibilities.
• Hak Pakai: Right to Use
  Available to foreigners holding a KITAS or KITAP, it allows property acquisition under strict conditions (pre-built property, minimum value).
• IMB (Izin Mendirikan Bangunan): Building Permit
  Certifies that construction complies with local urban planning and technical standards.
• Zoning Certificate / Rencana Tata Ruang Wilayah (RTRW)
  Determines the legal land designation according to local urban planning.

Summary Table of Main Certificates

Certificate	Main Description	Primary Recipient
SHM	Full ownership title	Indonesian citizens
HGB	Rights for commercial building/land use	PT PMA Companies
Hak Pakai	Limited rights for foreigners	Foreigners with KITAS/KITAP
IMB	Permit authorizing construction	Property owners/lessors
RTRW/Zoning	Legal land designation	Property owners

Certificate Acquisition Process

1. Verification with the National Land Agency (BPN – Badan Pertanahan Nasional)
   The BPN is responsible for:
   – Issuing and validating land titles like SHM or HGB.
   – Verifying no mortgages or disputes exist on the concerned plot.
2. Application to Local Authorities
   To obtain an IMB or consult zoning:
   – Contact the local urban planning service or regional/regency government.
   – Provide technical plans, environmental studies if necessary.
3. Notary Validation
   A certified notary must authenticate all documents before final signing to:
   – Confirm their validity,
   – Guarantee compliance with local laws,
   – Reduce any subsequent legal risk.

Importance in the Balinese Legal Context

The different types of land titles are crucial because they precisely determine who can claim what type of rights on a given plot. They also constitute undeniable proof in any future legal challenge.

Strict compliance with local zoning protects against future risks related to arbitrary changes in permitted uses; this particularly prevents your investment from being challenged by an unexpected subsequent administrative decision concerning its actual designation as officially recorded when you made your property acquisition here!

Finally, having properly obtained all these documents makes it possible to subsequently apply for temporary or even permanent residence visas through local immigration services after proving possession of the appropriate title…

Practical Tips for Verifying Document Authenticity

• Systematically request certified true copies of each document attached to the transactional file;
• Verify directly with competent institutions such as the corresponding provincial/regional BPN office where the asset is located;
• Engage specialized professionals to conduct exhaustive historical cadastral due diligence before any financial commitment;
• Use recognized third-party service platforms conducting comprehensive documentation audits including any potential judicial history associated with visible properties;
• Require proof of current annual tax payments settled without delay or apparent disputes related to land and associated constructions;

These precautions drastically limit fraudulent risks inherent in sometimes opaque real estate markets in highly sought-after international tourist areas!

Property Title Verification in Bali: A Crucial Step

The property title verification process in Bali is a crucial step for securing property purchase and avoiding legal or financial risks. This procedure, often called due diligence, aims to ensure the seller legally holds the property and that no disputes or encumbrances burden the property.

Essential Verification Steps

• Verify the seller’s identity and legal capacity to sell (name must match the official certificate).
• Examine the Sertifikat Hak Milik (SHM), the main document proving full ownership of land or house.
• Check other possible certificates according to transaction type: Sertifikat Hak Guna Bangunan (HGB) for a company, Hak Sewa (lease) for long-term rental contracts.
• Ensure the land complies with local zoning rules through consultation with local PUPR.
• Request the IMB (Izin Mendirikan Bangunan), an essential permit if you’re buying a built property.
• Have all these documents verified by an authorized local notary (PPAT), who will also conduct searches regarding potential mortgages, liens, or ongoing disputes.
• Physically verify that the actual area matches that mentioned in the titles.

Involved Local Authorities

Authority	Role
Notary/PPAT	Document authentication and title control
BPN	National Land Agency – land registration
PUPR	Zoning allocation and verification
Local Administration	IMB permit issuance

Documents Required During Transaction

• Sertifikat Hak Milik / HGB / Hak Sewa
• Seller’s Indonesian national identity card
• Proof of no debts/mortgages
• IMB if construction present
• Recent tax documents related to land/property

Potential Risks of Unverified Title

A purchase without rigorous verification exposes the buyer to the following risks:

• Land disputes with unidentified heirs or third parties claiming their rights
• Subsequent discovery of a mortgage burdening the purchased property
• Future legal impossibility to resell or develop the property due to administrative non-compliance

Example: Several buyers reported discovering after purchase that their “villa” was built on land still burdened by bank debt contracted by the previous owner. The financial institution then claimed its due in court against the poorly informed new owner.

Practical Tips to Avoid Problems

• Always consult an independent notary from initial discussions with the seller;
• Demand presentation of original official titles;
• Never sign or pay anything before complete validation by your local legal counsel;
• Conduct a search with BPN to detect any ongoing disputes;
• Prefer acquisition through a PT PMA company if you’re a foreigner wishing to directly control your real estate investment;

⚠️ An unauthenticated title can lead to outright cancellation of your purchase without possible compensation. Document vigilance is therefore essential!

Mandatory Inspections for Property Purchase in Indonesia

In Indonesia, and more specifically in Bali, property purchase doesn’t come with the same strict regulatory framework as in France or other Western countries regarding mandatory property inspections. However, certain checks are recommended and some technical documents are legally required to secure the transaction.

Summary Table of Inspections and Technical Documents Related to Property Purchase in Bali

Inspection / Document	Legal Requirement	Detail / Purpose
SLF (Sertifikat Laik Fungsi)	Mandatory	Certificate of compliance attesting the building is fit for use
PBG Indonesia	Mandatory	Building permit replacing IMB since 2021
Electrical Inspection	Recommended	Verifies electrical installation safety
Sanitation Check	Recommended	Condition of wastewater drainage systems
Termite/Pest Inspection	Not mandatory but advised	Checks for termites or other wood pests

Important Points on Regulatory Obligations:

• SLF (Sertifikat Laik Fungsi): This official certificate attests that the property complies with current standards and can legally be occupied. It concerns all completed constructions; it must therefore be part of the file during a purchase.
• PBG Indonesia: The “Persetujuan Bangunan Gedung” now replaces the IMB permit. It’s the legal permit essential for any new construction or major modification.
• Electrical, sanitation inspections, and pest controls (particularly termites) are not imposed by specific national regulations for each private residential real estate sale, but their absence strongly exposes the buyer.

Practical Implications for Buyers

Purchasing without conducting these checks carries several risks:

• Subsequent discovery of serious hidden defects (defective installations non-compliant with local standards)
• No guarantee on healthiness or structural safety
• Difficulties in case of future resale if certain certificates are missing

Practical Tips to Ensure Secure Purchase:

• Systematically demand presentation of SLF and PBG certificates during any preliminary agreement or final deed
• Have a complete inspection conducted by a licensed local engineer concerning:
  • The building’s general condition
  • Electrical installation
  • Sanitation networks
  • Potential presence of wood-eating pests like termites
• Contact exclusively:
  • Specialized firms certified by Indonesian authorities
  • An experienced local notary who perfectly masters Balinese procedures

Checklist of Recommended Procedures:

Before Final Signing

• Complete legal verification with a local specialized lawyer (“due diligence”)
• Formal request to seller for certified true copies of SLF + PBG
• Commission from a recognized professional in Indonesia:
  • General technical inspection
  • Written report on electricity/plumbing/sanitation/pests

To guarantee a smooth acquisition, it’s recommended for foreign buyers—often unfamiliar with the Indonesian regulatory context—to systematically go through a reputable local agency as well as an independent notary capable of supervising all these steps.

Rigorous application of these tips not only avoids any future disputes but also ensures your investment is fully valued in total respect of the Indonesian legal framework.