Using legal loopholes to buy property in Indonesia is risky for foreigners, especially after a government crackdown on such practices. 

If there’s one thing that’s certain about a foreigner buying property in Bali right now, it is that their position is very uncertain. 

It is against Indonesian law for foreigners to own land, but that hasn’t stopped Australians and many other nationalities finding ways around the rules, lured by the dream of living in a tropical paradise where a fabulous lifestyle can be purchased for a fraction of the price it is at home. 

The most common way has been to use a nominee: an Indonesian citizen who “owns” the land on behalf of the foreigner, but through a legal agreement that allows the foreigner to control what that “owner” can do with the property.   

If there’s one thing that’s certain about a foreigner buying property in Bali right now, it is that their position is very uncertain. 

It is against Indonesian law for foreigners to own land, but that hasn’t stopped Australians and many other nationalities finding ways around the rules, lured by the dream of living in a tropical paradise where a fabulous lifestyle can be purchased for a fraction of the price it is at home. 

The most common way has been to use a nominee: an Indonesian citizen who “owns” the land on behalf of the foreigner, but through a legal agreement that allows the foreigner to control what that “owner” can do with the property.  

But there’s trouble in paradise. 

In March, Agrarian Affairs Minister Ferry Mursyidan Balda announced an inventory of foreign land ownership, warning a lot of Bali and Lombok was illegally owned by foreigners.  

The announcement has worried expats and generated speculation that land could be confiscated by the state or agreements used by foreigners to control land declared invalid, resulting in a windfall for Indonesian nominees.     

If there’s one thing that’s certain about a foreigner buying property in Bali right now, it is that their position is very uncertain. 

It is against Indonesian law for foreigners to own land, but that hasn’t stopped Australians and many other nationalities finding ways around the rules, lured by the dream of living in a tropical paradise where a fabulous lifestyle can be purchased for a fraction of the price it is at home. 

The most common way has been to use a nominee: an Indonesian citizen who “owns” the land on behalf of the foreigner, but through a legal agreement that allows the foreigner to control what that “owner” can do with the property.   

But there’s trouble in paradise. 

In March, Agrarian Affairs Minister Ferry Mursyidan Balda announced an inventory of foreign land ownership, warning a lot of Bali and Lombok was illegally owned by foreigners.  

The announcement has worried expats and generated speculation that land could be confiscated by the state or agreements used by foreigners to control land declared invalid, resulting in a windfall for Indonesian nominees.     

Perth woman Jacki Farrar is one Australian waiting to see what happens. She is building a three-bedroom three-bathroom house with staff quarters on a pretty block overlooking the tiered rice fields near the arts hub of Ubud. 

She and her husband want the house ready in April next year when he retires. To secure their 1200-square-metre piece of paradise, they had two options. The first was to lease the land for an indefinite period. However, at the end of the lease, everything on the land, retirement home included, would revert to the leasee. The other option, and the one they selected, was to buy the land freehold using an Indonesian nominee with whom they have a separate agreement, naming Farrar and her husband as the “rightful owner” and the Indonesian nominee the “legal owner”, who must follow their instructions regarding the land. 

“But I believe at the moment President Widod is trying to stop this,” Farrar said. 

“There’s a good chance it will be changed and then we’ll have to lease our land back. 

“At the moment, we are not saying or doing anything, and hoping it just goes away. 

“Clearly, we’d rather own it than lease it, because we can then pass it on to our children.”  

Even before the March crackdown, the use of nominees was frowned upon by Indonesian authorities and fraught with danger for foreign buyers.  

Susi Johnston’s case is a well-documented example. The nominee she and her late husband used to buy their Canggu property claimed she had been his mistress and she was awarded ownership by the district court.   

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