What are the main steps in buying a property in Nicaragua?
When purchasing a property in Nicaragua you will need the services of a qualified attorney. You cannot purchase property without the assistance of a attorney. This document explains the tasks that will be performed by your attorney during the purchasing process.
Step 1: Legal due diligence
Once the agreement to buy has been made and you have signed the contract of sale, the
process of legal due diligence will begin and your attorney will check the following:
- Escritura (or Title Deed). This document should be in the name of the current owner of the property and be duly registered. Any irregularities with this document can point up areas for the lawyer to check in more depth;
- Libertad de Gravaman (or Free of Lien). This document shows if the property has any issues that might prevent or affect a legal sale of the property (such as previous promises of sale, mortgages, pending legal cases etc.);
- Solvencia Municipal. This document shows the state of taxes on the property and lets the lawyer know whether all taxes have been paid up to date;
- Any additional terms and conditions of the contract of sale.
Step 2: Closing
Once your attorney has checked these papers and assuming that the property has been
cleared for sale a number of further steps will be taken:
- A new Escritura (or Title Deed) will be drawn up by your lawyer showing you as the new owner.
- The seller of the property and the buyer of the property (or person with power of attorney for either party) will sign the new Escritura, witnessed by your lawyer.
- At the same time the funds for the purchase of the property will be transferred from the buyer to the seller.
Step 3: Post closing
Following the closing your attorney will take the necessary steps to have the property
registered in your name. The Cadastral Office (which holds the land plans) will evaluate
the property to come up with the 'assessed value'.
- 1% of this value is payable to the D.G.I. (Revenue Office). This is referred to as the Transfer Tax and transfers the property to your name.
- 0.5% of this value is payable to the Public Registry. This is referred to as the Registration Fee and ensures that the property is registered in your name. On noncommercial real estate purchases the 0.5% fee is usually capped at $350. In addition there is a small administration charge.
- If purchasing in San Juan del Sur or the Tola area, a municipal tax of 1% is payable to the Alcadia (the local government). This is referred to as the IMI tax.
|
|
Learn about the real estate hot spots. | |
| Understand how tourism is influencing real estate. | ||
| Find value packed investment opportunities. | ||
| Understand the purchasing process for Nicaraguan property. | ||