Purchase and sale of real estate in El Salvador. (F.a.q.)
We receive many questions daily about different doubts about investing in El Salvador in real estate, and that is why we bring this publication with all the information that a foreigner, a national residing abroad or even a national needs to know about the acquisition of real estate in the country. In addition, there are many more questions that arise in the process of buying and selling properties which throughout our experience we have compiled and we will try to mention below.
Can a foreigner buy real estate in El Salvador?
We start by mentioning that any national or foreign person has the right to acquire property in El Salvador, this is very important to clarify since many countries prohibit a foreigner from owning real estate, or in some countries that allow it, they are under different or special requirements . In the case of El Salvador, any national and foreign person has the same rights and obligations when acquiring real estate.
The only detail to take into account is that owning a property does not mean that a foreigner can already have a permanent residence in the country, immigration procedures are separate and owning a property is not necessarily a cause of acquiring one. residence visa and much less a requirement, in the same way a residence visa with a work permit, these are separate procedures that will need different legal advice.
We start by mentioning that any national or foreign person has the right to acquire property in El Salvador, this is very important to clarify since many countries prohibit a foreigner from owning real estate, or in some countries that allow it, they are under different or special requirements . In the case of El Salvador, any national and foreign person has the same rights and obligations when acquiring real estate.
The only detail to take into account is that owning a property does not mean that a foreigner can already have a permanent residence in the country, immigration procedures are separate and owning a property is not necessarily a cause of acquiring one. residence visa and much less a requirement, in the same way a residence visa with a work permit, these are separate procedures that will need different legal advice.
What are the requirements as a foreigner to acquire a property in El Salvador?
The requirements for any national or foreign person are relatively the same. Have a valid identification document, in the case of nationals it is the DUI or Unique Identification Document, and for foreigners it would be the valid passport, then the NIT is needed, which is the tax Identification number.
The requirements for any national or foreign person are relatively the same. Have a valid identification document, in the case of nationals it is the DUI or Unique Identification Document, and for foreigners it would be the valid passport, then the NIT is needed, which is the tax Identification number.
How to acquire the NIT?
Every national or foreigner has the right to acquire a tax identification number, and this only requires the identification document and pay the corresponding fee, this procedure is carried out at the Ministry of Finance and is extremely easy, simple, fast and very low cost. By having the document, you only have to present, pay the fee or the right of the document and in a few minutes the document is extended.
Every national or foreigner has the right to acquire a tax identification number, and this only requires the identification document and pay the corresponding fee, this procedure is carried out at the Ministry of Finance and is extremely easy, simple, fast and very low cost. By having the document, you only have to present, pay the fee or the right of the document and in a few minutes the document is extended.
What is the process of buying and selling real estate?
The sale purchase in theory is relatively simple, but depending on many subjective variants many times entail difficulties that we will be able to expose later, but to make a basic summary about the purchase and sale process we can say that it is only necessary to carry out the contract by means of A notary public deed, this contract is taken to the CNR national registry where taxes and registration fees are paid and then in about 3 months the deed is finally fully registered. But the ownership of the property is transferred at the time of signing the contract.
The sale purchase in theory is relatively simple, but depending on many subjective variants many times entail difficulties that we will be able to expose later, but to make a basic summary about the purchase and sale process we can say that it is only necessary to carry out the contract by means of A notary public deed, this contract is taken to the CNR national registry where taxes and registration fees are paid and then in about 3 months the deed is finally fully registered. But the ownership of the property is transferred at the time of signing the contract.
What problems should be taken care of at the time of the real estate purchase process?
Initially clarify that it is very important to hire a notary lawyer to accompany the entire process, it is important that the lawyer and notary is hired above all by the buyer, the lawyer will be the one who must take care that the entire process is fully in order, he must include in the services not only the realization of the contract in public deed, he must also investigate that the property is not free of encumbrance and that the people to make the sale are the legitimate owners of the property.
The buyer's attorney must request at the National Registry Center a certification of the property in which it is determined that the property does not have any problem to be transferred to another person.
It is also important that the property is checked that it is free of municipal taxes, otherwise it cannot be registered in the CNR, it is very common that although the property is free of encumbrance, the owner owes a municipal tax, which It must be canceled to avoid problems for the new owner.
Initially clarify that it is very important to hire a notary lawyer to accompany the entire process, it is important that the lawyer and notary is hired above all by the buyer, the lawyer will be the one who must take care that the entire process is fully in order, he must include in the services not only the realization of the contract in public deed, he must also investigate that the property is not free of encumbrance and that the people to make the sale are the legitimate owners of the property.
The buyer's attorney must request at the National Registry Center a certification of the property in which it is determined that the property does not have any problem to be transferred to another person.
It is also important that the property is checked that it is free of municipal taxes, otherwise it cannot be registered in the CNR, it is very common that although the property is free of encumbrance, the owner owes a municipal tax, which It must be canceled to avoid problems for the new owner.
How much can the fee for the lawyer and notary cost?
In general, prices can vary between US $ 500 and US $ 1000, the fees of a notary lawyer, who must include in the service the investigation of the property in the CNR and the complete registration process. Many lawyers calculate the price of the fees according to the price of the property, very similar to the cost of registration fees.
In general, prices can vary between US $ 500 and US $ 1000, the fees of a notary lawyer, who must include in the service the investigation of the property in the CNR and the complete registration process. Many lawyers calculate the price of the fees according to the price of the property, very similar to the cost of registration fees.
How much is the tax on the acquisition of the property? And how are they paid?
In concept of payment of transfer taxes, it is 3% to the amount that exceeds US $ 28,571.43.
And for registration fees, you pay US $ 0.64 for every US $ 100 or fraction of the property price.
The receipts must be presented at the time of requesting the corresponding records in the CNR (National Registry Center) together with the solvency of the municipality.
There is an online calculator on the website of the National Registry Center at the following address:
https://www.e.cnr.gob.sv/ConsultaTramite2/CalculoAranceles
In concept of payment of transfer taxes, it is 3% to the amount that exceeds US $ 28,571.43.
And for registration fees, you pay US $ 0.64 for every US $ 100 or fraction of the property price.
The receipts must be presented at the time of requesting the corresponding records in the CNR (National Registry Center) together with the solvency of the municipality.
There is an online calculator on the website of the National Registry Center at the following address:
https://www.e.cnr.gob.sv/ConsultaTramite2/CalculoAranceles
How is the payment made when acquiring a property? How difficult is it to transfer the funds?
On many occasions this is one of the most complicated parts of the process when buying with funds abroad, since by the law of banks and money laundering the transfer of funds in large amounts are highly regulated. Sometimes we have advised foreign clients to open a bank account in the country, and thus initially make a transfer from abroad to their own bank account, and then make the transfer to the owner of the property either via normal bank transfer to bank or by check certified by the bank. In this way the buyer can handle the funds in a better way, since transferring directly to the seller usually takes longer, making a pre-contract necessary in some cases since the bank, in addition to taking time to transfer the funds, the The bank must retain the funds until the true origin of the funds is investigated. That time is better to wait and manage it to your own bank account.
On many occasions this is one of the most complicated parts of the process when buying with funds abroad, since by the law of banks and money laundering the transfer of funds in large amounts are highly regulated. Sometimes we have advised foreign clients to open a bank account in the country, and thus initially make a transfer from abroad to their own bank account, and then make the transfer to the owner of the property either via normal bank transfer to bank or by check certified by the bank. In this way the buyer can handle the funds in a better way, since transferring directly to the seller usually takes longer, making a pre-contract necessary in some cases since the bank, in addition to taking time to transfer the funds, the The bank must retain the funds until the true origin of the funds is investigated. That time is better to wait and manage it to your own bank account.
What other procedure should be done after the property is registered in the CNR?
After the registration has been carried out, the public deed is presented in the municipality where the property is located to change the name of the owner. Then, in the same way, the request is made to the basic services, electricity and drinking water companies in the event that the property has drinking water.
After the registration has been carried out, the public deed is presented in the municipality where the property is located to change the name of the owner. Then, in the same way, the request is made to the basic services, electricity and drinking water companies in the event that the property has drinking water.
What other expenses do you have when you own a property in El Salvador?
Apart from the notary fees, the property price, registration fees and transfer taxes, the owner must pay the municipal fees on a monthly basis, these may vary depending on the location, within these fees is the collection service garbage, could include other municipal services such as video surveillance service, but in any case the municipal fees are around US $ 3 to US $ 10 per month.
In case the property is in a private condominium or housing complex, you should consult some type of extra private monthly cost.
Also note that when buying a vacation home on the beach or in some rustic place, you usually need to hire an administrator or security guard for maintenance and security that could reach a minimum urban wage of US $ 300.
Apart from the notary fees, the property price, registration fees and transfer taxes, the owner must pay the municipal fees on a monthly basis, these may vary depending on the location, within these fees is the collection service garbage, could include other municipal services such as video surveillance service, but in any case the municipal fees are around US $ 3 to US $ 10 per month.
In case the property is in a private condominium or housing complex, you should consult some type of extra private monthly cost.
Also note that when buying a vacation home on the beach or in some rustic place, you usually need to hire an administrator or security guard for maintenance and security that could reach a minimum urban wage of US $ 300.
How much do you pay when you work with a real estate agent?
It is very common for foreigners who need to acquire property, who seek the advice of a real estate agent, and in fact it is highly recommended to opt for one when they do not have much knowledge of the market, in El Salvador the payment of the commission to the Real estate agent is mutually agreed between all the parties involved, the percentage ranges between 3% to 5%, which is usually covered by the seller, but there are cases that for personal interests the buyer prefers to pay the commission.
It is very common for foreigners who need to acquire property, who seek the advice of a real estate agent, and in fact it is highly recommended to opt for one when they do not have much knowledge of the market, in El Salvador the payment of the commission to the Real estate agent is mutually agreed between all the parties involved, the percentage ranges between 3% to 5%, which is usually covered by the seller, but there are cases that for personal interests the buyer prefers to pay the commission.
What are the probabilities of fraud when acquiring real estate in El Salvador?
On the subject of transfer of property and real estate there are very clear and strict laws, the risks of fraud are extremely scarce, especially because it is an obligation that the contracts be in public deed by a Notary, who must be a witness that Everything is totally in order since it is under your license risk that these types of contracts are carried out legally. There could be some kind of fraud only when hiring a false lawyer or notary as legal advisor, but in the same way the laws are extremely strict and difficult to violate without deducting criminal responsibilities.
On the subject of transfer of property and real estate there are very clear and strict laws, the risks of fraud are extremely scarce, especially because it is an obligation that the contracts be in public deed by a Notary, who must be a witness that Everything is totally in order since it is under your license risk that these types of contracts are carried out legally. There could be some kind of fraud only when hiring a false lawyer or notary as legal advisor, but in the same way the laws are extremely strict and difficult to violate without deducting criminal responsibilities.
How does bitcion work in El Salvador?
It is a fairly complex issue and for the moment incomplete since it is a new measure of which there is much ignorance of the great majority of the population, you can click here to see an editorial about it, but in summary, an application has been implemented by the State in which users can have their funds in both dollars and bitcoins to be able to transfer them to other users who have the same application and are on the same network. Users can decide if they have their funds in dollars or in bitcoins.
Can I pay for properties in bitcoins?
That will depend on each seller, it is an issue that is still being developed and that little by little it is possible that property owners will become more familiar.
It is a fairly complex issue and for the moment incomplete since it is a new measure of which there is much ignorance of the great majority of the population, you can click here to see an editorial about it, but in summary, an application has been implemented by the State in which users can have their funds in both dollars and bitcoins to be able to transfer them to other users who have the same application and are on the same network. Users can decide if they have their funds in dollars or in bitcoins.
Can I pay for properties in bitcoins?
That will depend on each seller, it is an issue that is still being developed and that little by little it is possible that property owners will become more familiar.
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