Real Estate Attorney in El Salvador

Video: Tips on El Salvador real estate transactions from a real estate lawyer

I sat down with my attorney in El Salvador Rodrigo. He elaborated on the process of purchasing real estate in El Salvador and how to avoid falling victim to scams in real estate transactions.

• Can foreigners buy real estate in El Salvador?
• How to get a tax number in El Salvador
• Risks when buying real estate in El Salvador
• How to buy real estate in El Salvador with Bitcoin

Why you need a good real estate lawyer in El Salvador for property transactions

• Many title deeds are not clean. You can have classic situations with liens or mortgages on them, but also cases where the previous transaction was not done properly. For example, maybe the land on which the house sits was sold by a family 10 years ago, and one of the signatures is missing (that cousin who was far away). Effectively, you could suddenly have a family claim the house from you saying the previous sale was not done properly, and seek to grab it from you. As a foreigner, you are more vulnerable to such situations.
• Permits. Your attorney can let you know if some special business permits or otherwise would be required for the real estate in question, and of possible tax incentives in some industries.
• Your attorney should ensure that there are no outstanding debts related to the property such as homeowners association fees, electricity, water, garbage, internet, etc.
  Your attorney can enable you to pay for the real estate using an escrow account in order to guarantee everyone’s safety. Essentially, you transfer the purchase price to his account, and only once all verifications have been done and everything is deemed to be fine will he transfer the money to the seller.
• IMPORTANT: Avoid using an attorney proposed by your real estate agent. The reality is that there can be a conflict of interest in such cases. Though you are officially the lawyer’s client, who is more important? You and your single transaction, or the agent that brings dozens of clients? Using a lawyer that you chose independently won’t be more expensive and will offer you much more security.

What you need to know before buying real estate in El Salvador

Here are 5 important points you should consider when buying real estate in El Salvador.

• You will need a local tax number (NIT) to buy real estate in El Salvador. It is not a complicated process; it can be done in person or remotely by using an attorney.
• In some cases it is better to create a Salvadoran company to buy the real estate. It adds costs, but it can be better for some people.
• The final contract must then be signed in person at the Notary Public. If you are not present, it can be done with a power of attorney. Buying real estate in El Salvador can be done entirely remotely using the Apostille Treaty system.
• There is a registration fee of 0.63% of the amount of the transaction to be paid by the buyer, as well as a transfer tax of 3% of any amount above $28,000
• Sellers have to pay 10% capital gains taxes for real estate held for over a year. If they held it for less than a year, and made capital gains, then they get taxed at the applicable personal income tax rate

How to buy real estate in El Salvador with Bitcoin

A big draw for investors in El Salvador is the fact that Bitcoin is legal tender in the country. This means that you can buy any real estate in El Salvador using Bitcoin as long as the seller agrees to such a transaction.

Rodrigo and his team regularly deal with such transactions and can ensure a Bitcoin real estate transaction in El Salvador happens in a safe way. Essentially, the amount of Bitcoin and the USD amount must be mentioned in the contract.