Real Estate Attorney in El Salvador
The importance of having a trustworthy legal advisor by your side cannot be overstated. This is especially true with real estate investing in El Salvador. I’m in El Salvador with my real estate attorney, and we’ll be discussing real estate transactions here in El Salvador, the whole process, what to watch out for, and the mistakes to avoid when buying real estate or property in El Salvador .
If you are looking for a reliable real estate attorney in El Salvador to guide you through the process of purchasing a home or property, look no further than Rodrigo! He has extensive experience and in-depth knowledge of Salvadoran real estate laws and regulations.
EL SALVADOR
El Salvador Real Estate:
Use a lawyer who specializes in working with foreigners to avoid common issues and to receive the most relevant advice.
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.
Meet Rodrigo, My Real Estate Attorney in El Salvador
Meet El Salvador’s top real estate attorney for investors. Rodrigo is a Real Estate attorney in El Salvador with offices in San Salvador, but he and his team can help with transactions anywhere in this small country.
Rodrigo’s law firm has been in business for over 20 years, is reasonably priced and will ensure you do not get “played” because let’s face it – that’s always a risk as a foreigner in any transaction abroad.
He speaks fluent English and his law firm has a proven track record of over 1000 real estate transactions.
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Article on El Salvador:
Transcript of “Tips on El Salvador real estate transactions from a real estate lawyer “
LADISLAS MAURICE: Hello, everyone. Ladislas Maurice from thewanderinginvestor.com. Today, I’m with my lawyer, Rodrigo, here in El Salvador. Rodrigo, how are you?
RODRIGO: I’m fine. And it’s great to be with all of you again.
LADISLAS MAURICE: Yeah, fantastic. Look, we’re going to be discussing real estate transactions here in El Salvador. Because of all the economic reforms happening in the country, there’s an increasing amount of foreigners coming to El Salvador to make real estate investments in the capital city, in the touristy areas in the mountains and on the coast as well. And we’ll be discussing as well how to buy real estate here in El Salvador using Bitcoin.
Can foreigners buy real estate in El Salvador?
LADISLAS MAURICE: Rodrigo, can foreigners buy real estate here in El Salvador?
RODRIGO: Definitely, every person that comes to El Salvador can buy real estate here. You just need to follow a few simple steps and you will be the new owner of real estate here in El Salvador.
LADISLAS MAURICE: What do you need, concretely?
RODRIGO: Concretely, you will need a tax identification number and your passport to do the public deed of sale and purchase.
How to get a tax number in El Salvador
LADISLAS MAURICE: Cool. The tax number, I did it myself this afternoon. It cost me $2 and 20, 30 minutes of my time at the local tax office. So really quick. You can also help people do it but it’s really a non-issue. Does it make me a tax resident?
RODRIGO: It does not make you a tax resident.
LADISLAS MAURICE: Cool. Very important. I would not have gotten this tax ID if it resulted in me having tax residency. It’s essentially just paperwork to enable you to do business in El Salvador. Cool.
Risks when buying real estate in El Salvador
LADISLAS MAURICE: What are some of the risks associated with real estate transactions here in El Salvador?
RODRIGO: The primary risk here in El Salvador is that the land is not as big as they say, they have some legal issues, it has more owners than they are saying. We strongly, and I strongly recommend do a due diligence beforehand to buy any land here in El Salvador, and for that I can give you my help.
LADISLAS MAURICE: Yeah. Look, when you go online, you constantly hear stories of foreigners that go to emerging markets, they get played, they lose all the money, etc. It doesn’t happen if you use a good lawyer, okay? When it comes to buying real estate overseas, there’s so many things that you as a foreigner don’t know because things are not like back home. So don’t be cheap. By that, I mean, don’t not use a lawyer. And if you use a lawyer, use a lawyer that is from a reputable firm, don’t just take your wife’s cousin or something, or some cheap lawyer that you just met, because that can also lead to problems. Because often, local-local lawyers don’t understand the needs of foreigners and don’t necessarily understand that you don’t understand certain things.
Your lawyer may just think that something is normal and not tell you, and then you discover it after, and you’re like, “What do you mean?” And then it’s normal. But when you use lawyers that help foreigners, they understand the differences, and then they can help essentially coach you through the whole process. So really important.
How to buy real estate in El Salvador with Bitcoin
LADISLAS MAURICE: What about Bitcoin transactions in real estate? Because bitcoin is now legal tender here in El Salvador.
RODRIGO: Yes.
LADISLAS MAURICE: How does it work, concretely?
RODRIGO: Concretely, here in El Salvador it works pretty easy because all the transactions happens before the notary public that will write or draft the public deed of sale and purchase. In the public deed of sales and purchase, we establish the amount of bitcoin that will take for you to buy the land and its equivalent in US dollars. And that’s it, the transaction happens before the notary. And then we sign the document, the contract, and it’s done.
LADISLAS MAURICE: Cool. So you put the Bitcoin amount, the dollar amount on the contract, you’re in front of the notary public, you make your Bitcoin transaction–
RODRIGO: And then you sign and you’re the owner.
LADISLAS MAURICE: Then you sign and you’re good.
RODRIGO: Obviously, afterwards, you need to go to the public registry in order to file the documentation but that will be a topic for another video, I hope.
LADISLAS MAURICE: Actually, no. That’s what people hire you to do.
RODRIGO: Awesome.
LADISLAS MAURICE: [laughs]
RODRIGO: [laughs]
LADISLAS MAURICE: Essentially, then you take the paperwork, you go do everything, and then you just get the title deed.
RODRIGO: Exactly, yes. Yes.
LADISLAS MAURICE: Okay, cool. Fantastic. Look, it’s simple. But as always, when you’re overseas, proceed with caution and get the right legal help. If you want to get in touch with Rodrigo with regards to a real estate transaction or even residency here in El Salvador, there is a link below, and you can just get in touch with him.
RODRIGO: Yes.
LADISLAS MAURICE: Rodrigo, thank you very much for your time.
RODRIGO: Thank you.
LADISLAS MAURICE: I really appreciate it.
RODRIGO: I appreciate it.