Real Estate Lawyer in Nicaragua
I have the right person for you. I’ve worked with him in the past, he 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.
My lawyer can help you anywhere in Nicaragua, and has offices in Managua and San Juan Del Sur. We’ll look at:
1. Why you need a good real estate lawyer in Nicaragua
2. What are some of the expected government fees that you are expected to pay when purchasing real estate in Nicaragua
3. My lawyer’s fee breakdown
1. Why you need a good lawyer for your property transaction in Nicaragua
- 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.
- Your lawyer 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.
- Some coastal properties have extra taxes due to the Nicaraguan law code, whilst others don’t. You want to make sure under which tax code your real estate qualifies.
- Some properties have registered titles, while others are sitting on land leased from the government. You want to know what you are buying.
- There is a 1% annual property tax on real estate, based on the municipality’s valuation of your property. The valuation may be lower or higher than the purchase price.
- Your lawyer should ensure that there are no outstanding debts related to the property such a home owners association fees, electricity, water, garbage, internet, etc.
- Your lawyer can enable you to pay for the real estate using an escrow account in order to garantee 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: Never use a lawyer proposed by your real estate agent. This point is valid for any international market in which you choose to invest. 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? I repeat – Get your own lawyer. Using your own lawyer won’t be more expensive, but will offer you much more security.
2. A few important points you should know before buying real estate in Nicaragua
- There is a registration fee of 1% of up to a maximum of USD $1160.
- In many cases it it better to create a Nicaraguan company to buy the real estate. It adds costs, but if you want to obtain an investor visa it is necessary. Also, if you want to sell the property or transfer it to a relative later on, you will not have to pay the registration and transfer taxes – you’ll only have to change the name of the shareholder in the corporation, which is much more affordable and quick.
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 Nicaragua can be done entirely remotely using the Apostille Treaty system.
BEWARE: The transfer tax is legally borne by the seller, but sellers and agents will often try to get the foreign buyer to pay for it. Be very aware of this in your negotiations. Here is the chart of the expected value of the transfer tax depending on the property value.
0 to $50,000.00
$50,001.00 to $100,000.00
$100,001.00 to $200,000.00
$200,001.00 to $300,000.00
$300,001.00 to $400,000.00
$400,001.00 to $500,000.00
$500,001.00 and more
3. My lawyer’s fee structure
He’s really good, speaks English fluently, and has offices in both Managua and San Juan Del Sur.
Lawyer fees for a real estate transaction in Nicaragua
- Legal fees for property registration = $500
- Legal fees for closing = 1% of the property value with a minimum of $500
- Wire fees = $100
- Allotment for incidental registration = $300
- Due Diligence on the property (optional but highly recommended) = $500
- Escrow fee (optional but highly recommended) = $375
- Creation and registration of Nicaraguan Corporation to hold the property (optional) = $1200
Important to understand: The real estate legal services are performed by a lawyer. We at The Wandering Investor are a middleman and therefore have no liability.