PROPERTY IN NICARAGUA
Nicaragua has made impressive
progress in recent years in consolidating democratic
institutions and fostering economic growth. The country.
s GDP grew by 5 percent in 1997, its best performance
since 1981. For 1998, the goal of 6 percent GDP appears
within reach. Construction, real estate and tourism
are among the fastest growing sectors, but land prices
are still low by U.S. standards and good investment
opportunities still exist. However, due to still-unresolved
cases stemming from confiscations of private property
under the Sandinista regime in the 1980s, buying land
in Nicaragua must be done with care. This guide is intended
to help you bypass some of these problems.
many properties were confiscated illegally in the 1980.
s, title to many properties is unclear. Buyers should
exercise great care when purchasing real property in
Nicaragua, especially lands formerly subject to agrarian
reform. Even comprehensive title searches sometimes
fail to reveal ownership uncertainties.
Steps To Buying and
- To buy a property
in Nicaragua, you can either do most of the work yourself
or hire local specialists to do much of the legwork.
When hiring local specialists, it is important to
agree at the outset on a fixed fee for their services
- Identify the property
of your choice, usually by the recommendation of a
friend or a local real estate agent (who earns a negotiable
commission, usually between 5 and 10 percent). Be
wary of property whose ownership changed hands during
- At this point, you
may either hire a local attorney or proceed on your
own to ask the seller for a copy of the property.
s title (escritura de propiedad), evidence that it
has no liens on it (libertad de gravamen), and its
"certificado registral." Often, owners are
hesitant to provide copies of titles. In such cases,
you may ask the seller for the information shown on
the title (property number, volume number, page number,
entry number) or for a copy of the property. s registration
(certificado registral) showing the last three owners
(los últimos tres asientos) and the absence of liens.
- Next, have a lawyer
revise the documentation (escritura de propiedad,
certificado registral, and libertad de gravamen) to
verify that the property. s seller has clear title.
- After you have verified
the land has no liens, a notary can prepare a sales
- After the transaction,
you or your attorney may then register the property
in the Registro Público de la Propiedad Inmueble.
To be considered the legal owner of the property,
you should possess the property title properly annotated
by the registrar.
Real estate taxes are
1% of value of the property and are paid to the Municipal
Government. Farmland of up to 30 manzanas (42.6 hectares)
is exempted from real estate taxes.
Local firms offer coverage
for fire, earthquake and floods but not acts of war.
For Tourism Projects:
Chapter IX of the May
1997 Tax Reform Law authorizes special benefits for
tourism projects for those who invest 200,000 córdobas
in the Departments of Carazo, Granada or Rivas, or 300,000.00
cordobas on the Atlantic Coast. Those benefits are import
tax exemption and luxury tax exemption (for construction
materials, etc.). However, if the business fails or
is converted to another business you must pay luxury
For Foreign Investors
Foreign Investors may,
but are not required, to register investments and negotiate
a foreign investment agreement with the Ministry of
Economy and Development. This guarantees the investor
the following privileges under Foreign Investment Law.
Repatriation of foreign
capital, less any losses incurred, 3 years after the
capital to be repatriated entered the country.
Remittance abroad of
the net profits generated by the capital registered.
Prompt, adequate and
effective compensation in the case of expropriation
for reasons of public utility and social interest.
In addition to the benefits
listed above, other tax benefits may be individually
negotiated depending on the type of business incorporated.
Investors who do not register their capital may still
make remittances through the parallel market, although
law does not guarantee these transactions. Embassy is
aware of no investor who has encountered remittance
difficulties since inception of the Foreign Investment
011 506 261-8968
Nicaragua: 505 552-2776
Costa Rica Real Estate Information by Christopher Howard and Listings by Approved Brokers