Legalities of Real Estate Purchases
It is our intention to help you, in any way possible, to make your business on Roatan trouble free. If you decided to purchase property the following information will help. Prior to 1990, foreigners could not own land on Roatan individually. Do to a change in the constitution a few years ago, foreigners can now purchase land in their own names under certain conditions. Foreigners, as individuals, are not allowed to purchase more than 3,000 square meters of land, which is slightly less than an acre, and must build within three years. This does not make it impossible for you to purchase a parcel of land that is more than an acre or to postpone building.
To overcome these limitations, you must form a Honduran corporation. Forming a Honduran corporation is a simple matter, which can be taken care of by a local attorney at a cost of about $1,250. We will recommend a reputable attorney for you if needed. By forming this corporation, which you will own in full, and by designating yourself general manager and administrator, you are entitled to all the rights of a Honduran citizen regarding ownership of property. There are no time restrictions on building or developing for a Honduran corporation and you can own more than 1 acre of property. Before you make any real estate commitments contact a real estate agent or lawyer you trust, not only to conduct the title search, but also to register ownership of the property via a document called an Escritura Publica or Dominio Pleno.
Your professional will make sure that the title you are transferring is official. A publicly registered document has the appropreate stamp on it with the court’s registry number. If a survey has not been furnished, you should hire a surveyor to determine your property’s boundaries before your land documents can be registered. Escritura Publica means it is and was a public document when transferred. Dominio Pleno means that there was not a public document and a judge had to make a decision to grant title to a property owner based on his testimony and documents. Notice would then be posted for 30 days. The judge will verify ownership by talking surrounding property owners. When he issues Dominio Pleno, it is then the public document and holds as much validity as an Escritura Publica.
Bank financing, with interest rates are currently at 35%, that is not a realistic option. An alternative is to finance your purchase by owner finance. Many buyers have refinanced their homes or other collateral in the U.S. also read our report on IRA/401(k) possabilities, in order to purchase property in Honduras since the interest rates are much lower in the U.S. The terms of each sale will defer and are generally dependent on the financial circumstances of the seller. You may be asked to pay for the property in full, in cash, at the time of the sale. However, the standard for owner finance is usually 30% down, financing the balance for one to five years at 12% to 14%. Every situation is different.
Transfer taxes and associated closing costs will amount to about 6% of reported sale price of the property. Property taxes are extremely low.
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Thank you for visiting Our Site Marci Wiersma
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