Is it difficult to purchase real estate in Nicaragua?

Is it a difficult process to purchase real estate in Nicaragua?

Nicaragua IconThe simple answer to this often asked question is “No, it’s not a difficult process to purchase property in Nicaragua.” Foreign Investment Law 344 recognizes foreign investors’ rights to own property in Nicaragua and establish a business if they wish. Under Law 344 foreigners are permitted to own their property 100%, with equal rights to Nicaraguans.

Nicaragua offers incredible opportunities in real estate, from elegant colonial homes in Granada, the oldest European established city on the mainland of the Americas, to the beach front property the entire length of the Pacific coast.

Most of the real estate sold to foreigners are second homes sold to buyers from the USA and Canada. However, there are many North Americans and Europeans
relocating to Nicaragua to live permanently as retirees.

It is important to remember that real estate transactions and the supporting Nicaragua institutions are underdeveloped. Most purchases are cash transactions with the buyer and seller directly negotiating. There are real estate agents in Nicaragua, but legally they’re nothing more than middle men. The only person legally recognized to sell or lease a property is the registered owner. That said, it’s advisable to have a lawyer or individual knowledgeable in both Nicaragua laws and specific properties to consult with. I say this is because the titles of some properties have issues that can result in problems in transferring ownership.

Many properties in Nicaragua were confiscated illegally in the 1980s and ownership can or is being contested. Some properties were never properly registered in the first place, especially rural real estate. Thus determining who exactly is the rightful owner of a given property can be challenging. Even a comprehensive title search can fail to reveal ownership claims. Caveat Emptor, (Buyer Beware), is of tantamount importance when considering any real estate purchase in Nicaragua.

To be avoided completely if you are planning to purchase a property to build on are properties that have agrarian reform titles or supplemental titles issued by court order.

The Purchase Process

The process of purchasing a property starts with an offer being accepted by the buyer. A competent lawyer is needed to make sure there are no issues with the title or survey and, if there are, to resolve them BEFORE a formal promise of sale is agreed to. Once a promise of sale is created and agreed to, a NON-REFUNDABLE deposit of 5% to 20% is paid to the seller and a timetable for closing is set.

Once a purchase is completed, the process of registering a property takes approximately 65 days. The detailed steps to registering a property in Nicaragua are outlined here: The Steps Involved In Transferring Nicaragua Real Estate.

The transfer tax to be paid by the purchaser is incremental, meaning the more expensive the property, the great the percentage of the value is due as transfer
tax. The current tax schedule is…

  • Up to US$50,000 = 1% of the purchase price
  • US$50.000 – US$100,000 = 2% of the purchase price
  • US$00,000 – US$200,000 = 3% of the purchase price
  • Over US$200,000 = 4% of the purchase price

If you have any questions or wish to discuss the purchase or leasing of a property in Nicaragua, contact us.




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