Guatemala Real Estate Closing cost
The Guatemalan Real Estate Closing cost
In Guatemala, a foreigner has no limitation in acquiring apartment, house, hotels, condos, land ...
The major difference will be in the quality of ownership title you will be getting as there are different form of owning a property.
The majority of the cases you will be acquiring titled property. A regular deeded property on which you can do title search. A title that is guaranteed by the Guatemalan government because registered versus squatters rights for example.
There are no taxes exemption and the buyer is the one that is expected to pay for these costs which are :
the notary fee which are for transferring and registering (if applicable) the property.
the VAT (IVA) or Stamps Tax on Titled properties to the government.
the
These cost may amount from 5% to 17% of the total cost of the transaction.
One thing that is important to understand that in Guatemala prices given to the public by law must includes the VAT.
Now with the real estate transactions this VAT tax might be 3% or 12% on titled properties.
The difference is if you buy a brand new property on a development, an apartment for example because you are the first buyer you will have to pay 12%.
If you are buying as the second or third or more buyer then you will pay only 3% stamp taxes.
Now on Rights of possession some lawyers say that you have to pay the VAT (12%) other say no.
Because you are buying rights and not goods... We recommend to pay the 12% VAT because if you are to deal with a government institution most probably they will ask you to pay them before attending your demand.
Guatemalan cost seems high, as 2014 Study published by the Inter American Development Bank (IADB) found that : "the highest closing costs in Latin America are in Guatemala. Where the buyers can have to pay up to 17% of the purchase deal value in closing costs."
The study estimated that the average costs in the Amerique in 2014 is around 11% and they could vary from 6 % low in Argentina to 9% high in the US.
It is very difficult for a foreigner to get a mortgage from the Guatemalan bank system. Unless you come up for example with more then half of the total price in cash and then you ask to mortgage the property to finance the rest. But our experience is that it is not an easy process as the bank are very cautious at the moment of giving loans.
Sometimes you find private owners willing to finance the transaction.
In Guatemala, a foreigner has no limitation in acquiring apartment, house, hotels, condos, land ...
The major difference will be in the quality of ownership title you will be getting as there are different form of owning a property.
The majority of the cases you will be acquiring titled property. A regular deeded property on which you can do title search. A title that is guaranteed by the Guatemalan government because registered versus squatters rights for example.
There are no taxes exemption and the buyer is the one that is expected to pay for these costs which are :
the notary fee which are for transferring and registering (if applicable) the property.
the VAT (IVA) or Stamps Tax on Titled properties to the government.
the
These cost may amount from 5% to 17% of the total cost of the transaction.
One thing that is important to understand that in Guatemala prices given to the public by law must includes the VAT.
Now with the real estate transactions this VAT tax might be 3% or 12% on titled properties.
The difference is if you buy a brand new property on a development, an apartment for example because you are the first buyer you will have to pay 12%.
If you are buying as the second or third or more buyer then you will pay only 3% stamp taxes.
Now on Rights of possession some lawyers say that you have to pay the VAT (12%) other say no.
Because you are buying rights and not goods... We recommend to pay the 12% VAT because if you are to deal with a government institution most probably they will ask you to pay them before attending your demand.
Guatemalan cost seems high, as 2014 Study published by the Inter American Development Bank (IADB) found that : "the highest closing costs in Latin America are in Guatemala. Where the buyers can have to pay up to 17% of the purchase deal value in closing costs."
The study estimated that the average costs in the Amerique in 2014 is around 11% and they could vary from 6 % low in Argentina to 9% high in the US.
It is very difficult for a foreigner to get a mortgage from the Guatemalan bank system. Unless you come up for example with more then half of the total price in cash and then you ask to mortgage the property to finance the rest. But our experience is that it is not an easy process as the bank are very cautious at the moment of giving loans.
Sometimes you find private owners willing to finance the transaction.
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