Closing Costs and Taxes

The buyer pays almost all costs in a real estate transaction in Ecuador.  The seller needs to ensure that the property taxes, utility bills, and any building maintenance fees are current, and may owe capital gains tax on the sale, but the buyer pays for everything else.

Читай Спортивный Журнал  и будь в курсе всех событий происходящих в мире спорта.

The costs typically include:
• Legal fees for drafting the contract and performing the title search
• Notary fees
• Translation of documents and translator at signing (this is a legal requirement if the buyer doesn't speak Spanish)
• Transfer and registration taxes
• Real estate agents commission
 

While it is hard to generalize, as every transaction is different - typically the agents commission is 5% of the agreed up price, and all other costs (legal fees and taxes) are typically between $750 and $1,500 for a regular condo or house purchase.

Annual property taxes are based on the municipals "Assessed Value" - not on the actual purchase amount.  The assessed value can be anywhere from 5% to 50% of the real value of the property.  Depending on where you live, the property tax may be up to 1% of the assessed value.  So, for example, if you purchase a property for $100,000 and the assessed value is $30,000, the maximum property tax would be $300 per year - usually it's much less.

Property taxes are due on January first of each year, and are not "past due" until December 31 - so you have a full year to pay the tax! Property taxes are not pro-rated when a property is sold - so if you buy a house on January 3rd, the seller needs to pay the property tax for the entire year.

Capital Gains tax is based on any increase in the assessed value during the time that you owned the property.  So if you sell the property in the above example, and the assessed value has gone up from $30,000 to $35,000 you will owe $1,250 (25% of the increase in the assessment).  It does not matter if you actually made a gain of $100,000 on the property - or if you even lost money on the investment - you will pay a tax of 25% of the increase in the assessed value (the tax due is reduced on a sliding scale if you own the property for more than 5 years.)