How to Buy a House in Nicaragua – Step Guide

How to Buy a House in Nicaragua

If you’re ready to buy a house in Nicaragua, this is probably an exciting and emotional time for you. However, before starting your search, you’ll probably want to understand the ins and outs of buying a house in Nicaragua.

Nicaragua is one of the fastest-growing real estate destinations in the world, and market predictions expect growth to continue. Our team of real estate experts has the experience and expertise needed to find your new dream home. We hope this guide will help you gain insight and become informed on how to buy a house in Nicaragua.

About Nicaragua

Nicaragua is the largest country in Central America, with the Caribbean Sea and the Pacific Ocean on each side. As a result, you get the best of both coastlines with beaches that stretch for miles. It’s not just beaches, though. Nicaragua is an exceptionally biologically diverse country; aside from being a top global surf destination, it’s also known as the “land of lakes and volcanoes.” The tropical climate and landscape variety are just a few features helping attract tourists and international buyers to Nicaragua.

Overview of The Nicaragua Real Estate Market as of 2023

You can buy a brand-new condo in Nicaragua or a manicured, mint condition home with top-notch amenities for a very reasonable price. Consequently, the market is emerging as a hotspot for various North American buyers, including retirees and investors.

With the rental market in Nicaragua becoming increasingly lucrative, more people are becoming interested in buying a home in Nicaragua. Despite the relatively recent real estate boom in Nicaragua, it’s becoming increasingly more competitive for buyers and sellers alike. However, property prices in Nicaragua remain very affordable compared to other places in the world. It continues to remain much more cost effective and just as sensational as its neighboring country Costa Rica. Most importantly, tourists and locals all live here with two fundamental principles: minimalism and happiness.

If real estate trends continue as expected, prices in Nicaragua will continue to rise in the years to come. That means now is a crucial time to get your slice of paradise. Even though the pandemic, sales in Nicaragua have continued on an upward trajectory. Buyers are purchasing homes at a rapid rate. As more foreign investors buy a house in Nicaragua, sellers will become more demanding with asking prices. In fact, current homes on the market are starting to sell for much higher than the asking price. That’s because buyers are starting to make aggressive offers to secure their dream homes.

Why Are People Moving to Nicaragua?

Nicaragua has been a surfer’s paradise for quite some time now. But a growing number of people are choosing to buy a house in Nicaragua. People are choosing Nicaragua as their new dwelling for many reasons. Whether you wish to retire overseas or look for investment opportunities, Nicaragua has possibilities for everyone.

Who wouldn’t want to live in a scenic paradise with sandy beaches? Choosing to buy a house in Nicaragua is like living the “Endless summer” – you get to enjoy year-round warm weather and enjoy unlimited activities.

Moreover, Nicaragua is appealing to families looking for a more tranquil pace of life. When you buy a house in Nicaragua, you can slow down and enjoy life while spending more time with your loved ones. Gone are the days of feeling overworked, overstimulated, and stressed out. Immersing yourself in nature truly has healing properties that you won’t feel or find in a bustling city.

Another feature that compels people to buy a house in Nicaragua is the inexpensive real estate. It’s far more affordable than anywhere in North America and Europe. For example, you can purchase a four-bedroom house with panoramic views in Nicaragua for a fraction of the price you would pay for a studio apartment in a metropolitan area. Calling Nicaragua real estate a bargain would be an understatement.

Not only is real estate less expensive, but the overall cost of living is much lower than in other places. According to Going Global, the average cost of living in Nicaragua is 70% more cost effective than in New York City. You’ll save tremendous amounts on your living expenses, like food costs, when you live in Nicaragua. Local markets provide inexpensive, organic produce. And going out to eat is something practical that almost anyone can afford. Even with a large family, you can enjoy a meal out on the town without breaking the bank. Nicaragua’s cuisine is some of the healthiest and most delicious that you can eat at a remarkably affordable price.

Can a US Citizen Buy a House in Nicaragua?

Yes, foreigners and US citizens can buy a house in Nicaragua. The government of Nicaragua welcomes overseas buyers. They want international investors, so there are minimal restrictions for US citizens seeking property in Nicaragua. The buying process is the same for everyone.

The only exception is that foreign buyers cannot buy land within five kilometers of international borders. You’ll need a waiver permit if you wish to buy land within five to fifteen kilometers of international borders. Furthermore, there are different regulations for beachfront properties, which are generally considered “Municipality land.” Beachfront property is any property within 50 meters of the high tide mark.

What Are the Steps to Buy a House in Nicaragua?

Finding the perfect property may take some time and commitment. But the process of buying a house in Nicaragua is simple. Here are the steps:

  1. 1. Choose a Region or area of the country you would like to Invest in.

    The first step in buying a house in Nicaragua is to research the different areas of the country where you might want to purchase a property. Nicaragua real estate offers a variety of amazing properties for sale in different locations, including popular tourist destinations like San Juan del Sur and Granada, or some surf real estate options in Tola and Popoyo.

  2. 2. Find a real estate agent that has local knowledge and works for reputable real estate agencies in Nicaragua.

    A real estate agent can help you find properties that match your criteria and can guide you through the process of making an offer. They can also help with negotiations and can provide valuable information about the area you are interested in. Look for a real estate agent that has experience in the area, as they will have a better understanding of the specific challenges and opportunities that come with owning a house in a foreign country.

  3. 3. Research properties and listings you are most interested in.

    Once you have decided on an agency for representation, work with your agent from wherever you are in the world, in order to understand all aspects of the real estate market, the properties you are interested in and to obtain all available information on all of the properties you are most excited about. If you’ve chosen carefully and properly, your agent should be able to share a big portion of the initial information you need to gather to be able to begin to narrow down your search based on the specifications you’ve provided to your agent. A good agent will be able to help direct you to the best location, properties and options in Nicaragua by asking you some initial questions so they can better help you scope your search.

  4. 4. Plan a trip to Nicaragua and visit your chosen properties.

    Come to Nicaragua to view properties with your real estate agent (in person). After spending hours viewing properties online and having conference calls with your agent, it’s time to experience first-hand the feeling of having your feet on Nicaraguan soil and viewing them in person. We recommend spending your first few days exploring the properties you are most interested in with your agent. They will help dial you into local and expert knowledge, beyond just the property hunt; equally important are recommendations from your agent about best places to stay during your visit, hot spots to dine and hang out, local scenes and fares.

    We of course recommend looking into some of the other areas and attractions of Nicaragua to get a feel for the ambiance and beauty of the country as a whole. Afterall, if you do decide to buy a house in Nicaragua, all of the towns and communities will be just a short day road trip or weekend away and you will want to visit all of the diverse areas Nicaragua has to offer its visitors and permanent residents.

    Before you come to Nicaragua check out all the Nicaragua Entry Requirements 2022.

  5. 5. Choose a well-known, highly regarded Lawyer to represent you

    When you’ve found a property that you’re interested in, it’s crucial to have a lawyer assist you with the legal aspects of buying a house in Nicaragua. They can help with the contract, due diligence, and ensure that the property is properly registered. They can also provide guidance on the legal restrictions and regulations that might apply to the property that you want to buy.

  6. 6. Submit a formal written offer

    Once you’ve completed your search for your dream property, it’s time to make a formal offer. Your real estate agent can help you negotiate the terms of the sale and can assist you with any necessary paperwork. Your lawyer will also help explain any questions you have about the process and costs involved in the purchase.

    Emerald Investment requires a $500 USD earnest funds deposit in order to submit an offer. The earnest funds deposit can be made via Venmo, PayPal, TransferWise, local bank transfer or cash. Emerald secures these funds prior to drawing up the offer, and holds them while the offer is submitted and throughout any potential negotiations. Once the offer is accepted, the earnest funds are sent directly back to the buyer.

    The offer will be in the form of a Private Sales Agreement that outlines the price, terms, conditions, and contingencies of the purchase. This document can be signed digitally and does not require either party’s physical presence in Nicaragua for execution.

  7. 7. Send a 10% deposit

    After both parties sign the Private Sales Agreement, the buyer will make a 10% deposit into an escrow account chosen by their lawyer, officially removing the property from the market and marking the beginning of the due diligence process. The due diligence process will be done by the buyer’s lawyer and will typically take around 2 weeks depending on how fast they receive all the documents from the seller. The seller must provide the following documents for the due diligence – Municipal Tax Solvency, Free of Liens & Encumbrances Certificate, and an Approved Cadastral Map. The deposit is refundable if there are any significant and incurable problems discovered during the due diligence process. The buyer may ask for a building inspection during this process.

  8. 8. Complete Due Diligence and Prepare for Closing

    After the due diligence is completed and approved, the lawyers can proceed with the transaction. The buyer is responsible for sending the remaining funds to the escrow account. The seller is responsible for providing any other documents that are requested and outlined in the Private Sales Agreement.

  9. 9. Closing

    After 100% of the funds have been deposited into the escrow account and the seller has provided all of their necessary documentation and requests outlined in the Private Sales Agreement, the closing can be scheduled. The closing date will be set and both parties or assignees will meet to sign the new deed and hand over the property.

    The typical closing time from execution of the Private Sales Agreement to closing is approximately 30-45 days, for most transactions. Although some types of transactions can be moved through more quickly, if buyer and seller wish, and if documents and requirements are organized and timelines are easily predicted and met for the attorneys. Additionally other types of transactions can take longer; all of this can be explained in better detail by your agent and attorney, prior to any offer acceptance so best to cover your desired timeline with your chosen team in those initial conversations so your needs can be met.

  10. 10. Register the Property.

    After the sale, the buyer’s lawyer will take the title and accompanying documentation to the Public Registry to register the property in the buyer’s name and pay all applicable taxes and fees. This process typically takes a few months from the time of closing. In Nicaragua, the transfer of property is completed through the Public Registry of Property, where the new ownership is recorded.

  11. 11. Complete Property Registration

    When the property is registered at the Public Registry, the new title is produced, showing the buyer as the registered legal owner of the property. The buyer is now able to sell the property if they choose. It is important to put your original title in a safe place as it’s the most important document related to your property ownership. Your lawyer can also retain the title in their archives if desired. Congratulations you have learned how to buy a house in Nicaragua, you can now enjoy the benefits of living in this amazing country.

  12. 12. Additional Extras

    In addition to the legal process, it’s also important to consider the practical aspects of owning a beach house in Nicaragua. This may include hiring a Nicaragua property management company to take care of the day-to-day maintenance and upkeep of the property, as well as obtaining insurance to protect your investment.

    Finally, it’s essential to plan your move and to make sure that you are prepared for the transition. This may include obtaining a Nicaraguan residency and opening a bank account Emerald Expat Solutions and Business Consulting can help make this transition as stress free as possible.

Pay Taxes when you buy a home in Nicaragua

When you buy a house in Nicaragua, there will be taxes associated with the purchase. Those taxes include transfer tax, registration tax, and property taxes.

The seller pays the transfer tax, which varies by the property value. The higher the property value, the higher the transfer tax. For example, a $50,000 home might have a 1% transfer tax, whereas a $200,000 home would have a 4% transfer tax.

The registration and IMI (Municipal income tax) are 1% each.

You must also pay an annual property tax of 1% of your property value.

What if I Want a Beachfront Home in Nicaragua?

Let’s revisit the “Municipality land” we mentioned earlier. Nicaraguan law declares all beachfront property as “Municipality property.” In other words, it’s property that belongs to the country. So, any property within 200 meters of the high tide mark (beachfront) belongs to the country. In addition, all beachfront property is governed by law 690. Thus, if you want to buy a home in Nicaragua within 200 meters of the beach, there will be some variations in the buying process. Buyers can purchase land 50 to 200 meters beyond the high tide line with a private title or hold it in concession.

The Difference Between a Titled and a Concession Property

Nicaraguan law distinguishes two types of oceanfront properties: titled properties and concessions. Both are different types of properties with different governing laws for purchasing.

An individual or corporation wholly owns a titled property. You can sell, subdivide, or will this land to heirs. Community and municipal regulations still apply to titled properties. As a US citizen or other foreign national, you have the same rights as Nicaraguan citizens regarding property ownership. You will need your passport and other official documents to purchase a titled property.

Conversely, a concession is more or less a permanent lease from the municipality or regional council. As a US citizen or foreign buyer, you must own a business entity to be eligible for a concession. Opening a corporation requires the assistance of a local attorney. The corporation would act as an “artificial person” with rights and responsibilities, like a Nicaraguan citizen. Finally, through your corporation, you can purchase and hold a concession.

Do Titled Properties and Concessions in Nicaragua Have Different Values?

In Nicaragua, there are limited titled beachfront properties. A fully titled property offers more security. Both foreign buyers and locals prefer the guarantee of a fully titled property. Since there is more demand and lower inventory, beachfront properties usually have a higher value than concession properties.

How Long Can You Stay in Nicaragua With Residency?

US, Canada, and UK citizens and citizens from the Caribbeans and Latin Americans have entry rights to Nicaragua. No visa is necessary, and visitation is permitted for up to 90 days within a 180 day period.

Since Nicaragua is a party to the Central American Border Control Agreement (CA-4), tourists can travel within the CA-4 countries for up to 90 days. Therefore, no entry or exit formalities at immigration checkpoints are necessary during the 90 days. The neighboring CA-4 countries include Honduras, Nicaragua, El Salvador, and Guatemala.

Foreign nationals who wish to obtain residency status have two routes:

Retiree Residency

Decree 628 is the Law of Resident Pensioners and Retirees. It applies to retirees over age 45 with an income of at least $600 a month. Monthly income can be social security or a pension plan.

Eligible retirees may apply to become a resident in Nicaragua for five years. The residency is renewable after five years. With residency, you can enjoy tax benefits like:

  • Bypassing out-of-country income tax
  • Duty-free import up to $20,000 USD on household goods
  • Duty-free import of a vehicle less than $25,000 USD

Investor Residency

Nicaragua’s Foreign Promotions Investment Law allows investors to obtain residency. Individuals who invest a minimum of $50,000 in business or real estate may apply for residency. So if you buy a house in Nicaragua for at least $50,000, you have the privilege of applying for residency.

You must apply for residency in person in Nicaragua and stay in the country for 30 days after applying. During the 30-day follow-up period, you will have obligatory visits with Nicaraguan Immigration officials.

How Do You Become a Citizen in Nicaragua?

After lawfully residing in Nicaragua for five years, you can apply for citizenship through naturalization.

Can You Finance a Home in Nicaragua?

Yes, it is possible to finance a home in Nicaragua. There are local banks that offer mortgages for qualifying buyers with residency. For non-residents, we can help you inquire about properties that offer owner finance.

How Much Does It Cost to Buy a House in Nicaragua in 2022?

Like any other real estate market, the cost of buying a house in Nicaragua can vary substantially. In any country, you will have a vast range of costs for houses. So, you might want to ask what is a reasonable price to buy a house in Nicaragua. Many factors will affect the price you can expect to pay when you want to buy a house in Nicaragua. You’ll need to consider the home’s location, type, and size and the amenities you expect.

While some million-dollar listings are in Nicaragua, you can find prime real estate for much less than that. You might find a great house for $25,000 USD on the lower end. Again, it all depends on what you want in a home. Some people have spent less than that on their homes.

Houses in larger cities like Managua, Granada, or Leon will cost more. However, while the average cost of a home will be higher in larger cities, you won’t find as many high-end neighborhoods with exclusive properties.

Another cost consideration is what type of community you wish to live in. You can expect higher-priced properties if you want to live in a community with a higher expat population. However, you’ll also find some top-end real estate options. For example, some places in Nicaragua have gated communities with mostly expat residents.

Next, consider the features and style of the home you want. Do you want a traditional Nicaraguan-style home? Or a contemporary design? Air conditioner? The style of home you choose will dictate what materials are used to build the home. All of the above are unique facets to address while determining how much it will cost you to buy a house in Nicaragua.

Wherever you look, whether beachfront or tucked away in a cozy neighborhood, the cost to buy a house in Nicaragua will be significantly less than in North America or Europe. For example, in San Juan Del Sur, you can find a luxury home in the “downtown” area within walking distance from amenities.

Is Nicaragua Real Estate a Good Investment?

Yes. Now is a great time to buy a house in Nicaragua, as real estate prices will continue to climb. Buying now is a great way to secure your forever home or expand your investment portfolio. Here are a few more reasons why Nicaragua Real Estate is a wise investment:

  1. The real estate market in Nicaragua is still considered an emerging market. As such, the price to buy a house in Nicaragua is still comparatively low when you look at it from an international standpoint.
  2. Tourism is rapidly growing, which increases the value of your property. While Nicaragua has remained below the radar for a long time, it’s now one of the leading vacation destinations for surf and salt life.
  3. There are plenty of incentives for retirees. One example is the duty-free import of household goods, vehicles, and building materials.

How do I get to Nicaragua?

You can take a flight to the capital city Managua, where you’ll land at Augusto C. Sandino International Airport (MGA). COPA and TACA are two primary airlines that offer flights from neighboring capitals like San Jose and San Salvador. However, you can fly directly from major US cities like Atlanta, Miami, or Houston.

Since Nicaragua shares a border with Costa Rica and Honduras, the other option is to enter by land from either country. To the north, there are two main border crossings with Honduras. On the south end lies the Costa Rican border. There are buses for cheap fares that run from Managua to Granada or Rivas. From there, you can take another bus to your location. Or, you can take a cab directly from the border to your destination.

As of October 2022, most incoming and outgoing traffic to Nicaragua is through the Penas Blancas/Costa Rican land border. You can fly into San Jose or Liberia and travel to the border, or vice versa.

Key Takeaways if You Want to Buy a House in Nicaragua

Better Quality of Life

These days, people are more driven to upgrade and authenticate their lifestyles. Families and individuals who wish to buy a house in Nicaragua are highly motivated by a better quality of life. Additionally, you can expect a lower cost of living. Especially with restrictions and regulations after the pandemic, more North Americans and Europeans are choosing to call Nicaragua home. Remote workers, business owners, and retirees come here to live a peaceful, laid-back life.

Sufficient Cash is an Asset

Buyers are spending more freely now, with lifestyle at the forefront of their incentives. Whereas buyers used to be driven primarily by investments, we’re seeing a shift to a value-centered movement. This movement makes people ready to pay more to ensure comfort in their new family home.

More people are also starting to buy a house in Nicaragua with all-cash offers. Simultaneously, sellers are becoming more inclined to agree to owner financing, which opens up many more options for all types of buyers and sellers.

Long-term Rentals Are Becoming Sparse

Many individuals and families prefer to rent long-term before deciding to buy a house in Nicaragua. Some are waiting to find the perfect home, while others may not yet be ready to make a financial commitment. Many people want to live here but don’t have the funds to purchase property and thus only have the option to rent. With the influx of long-term rentals and tourists who stay longer than planned, inventory is limited. Additionally, the available rentals are primarily short-term. With travel restrictions lifting and the pandemic concerns phasing out, tourism is returning, inhabiting inventory even more.

Are You Planning to Buy a House in Nicaragua?

No matter who you are or where you’re from, if you want to buy a home in Nicaragua, we can help. Whether you want a more adventurous or peaceful life, there is something here for everyone.

We have helped countless families and individuals find their dream homes. Our exclusive listings are distinguished and varied. We have quiet abodes near the coast and high-end contemporary homes in expat communities.

Contact us today for more information or you can check out some of our Nicaragua Real Estate listings.

Nicaragua Real Estate - Emerald Investment

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