Building your Citadel in El Salvador is easier than you think! Here we break down the process into a few easy steps and help you get started:
SITE SELECTION
Buying land in El Salvador is relatively easy, especially when compared with other countries in Latin America. The only restriction on foreigners buying land is that if the land is rural, the use of the land must be industrial. Industrial is a broad term that includes designing, building, optimizing, managing and/or operating equipment for those purposes; typically predesignated as acceptable for industrial uses, like manufacturing or distributing a product. To ensure your use case is covered, you’ll want to consult with a Salvadoran attorney specialized in that area. However, if you become naturalized in El Salvador, then no restrictions apply.
Regardless of what type of land you buy, you are generally free to develop it as you see fit, but should carefully review not only the registration status of the property but also become familiar with the purchase process outlined by the Instituto Libertad y Progreso, a state-owned registry that clearly identifies the owner of the property. The accuracy of this registry, which is currently being computerized, makes property insurance obsolete. Additionally, the services of the ILP, which include Administration of Land Legalization Programs, Diagnostics, Legal Studies, Registry-cadastral Studies, Topographic Measurements, Technical Inspections, Registration of Documents, and Ratings of projects of social interest are free. You are certainly free to procure some or all of these services from the open market (and there are cases where that is preferable), but be aware that for most purposes, it isn’t necessary. If you want to speak with the ILP in person, they have a single office in the Loma Linda Shopping Center, Local 1-B, San Salvador.
Other services that might be of interest to you when researching a site are drone photography and specialty topographic services (we have community partners that offer this service).
Once you find the property you want to buy, an Offer to Purchase is created. A Salvadoran attorney helps the buyer through the due diligence process. They prepare and notarize the Sales Purchase Agreement and facilitate the payment of the registration fee (Derechos de Registro por Venta de Inmuebles, also known as the Alcabala), which is 0.63% of the property price. An additional 3% over the excess of US$28,571.43 should also be paid as the Transfer of Real Estate Tax (Impuesto de Transferencia de Bienes Raices). After this is complete, the deed is presented to the Registry office, and finally to the Municipality.
The whole process of registering a property can be completed in about a month. If you want to estimate your taxes, you can use this handy tool.
And remember, the owner pays municipal fees (garbage/etc) on a monthly basis, these may vary on the location but in any case are around US $ 3 to US $ 10 per month.
Understanding units of measurement:
As you research properties, remember a few basics – if the property sits at a lower elevation, it will be hotter and muggier year-round. Places like the coast, inland valleys and areas in the far eastern part of the country (like the future site of ‘Bitcoin City’) fit this description. The highlands in the western and northern parts of the country tend to be much cooler and less humid. The capital, San Salvador, sits roughly between the two extremes.
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