In Nicaragua registration and transfer taxes are based whatever price is higher between the “assessed value” of the property and the stated purchase price on the contract. As this value will not be known until after closing, an initial estimate of the transfer tax and registration fee is normally calculated on the full purchase price.
While the law in Nicaragua indicates that transfer taxes are paid by the seller, standard practice varies from location to location. In San Juan del Sur for example it is common practice for the buyer to pay the transfer tax, but this can be a negotiation point. Registration and IMI taxes are normally paid by the buyer.
Seller’s are responsible for paying the annual property taxes the last time they were due. Here’s a breakdown on closing costs:
- Transfer tax: 1% for properties priced below $50,000; 2% for properties priced from $50,000 to $100,000.00; 3% for $100,000 to $200,000 and 4% for $200,000 and higher.
- Registration tax: 1% (capped at $30,000 Córdobas or approximately $1,020 US dollars)
- IMI tax: 1% (for purchases in San Juan del Sur and certain other municipalities)
- Registration administration fee: $200
If you’re reading this and you haven’t read through the content on our Buyer’s Learning Center, then we highly recommend checking it out. Click here to view answers to Frequently Asked Questions about purchasing property in Nicaragua.