We’ve covered the costs for sellers in Roatan, so now let’s turn to buying. Here’s some Roatan real estate information for buyers so you feel prepared for the journey ahead…the journey that ends with your Caribbean island home dream coming true!
Roatan Real Estate Information for Buyers
The first things to consider when buying real estate overseas are the legal questions. Can you purchase land or real estate as a foreigner? Do you require residency? What legal implications are there?
In Honduras, foreigners are able to purchase up to 3,000 square meters (approximately 0.72 acres) of land within 40 kilometers of the country’s borders or coastlines. That makes it easy in Roatan since you’re never that far from the sea!
If you want to purchase a property that exceeds the size limitation, you will have to form a Honduran corporation in order to do so. It’s not a complicated process and I’m happy to connect you with a reputable attorney to discuss your options.
Obtaining Honduran Residency
When it comes to buying real estate in Roatan, you have a few options to consider with residency. If you intend to reside here full-time, then obtaining your Honduran residency is obviously recommended.
If you are purchasing Roatan real estate for a second home or vacation home, then you might not require residency.
If you hold a Canadian, US, or EU-member country passport, you’re likely to be allowed to visit Honduras on a tourist visa for up to 90 days at a time. You won’t need to apply for the visa in advance; it will simply be issued upon arrival.
If your goal is to buy Roatan real estate to spend your winters here as a snowbird, then you can easily plan to spend three of those cold winter months in paradise instead.
If, however, you want to move here as a primary residence, you should apply for your Honduran residency right away. I’m happy to help you connect with the right local attorney to facilitate that process.
About Roatan Real Estate
Roatan is fairly unique in the region in that we have a Multiple Listing Service (MLS), which allows all potential buyers the chance to peruse all available inventory.
Because of this online real estate search system, you can be in the comfort of your current home while scanning all the options here in paradise. It makes it so much easier for you to find your perfect dream home!
After you find that dream home, and after we’ve negotiated the price with the seller, I will get you an exact closing cost quote from the attorney of your choice.
In Roatan, buyers pay all closing costs and sellers pay capital gains and commissions. Closing costs and any corporation formation costs are all paid at closing.
Once everyone approves the contract, you’ll have up to 10 working days to wire the 10% earnest money deposit to the escrow account. After you wire that earnest money, and as long as the seller meets all contingencies and terms of the contract, if you back out from the sale you will lose your earnest money deposit.
So let’s make sure you definitely want that property!
While you wait for the closing, I’ll assist the attorneys in getting the catastral certification – or the satellite registered plot – as well as an updated survey, the paid tax receipts, title documents, etc., to complete the closing.
At least a week before closing, you’ll need to wire the final funds, including the attorney fees.
The closing is done after the attorney completes the title opinion search, confirming that the land has a valid title with no unanswered questions. If there are any issues on the seller’s side with the paperwork, they must be resolved to the attorney’s satisfaction.
A final important consideration is in regards to estate planning. With your investment undoubtedly being in another country from your relatives and heirs, you’ll want to make sure your legal considerations are all handled.
Roatan Real Estate Financial Information
As a property owner in Honduras, It’s important to note the financial obligations you’ll have. You’ll need an RTN Number (Registro Tributario Nacional or Tax Filing Number) to do any business or legal transactions in Honduras, including the purchase of property.
Again, I’m always available to help to ensure all your legal obligations are met during the buying process.
Another financial obligation is your property taxes, which are quite low here in Honduras. Generally speaking, you can estimate around $4 per $1,000 of property value per year for taxes. That property value is determined by the deeded value cost or the catastral value, whichever is greater. The catastral value is what the municipal declares the property to be worth.
Those property taxes are paid annually in August at the municipal offices in Oakridge or in Coxen Hole. You can get a discount if you pay your property taxes in the first quarter of the year.
Don’t forget about Capital Gains Taxes as you consider your real estate purchase in Roatan!
Another consideration is customs duties, which are typically around 40%, so calculate that into your costs if you wish to ship large items from home.
Finally, financing in Roatan might be different than what you’re used to back home. Roatan banks don’t usually make loans to non-residents, and North American banks don’t usually make loans on foreign properties.
What tends to happen in Roatan is that buyers will take a second mortgage back home, or they’ll buy a property in full in Roatan after the sale of property back home.
Only you can know your financial situation, but I am more than happy to advise based on common practices in Roatan. Feel free to contact me any time.
If you’re ready to invest in your Caribbean island dream home, take a look at available properties on the Roatan MLS, or just get in touch and tell me your wish list. Let’s make that dream a reality!