Saturday, October 12, 2013

Honduras Real Estate and Procedures for Property Purchase in Honduras

The economic growth of Honduras has been very slow for long but recent years have witnessed an average growth rate of 7% per annum, one of the largest among Latin American countries. Still, the distribution of wealth had been highly polarized. Honduras has been ranked by the World Bank as the third poorest nation in the entire Western Hemisphere, next only to Haiti and Nicaragua. Abut 50% of the population are estimated to live below poverty line. Unemployment rate is above 25%. Further, the mountainous country does not have significant plain lands to offer lucrative prospects in Honduras real estate for sale or Honduras rentals.

In spite of this problem, the narrow plains lying along the coasts and the Sula valley situated in the northwest region of Honduras are heavily populated and provide investment opportunities to international real estate investors due to the low prices of land and properties. The Honduras scenario is coming to the attention of international investors only now, particularly the areas of Roatan, La Ceiba, Guanja, Utila, etc. that have good potential for international developers and property owners. The Honduras real estate for sale or Honduras rentals are available in plenty at cheap prices in these regions, whether they are mountain villas, beachfront homes or resorts, quaint village houses, or large plain lands waiting for development.

One major advantage is the favorable property ownership laws and regulations of Honduras. The regulations revised and published by the Government at the end of 1991 allow foreigners to purchase properties up to 3,000 sq. m. or three-fourth of an acre without any restrictions. A couple could buy 1½ acres jointly but the owners must build on the property within 3 years. For international investors intending to buy more than 3,000 sq. m., the legal option is to form a corporation registered in Honduras. Any local lawyer would help the overseas investors form such a corporation, which would cost between $1,000 and $2,000. Since all the documents must be written in Spanish only, the lawyer should be reliable and an expert in both Spanish and English. When the corporation is registered, the foreign investors would have all the rights of average Honduran citizens for purchasing Honduras for sale or Honduras rentals. It is necessary to ensure that the Honduras real estate listings considered by foreign investors have clear legal titles. The lawyer would be able to review the documents on this crucial aspect.

Apart from the price of the property and the corporation formation costs, the closing costs range between 6% and 10%. These costs include the land transfer taxes, stamp duties, registry taxes, bar and legal fees, etc. If the international real estate investors deal through local agents, they would charge around 10% as commission but this is usually paid by the seller. Annual property taxes are quite low. Hence, Honduras real estate listings are highly attractive propositions for international investors.

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