Roatan buyer's guide

Buying property in Roatan is an exciting investment opportunity that should be approached with confidence and assurance. By choosing to work with reputable Realtors and Notaries, you can trust that the process will be straightforward and tailored to your unique needs and budget. At Roatan Reef Realty, our team of experienced and knowledgeable professionals will ensure that you find the perfect property. We pride ourselves on providing comprehensive guidance and support throughout the buying process, so don’t hesitate to ask any questions or express any concerns you may have. Our comprehensive guide offers an overview of all the essential steps you need to follow when purchasing real estate in Roatan. With our help, you can be confident that you’ll get the best possible deal for your investment, making the most out of this incredible opportunity.

Purchasing Property in Roatan

Frequently Asked questions and things you should know

Purchasing Property

Are you planning to purchase property in Honduras and concerned about the complexities involved? Worry no more, buying a property in Honduras is easy. As an individual, as a foreigner, you can purchase up to 3000 square meters, which is approximately .74 of an acre of land. However, if you wish to purchase a larger piece of land or a home, the formation of a Honduran corporation is mandatory. Do not fret, this is a simple process that can be executed by a qualified lawyer at a cost of about $1,500.00.

Before you proceed with the purchase, it is important to have a good attorney who understands the documentation related to the property and corporations for a clear title for purchase. Your investment is important, hence, it is recommended to have a qualified Real Estate Broker, a Honduran Notary, and Lawyer to guide you through the process and explain the documentation involved. With these experts by your side, this process will be swift and hurdle-free.

The Purchase Process

If you are planning to purchase a property in Roatan, there are a few steps to follow. Once you have chosen the property that you are interested in, a Roatan Realtor will write up an offer to purchase. The offer will include a paragraph that will require an “earnest money deposit,” which will be 10% of the purchase price. After the acceptance of the offer, you will have to wire the earnest money to the Broker’s or Notary’s escrow account within five business days. The balance of the purchase price will be due at closing, which usually occurs within 30-60 days.

After reviewing the offer, the seller has the option to accept it, submit a counter offer or reject it. Once there is an agreement between the Purchaser and the Seller and the earnest money is received, closing can proceed in several ways. One option is to have the Purchaser return to the island for the closing and sign the papers in person. However, it is also common to appoint someone else (often your Realtor) to close on your behalf and accept title in your name through a limited Power of Attorney (POA) created by the Purchaser.

If a Honduran Corporation is being formed for the purchase, someone needs to be appointed to close on behalf of the Purchaser, (similar to a limited POA) in the articles of the constitution of the Honduran corporation.

At Closing

The process of transferring property ownership in Honduras involves the guidance of a professional lawyer who will draft a protocol that encompasses all necessary details of the transaction. The seller of the property will then sign the document and upon receipt of the purchase price, the ownership of the property is transferred to the purchaser. The purchaser or their representative will also sign the document, indicating their agreement to the legal terms of the sale and officially taking title to the property.

The final phase involves presenting the document to the public land titles registry for recording. This process may take some time, typically a few weeks, after which a new title will be issued to the purchaser, indicating their ownership of the property. The lawyer will take care of delivering the newly acquired title document to the purchaser or arrange for it to be sent via a reliable international courier. This detailed approach ensures that the change of ownership is legally sound, and the purchaser can be assured that they are the rightful owners of the property.

Purchaser’s Closing Costs

When purchasing a property in Honduras, it’s essential to consider the various closing costs that come with it. These expenses typically include the land transfer taxes charged by the Honduran government, stamp, bar, and registry taxes, as well as legal fees associated with the transfer of the title. These costs usually amount to 5-6% of the purchase price.

If the property’s size mandates the formation of a Honduran corporation or if it is required for owner financing, additional costs will be incurred. It’s worth noting that if a corporation is included in your purchase, and a competent attorney clears it of any liabilities, you might be able to lower your overall closing costs to around 4%.

Therefore, it’s crucial to budget appropriately for all the expenses that come with purchasing a property to avoid last-minute complications that could jeopardize the transaction.

Seller's Closing Costs

It is important to note that as a Seller, you have certain obligations to fulfill when selling your property in Honduras. Specifically, you are obligated to pay Capital Gains Tax, which is currently set at 4%, on any increase in the value of your property. This tax will be paid to the Honduran Government, along with your real estate sales commission. It is worth noting that these commissions will be used against your Capital Gains, but it is still important to factor them into your overall budget as a Seller.

Additionally, the Seller will be responsible to pay for a new survey and catastral for the property in Seller’s name/Honduran corporation and the current year property tax. By fulfilling these obligations in a timely and responsible manner, you can ensure a smooth and successful property sale in Honduras.

Financing

Financing may be provided by the Seller, guaranteed by the Purchaser through a mortgage registered against Purchaser’s title at closing or a Honduran corporation . The terms of the mortgage or owner financing package are part of the offer to purchase and therefore open to negotiation by Seller and Purchaser. The interest rates are usually higher than in the US (average is 6-7%) and require about 50% downpayment. The duration of the mortgage is usually in the area of 1-5 years, but may be longer. It can be structured in a way that gives the Purchaser lower monthly or quarterly payments with a balloon payment at the end of the term, or a short amortization that pays off the mortgage completely over the length of the term. Seller financing is generally intended to help the Purchaser secure the property today, allowing the Purchaser to fund the purchase on their own timetable and terms.

Susie Ebanks

Real Estate Agent

As a native islander and licensed realtor, I am thrilled to welcome folks in pursuit of their Caribbean lifestyle dream, a reality on Roatan and the entire Bay Islands! Whether your next adventure be about: new beginnings, investment, retirement, or part-time vacationer; our vibrant Mesoamerican coral reef, turquoise water, diverse local and expat communities, white sandy beaches, golden sunsets, lush tropical flora and fauna all awaits you on this tropical paradise. With five years of experience as a licensed realtor on Roatan, over 20yrs in sales management, nonprofit leadership, coupled with my fluency in Spanish and English, I am fully equipped to help you find and purchase your dream island property or sell an existing one. Much has changed on Roatan since my family migrated to New Orleans, USA in the mid 80s in pursuit of a better life and where I went on to receive my undergraduate degree from Tulane University. I am ever so grateful for the opportunity those changes have afforded me to move back home, doing a job I love, and especially being actively involved in affecting positive changes in island communities.

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Fernando Macpui

Honduran, originally from the capital city of Tegucigalpa, Fernando Macpui has lived in Roatan for the past 15 years. Fernando came to the island shortly after graduating from university and he instantly fell in love with the island landscape and its amenities. Since then, Fernando has established a strong connection and involvement within the community and is proud to call Roatan his home. Speaking of himself: “I have great communication skills and work well with others. I’m a great choice because I’m honest, trustworthy and most importantly, I care! With that in mind, I take pride of everything I do, especially when it comes to representing someone else’s interests.”