Venezuela: Guide to Buying Costs and Procedures

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Total transaction costs are high in Venezuela

How high are realtors' and lawyers' fees in Venezuela? What about other property purchase costs?

How difficult is the property purchase process in Venezuela?

Any foreigner can buy a property in Venezuela with just a valid passport, a tourist visa and a Registro de Informacion Fiscal (RIF). The RIF is a fiscal identification for all persons, and can be obtained for free by request at any Tax Administration office or the Servicio Nacional Integrado de Aministracion or through a lawyer. Foreigners may also buy indirectly, through local companies or through foreign companies.

When you have chosen a property, inform your real estate agent and apply formally with a written document (informe de la documentacion). Require the real estate agent to be present to assist in the negotiation and closing of the deal, including the mode of payment. The real estate agent should mediate in all negotiations between you, and the seller of the property.

It is best to negotiate with a seller through an "opcion a compra" or "option to buy", which legally "locks" both seller and buyer. The seller has to sell and you have to buy. It also "locks" the price. An "option a compra" usually requires a deposit of between 10% to 30% of the agreed selling price.

Buyers pay in advance all registration fees and legal expenses and the seller is obligated to deliver the property free of lien. A buyer is expected to pay in cash in advance in local currency from 1% - 3% , to handle everything up to and including closing.

After the final document has been signed, it is notarized by the notary public, and the buyer is now the legal owner, and the title or deed is handed over by the seller.

The Certificate of Encumbrances is not required by law but is usually practiced and requested by purchaser.

Fundamental Guidelines when buying a property in Venezuela by the Real Estate Chamber of Venezuela (Comision de Intermediacion y Asesoria Inmobiliaria de la Camara Inmobiliaria de Venezuela):

Financial Commission - If the deal is paid through credit, the buyer should see that the commission to the bank or other financial institution is cancelled.

Insurance - In the case of property acquisition through mortgage, there is a need for insurance against fire and earthquake. Insurance agencies normally charge a year in advance.

Lawyers' fees - When the purchase of property is through organizations such as the Organization of Savings and Loan (Entidad de Ahorro y Prestamo), it should be noted that its fees on financial commission already includes the fee for "documento de venta". When the purchase is through a Banco Hipotecario or "real estate mortgage bank", insurance company, or any financial society, the amount of writing the compra-venta varies depending on the price of the real estate.

Registry fees - According to the Law of Public Registry, registry fees are based on the value of the real estate and is paid on a Planilla de Liquidacion. The registry fees include stamps, photocopies, transfers and all these additional fees are paid in cash and are not given receipts.

Miscellaneous fees - Need to cancel other fees related to the compra-venta if it is in the contrato de opcion as agreed by both parties. Read carefully everything before signing.

Margarita Island

Margarita Island, a piece of paradise in the Carribean belonging to Venezuela, is very popular with foreigners. It lies off the northern coast of Venezuela, and is the most southerly of all the Carribean islands. Its location means that it is out of the hurricane belt and offers low humidity and low rainfall. A duty free status was granted in 1966 and then upgraded to free port status in 1976. Transport is via Caracas international airport, or by modern ferries.

The whole process of registering a property in Venezuela can be completed in around 33 days.

Footnotes to Transaction Costs Table

The round trip transaction costs include all costs of buying and then re-selling a property ' lawyers' fees, notaries' fees, registration fees, taxes, agents' fees, etc.

Currency:
Venezuela uses Venezuelan Bolivar. Exchange rate is at US$1 = VEB2,144 as of 05 June 2006.

Venezuela - more data and information

• How high are estate duties in Venezuela?

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