The 4 most common forms of ownership of Real Estate in Guatemala

Buying  as a foreigner in Guatemala…

Guatemala is a new destination for retirees or investors and you will find out that a lot of places offer great deal. From Guatemala City, the modern one, to the beautiful Colonial Antigua Guatemala, without forgetting Rio Dulce the tropical, as well as Lake Atitlan the living mayan culture  of the high lands.

All these areas  offers real estate properties that are great for vacation rentals or to just retire in style.

What many people do not realize when they make the decision to buy real estate in Guatemala  is that the process and rules may be very different than what they are used to.
The general say  : “It is never a good idea to make a significant investment in real estate unless you understand all of the things that are involved and that have to be done” is good as well for Guatemala. Particularly if you are not used to invest outside your own country and if on top of everything don’t speak the local language. Before buying in any country it is highly recommended to get to know the country and what it means to be owner…  And it is fundamental to know what  to expect and what the process is for buying real estate in Guatemala when you are a foreigner. Look into facebook group to get a feel of the issues the expats bump into.. Like this one for  Expats living in Guatemala

In Guatemala you will encounter most probably these four forms of owning a property.

The most common one is what we call

Rights of posesión or squatters rights

They are rights acquired over times and they can be sold and acquired. Now these kind of properties are very difficult to be guaranteed particularly when you buy raw land... Now if you buy a house on a land with rights of possessión your security is higher as you can show continuous  and undisturb ownership. Acquiring rights of possessión doesn’t prevent you to comply with other laws like the one we discuss here. As if your land is in 3.5 kms from the ocean shore line, 200 ms of a lake, 100 ms of a navigable river you have to get a leasing contract with the government.
Be careful when buying on any waterfront that the squatters rights have not been transformed into an OCRET contract and the seller is just trying to scam you.

The National Reserve of the State called or “las áreas de reservas del Estado” - OCRET

Under this category foreigners can’t purchase the property as the land belong to the Guatemalan State. But you can lease it. The lease are for thirty years and want up to renewal you are the one to confirm you want to renew it. It is not up to the government to say no. It is clearly written in the contract. It says that you are required six months prior the termination of the contract to manifest by writing that you want to renew it.
You lease the land and you own the improvements you are making on it.. You have all the rights of ownership and can sell your house and the rights of the contract or pass it to your heirs in a will.
When buying the rights of a contract you will have to pay twelve percent of government taxes.

Deeded properties

These are the most secure you can acquire as they are garanteed by the government by keeping a national registry (actually two of them). You find them mostly in cities and in big farming areas. Before buying a titled land  a certificate from the Registry is required to show if the property doesn’t suffer any mortgage or lean. They are more valuable and are taxed differently than the squatters rights. At the moment of buying a titled property you will have to pay 12% if it is the first sell for example of a new development or 3% of taxes stamp when it is a second sell.
Buying a  property with a deed it takes less than 6 months to have it registered in your name.

Communal Land

A very rare situation. In Guatemala some land are own collectively by the indigenous population particularly in the Highland. Called ejidos municipales , they are extensive size of territory that has been given to the mayan population over times for different reasons. The problem with them is that very often they are not properly registered in the  National Registry of Land. So you might be buying a piece of land  which might be challenged in the future. In Lake Atitlan, Santiago Atitlan is a communal land titled. But at the moment (08-2017) they are no instrument that can confirm the relation between  the rights of possession of the owners and the community.

In Guatemala barely 20% of the territory is  surveyed by the government. It is in process but it is a slow process..

The Buying Process

There are several source to find real estate in Guatemala as any other countries.
It is strongly recommended to work with a legally authorized real estate agent as they know better the market and should speak english in order to help you understand what will happen. Prices are almost  always negotiable. Before making an offer check what is in the market in the area to give you a sense of what you are betting on. Once the price is agreed on, unless you have cash on hand immediately available, a down payment of 10% is paid by the buyer.

No permit are required to own a property in Guatemala by a foreigner.

Once the buyer has the funds ready the buyer and the seller meet at the buyer notary. He will have checked the legality of the papers proving the ownership of the land. There is no escrow in Guatemala as you can find it in the US so it is strongly recommended for the buyer to open a bank account to transfer the money to his account. It makes the closing much easier. But sometimes the lawyer- notary can do the escrow.

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