Closing Costs in Ecuador

February 23, 2018

In Ecuador, traditionally, the buyer is responsible for all closing costs of a real estate transaction with the exception of any capital gains taxes, which are the responsibility of the seller.

 

Closing costs usually amount to 2-3% of the sales price.

 

The items constituting closing costs are; transfer tax, notary fees, property register fees and legal fees.

 

Normally the buyer hires an attorney to handle the closing.  The attorney acts as legal counsel for both parties – the seller generally speaking does not have their own legal representation.

 

The transfer tax is 1.1% of the sales price (or assessed value, whichever’s higher) ­– this constitutes the largest portion of the closing costs.

 

The notary fees are on a scale ranging from .15 of the monthly minimum wage to 20 times the monthly minimum wage. 

 

Here are a couple of examples:

 

For a property sold (or assessed) at 90,000 the notary fee is .8 of one month’s minimum wage – or at 2018’s minimum wage of $308.80.

 

For a $250,000 property the notary fee is equal to two months basic salaries, currently $772.

 

The notary fee for a $500,000 property is calculated at 4 basic salaries, currently $1,544.

 

As you can see the notary fee is not insubstantial.

 

The Property Register fee is also on a sliding scale.  Up to $200,000 (sales price) costs between $15 and $250 to inscribe the deed.  Over $200,000 is calculated at .2% (.002) of closing price.

 

So for a $500,000 property the Property Register would charge $1,000.

 

Legal fees range from $300-$600 (in our region) depending the attorney and how involved the closing is.

 

The above scenarios assume a straightforward closing.

 

Should there be terms involved, making a sales contract necessary, the notary fee doubles as the ‘Promesa de Compraventa’ must be notarized and the cost is calculated based off of the value of the contract.

 

Here are a few closing costs scenarios based off of today's costs (remember the assessed value may be higher than the actual sales price – fees are calculated based off of whichever’s higher):

 

Closing Price: $50,000

Transfer Tax: $550

Notary Fee: $193

Property Register Fee: $100

Legal Fees: $300-$600

Total ~ $1,300

 

Closing Price: $100,000

Transfer Tax: $ $1,100

Notary Fee: $521.10

Property Register Fee: $150

Legal Fees: $300-$600

Total ~ $2,200

 

Closing Price: $250,000

Transfer Tax: $2,750

Notary Fee: $772

Property Register Fee: $500

Legal Fees: $300-$600

Total ~ $4,500

 

Closing Price: $500,000

Transfer Tax: $5,500

Notary Fee: $1,544

Property Register Fee: $1,000

Legal Fees: $300-$600

Total ~ $8,500

 

Closing Price: $1,000,000

Transfer Tax: $11,000

Notary Fee: $3,860

Property Register Fee: $2,000

Legal Fees: $300-$600

Total ~ $17,300

 

 

 

 

 

Please reload

Featured Posts

How to Apply for a Resident Visa in Ecuador

January 24, 2018

1/2
Please reload

Recent Posts