Making a home in the tropics is a tropical dream for many. With its stunning landscapes, beautiful beaches, and rich culture, Nicaragua has a lot to offer foreign property buyers. It’s no wonder the destination is growing in popularity for real estate.

Once you’ve decided to make the leap to buy, the biggest obstacle you need to overcome as a foreign investor is, no doubt, understanding the legal requirements to purchase your property. Daunting, isn’t it? And if you don’t speak Spanish fluently, it’s an even bigger hurdle. By working with the right local team, you can ensure the process is smooth and secure. Here’s everything you need to know for those next steps:

Why Buy Property in Nicaragua?

In case you’re still on the fence, here are a few reasons why Nicaragua is a great destination for property investment:

1. Affordable housing rates
   The affordability of property in Nicaragua makes the choice between this country and other Central American spots, such as Costa Rica or Panama, an easy one. From stunning beachfront properties to villas and commercial spaces in land, Nicaragua offers a wide range of property options at a fraction of the price of those more developed areas
2. The safest country in Central America
   Known for its low crime rate, Nicaragua experiences notably lower levels of crime than its neighboring countries like Honduras and Guatemala, where organized crime is much more prevalent. In fact, Nicaragua is even safer than its popular neighbour, Costa Rica, boasting a lower overall crime rate.
3. A growing economy
   Nicaragua has seen impressive growth in its economy, especially over the last decade. This has functioned to attract foreign investments in key sectors such as tourism, agriculture, and manufacturing. Additionally, Nicaragua's government has been busy working to improve infrastructure, public services and main roads.
4. Home to a tourism boom
   Thanks to its stunning beaches, volcanoes, and colonial architecture, it probably doesn't come as a surprise that Nicaragua has become a popular destination for tourists. As this industry grows rapidly, areas such as San Juan del Sur, Granada, and León are seeing significant investment. The result? An increase in demand for short-term rental properties. This means that now is the best time to invest in Nicaraguan real estate–especially in those tourist-heavy regions.

Read more about the reasons to buy property in Nicaragua in our latest blog here

Legal Considerations for Foreigners Buying Property in Nicaragua

Foreigners can legally purchase property in Nicaragua, but here’s what to keep in mind:

1. Property Ownership Laws: While Nicaraguan law allows foreigners to own property in most areas of the country, there are restrictions on owning property near the coast or borders. Foreigners are limited to owning up to seventy-five (75) hectares of land in these restricted zones and they must do so through a Nicaraguan corporation or partnership.
2. Land Title Verification: Be sure that the property you are buying has a clear and legal title first. It is essential to verify that the land is free of debts, liens, or other encumbrances before moving forward with any purchasing process. Hiring a reputable local lawyer–especially one who specializes in real estate law will help ensure nothing is amiss.
3. The Role of Notaries: In Nicaragua, a notary public plays a crucial role in the transfer of property. Once the property contract is signed by both parties, the notary will verify and register the deed at the Public Registry, ensuring that the property transfer is legally binding.

Steps to Buying Property in Nicaragua

Ready to take the leap? Here’s a step-by-step guide on how to buy property in Nicaragua. We do recommend you work with a local realtor for the following steps

1. Get to know the market
   Before making any purchase, it’s important to familiarize yourself with the Nicaraguan real estate market. Set up an appointment with a local realtor to help you look into areas you’re interested in, whether it’s a beach town like San Juan del Sur or a colonial city like Granada. By using a local realtor, you’ll get invaluable insights into prices, property types, and local amenities that vary by region.
2. Hire a lawyer, locally
   Engage a Nicaraguan lawyer who specializes in real estate transactions. They can help you navigate the legal complexities, including verifying the title of the property and ensuring there are no hidden liabilities. A lawyer will also help with drafting the purchase agreement and other legal paperwork. Your real estate agent will most likely have a trusted expert in their network, so make sure to check in with them before making any hiring decisions.
3. Obtain a Nicaraguan Residency or Tax ID Number
   While foreigners don’t need residency to pur ni chase property, you will need a Nicaraguan tax ID number (RUC). This number is required for all legal transactions in the country, including buying property. Your lawyer can assist in obtaining this number.
4. Make an Offer and Negotiate
   Once you’ve found the property you want, your realtor can help you in making an offer. Keep in mind that properties in Nicaragua are often priced lower than in other countries, so there may be room for negotiation. This is when your realtor’s breadth of experience and insight will provide you with a leg up (and could save you a lot of money in the long run).
5. Sign a Sale Agreement
   Once you and the seller agree on the terms, you will sign a sale agreement. This contract outlines the price, payment terms, and other relevant details. A lawyer will review the agreement to ensure that everything is in order and that your interests are protected.
6. Pay the Deposit
   Typically, you will need to pay a deposit when signing the contract. This amount is usually around 10% of the purchase price. The deposit will be held in escrow until the final transfer of ownership is complete.
7. Complete the Purchase
   The final step is to pay the remaining balance and transfer ownership. The notary public will handle the official transfer of the property title and register it with the Public Registry. After this, you will receive the official title deed.

If you’ve been browsing dream properties around Nicaragua, we suggest you take the time to book a consultation with a local realtor which you can do that here. There may be some incredible options you haven't even explored!