Buyer guide
Buying on Roatan as a foreigner: the 7 steps
Can a foreigner own property on Roatan? Yes, with rules. The people who get hurt here almost always skipped a step. Here are the seven, in order, with every cost an accountant would want to see, so your trip down is for deciding, not for learning.
The road, in order
Seven steps. No surprises.
Step 1: Budget and cash plan, before anything
- In my experience, local banks do not lend to foreign buyers. Most people pay cash, often from a line of credit on their home in Canada or the US.
- Add roughly 3 to 6% on top of the price for closing costs (see the cost sheet below).
- Leave room for the first year: furniture, repairs, the surprises.
Step 2: Short list from home
- Pick the kind of life first, then the area, then the property.
- A 20-minute call and video tours save you a wasted trip.
Step 3: Come and see it
- Come for a few days and see the areas on your short list. Come in the slow season if you can.
- Meet the people you will need: your lawyer, a property manager, an insurer. That is what a Discovery Weekend is for.
Step 4: Your own lawyer, who is also a notary
- Your lawyer, not the seller's. On Roatan you want one who is also a notary.
- They search the title at the property registry and check that the survey matches.
- Never buy "on possession": someone lives on it, but the paper is not clean.
- Title insurance exists here, but most people do not buy it. Ask your lawyer about it.
Step 5: Decide how you will hold it
- In your own name: one home, on up to 3,000 square metres, in an urban or tourism zone.
- Bigger, or more than one: through an approved tourism project or a Honduran company. Your lawyer decides which.
- Buying a lot? Sources say the house must be finished within 36 months, or a 20% yearly surtax applies.
- Buying a condo? Read the HOA rules before you fall in love, especially the rental rules.
Step 6: The offer, the deposit, and where the money sits
- Offer in writing, conditions in writing.
- Ask your lawyer exactly where your money sits, in writing, before you wire a dollar.
Step 7: Closing and registration
- The deed is signed in front of the notary.
- The transfer tax, about 1.5%, is paid fast: sources say within 3 days of the deed, or a 20% penalty.
- Then the deed is registered at the property registry. That is when it is really yours.
- Closing from home with a power of attorney: ask your lawyer whether it fits your case and which documents it needs.
After the keys
- A yearly municipal property tax.
- If you rent it out short term: tourism registration (IHT), a sanitary licence (ARSA), tax registration (SAR), municipal permits, and your HOA's rules.
- A property manager you trust.
The accountant's cost sheet
What you actually wire, line by line.
An example on a US$300,000 purchase. It is an illustration, not a quote. Print it, take it to your lawyer, and have them write in the real numbers for your property.
Transfer tax (impuesto de tradición)
- Rate
- ~1.5%
- On US$300,000
- ~US$4,500
On the higher of the price or the government's cadastral value. By law the seller's; by custom the buyer often pays it, so it is a point to negotiate. Sources say it is due within 3 days of the deed, or a 20% penalty applies. (Confirm with your lawyer.)
Property registry fee
- Rate
- ~0.15%
- On US$300,000
- ~US$450
A small base fee plus 1.50 lempiras per 1,000. (Confirm with your lawyer.)
Lawyer and notary
- Rate
- 1% to 3%
- On US$300,000
- US$3,000 to US$9,000
Ask for a written quote up front. Cheapest is not the goal. Clean title is the goal. (Confirm with your lawyer.)
Total closing costs
- Rate
- 3% to 6%
- On US$300,000
- US$9,000 to US$18,000
What most sources say, all in. One Roatan broker puts it around 5.2%. (Confirm with your lawyer.)
Honduran company setup (only if you buy through one)
- Rate
- flat
- On US$300,000
- a few hundred to ~US$1,300
Plus notary.
Survey
- Rate
- quote
- On US$300,000
- ask your surveyor
Get it in writing before you commit.
Building inspection
- Rate
- quote
- On US$300,000
- ask an inspector
Moving money from home
- Rate
- your bank
- On US$300,000
- exchange + wire fees
Ask your own bank for its rate and fees before the day you wire.
Your flights and stay for the visit
- Rate
- your trip
Municipal property tax, urban
- Rate
- ceiling ~0.35%
- Base
- of cadastral value
Unpaid property tax can follow the property to you, so your lawyer checks it is paid before you close. (Confirm with your lawyer.)
Municipal property tax, rural
- Rate
- ceiling ~0.25%
- Base
- of cadastral value
(Confirm with your lawyer.)
HOA fees, if it is a condo
- Rate
- varies
- Base
- by building
Ask for the last statements before you make an offer. (Confirm with your lawyer.)
- Capital gains taxRate: ~10%
(Confirm with your lawyer.)
- Seller does not live in Honduras: the buyer withholdsRate: ~4% of price
An advance on the tax. (Confirm with your lawyer.)
- ZOLITUR (Bay Islands free tourism zone)Rate: may be 4%
Ask your lawyer whether you qualify. (Confirm with your lawyer.)
Think about the exit on the day you buy. Accountants are boring like that.
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