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Mortgages
Real Estate Financing in Mexico,
Latin America and the Caribbean
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Buing Real Estate in Venezuela
Legalities and OwnershipIn Venezuela, there are no limitations on
ownership of real estate for foreigners. They enjoy the same legal rights to
property as Venezuelan nationals.
In Venezuela a written pre-sales
agreement between the buyer and the seller is a common practice. Here, the
obligations are established between both the parties regarding amount of
payment, method of payment, time limit of contract, penalties, etc. In order to
buy property in Venezuela, the valid documents required are your passport and
your tourist visa. Next, you need to register with the tax authority of
Venezuela (SENIAT) and get a
R.I.F. (Registro de Información Fiscal).
Before investing one
should take a look at the legal history of the property. This can be done at the
Registry Office of the jurisdiction where the property is located. Every
municipal authority in Venezuela has a real estate database within its
jurisdiction that can be used to identify properties and their owners. The
Public Registry information is not computerized everywhere and in a majority of
the registries throughout the country, the information is handled manually. It
is very important to make sure that the person who is selling to you is the true
owner of the property as required by law in Venezuela. If that is not the case,
you must verify that the seller holds a registered Power of Attorney (POA)
(Poder in Spanish) to sell. In Venezuela, a down payment of 20 to 30
percent of the value of the property is required once you have entered into a
pre-sales agreement with the seller. A time period of 30 to 45 days is is the
typical time allotted by the seller to make final payment and finalize the
transaction.
You should hire a lawyer registered with the Colegio de
Abogados to get your buy/sell documents drawn up.
For registering
powers of attorney, there are two simple processes - (1) drawing up the document
and notarizing at a local notary public and (2) registering the POA with the
Property Registry of your area. When registering a power of attorney, you should
obtain at the same time the "apostille" through the notary public in your
country. (An apostille is an official document from your host nation required to
authenticate signatures to a document that are not signed in the presence of the
notary public in another nation.)
All documents must be translated into
Spanish language to be considered legally valid in Venezuela.
A property
sales tax is applicable on property with a high-declared value, which are often
paid by the buyer. This tax can be waived if you declare that this is your
primary residence.
To pay the tax, you need to obtain form No. 33
(declaración y pago de enajenación de inmuebles para personas naturales y
jurídicas) which is available at no cost from SENIAT. You can use this to
pay your taxes at most Venezuelan banks. You must also present this form to the
Register when transferring the title. You also have to pay 3% of the value of
the property to handle other expenses including closing costs. Once these steps
have been completed, you will receive the title of ownership.
Financial MattersIn Venezuela you will find mortgage banks, savings
banks, and "universal" banks that offer mortgages. The universal banks are those
that can perform all the operations according to the General Law on Banks and
Other Financial Institutions of Venezuela. Due to the crisis of 1994-1995 when
half of Venezuelan Banks were declared insolvent, financing options for real
estate have been tightened and are virtually non-existent for foreign buyers.
Any potential loans would require collateral and foreigners are generally only
considered for short-term loans. Moreover, the interest rates make borrowing
unaffordable rung as high as 35%. In majority of cases, buyers must pay for
properties in cash in the preferred currency, the U.S. dollar. A detailed study
about financing and loans in Venezuela is available here.
There is no regulated prevailing rate for
commissions for real estate brokers in Venezuela. The rates tend to be 3 to 5
percent of the total transaction which are paid by the seller. In general,
payments take place once the operation is realized, in accordance with the
service conditions established formally in the pre-sale agreement between the
buyer and the seller.
Other Important IssuesOnce you have purchased your property, you need
to transfer all utility billings and condominium charges to your name. For that
you need photocopies of your passport and title document.
The bills you
need to transfer:
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Catastro municipal taxes - impuestos municipales
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Seneca electricity company - servicio eléctrico |
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Condominio - building condo fees |
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Cantv telephone company - servicio telefónico |
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Hidrocaribe water service - servicio de
agua |
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