Nicaragua Buying Property in Nicaragua

Buying Process, Fees & Taxes

Can foreigners buy property in Nicaragua?

Yes, foreigners can buy property in Nicaragua and the Government of Nicaragua welcomes investment from overseas buyers. There are practically no restrictions on foreign buyers acquiring real estate in the country and the buying process is the same for citizens and foreigners alike. However, foreign buyers are not permitted to purchase land within 5km of the international borders and require a waiver permit to purchase land within 5 to 15km from the international borders. Land that lies within 50 meters of the high tide mark is considered the property of Nicaragua and its citizens and is unavailable for purchase.

Buying process

Buying property in Nicaragua is a relatively simple process, which typically involves the following steps:

1. Begin your property search.
2. Find your perfect property and make an offer.
3. Once you have signed a contract for sale, your attorney should conduct due diligence including a title search and property survey.
4. Your attorney will then draw up an Escritura (Title Deed) and witness the signing by both you and the seller.
5. Once payment has been transferred your attorney should register the property in your name at the Cadastral Office.
6. Pay all required taxes and fees.

Fees & taxes

Transfer Tax

Real estate transactions in Nicaragua are subject to transfer taxes ranging from 1% to 3% of the purchase price. This tax functions as an advance payment on income tax obligations. Although buyers often agree to cover this cost during negotiations, it remains technically the seller’s legal responsibility under Nicaraguan tax law.

Property Tax

Nicaragua imposes an annual property tax (IBI) calculated at roughly 1% of the municipal assessed value. Local governments determine property valuations through their cadastral systems, which typically establish values significantly below actual market prices at the time of purchase.

Certain properties qualify for tax exemptions, including urban properties valued under $40,000, rural homes on parcels of 2.4 acres or smaller, and agricultural land covering up to 51 acres.

Residency & Citizenship

How long can a foreign citizen stay in Nicaragua?

Citizens of the USA, Canada, UK, and many countries in the Caribbean and Latin America are permitted to visit Nicaragua without a visa for up to 90 days within a 180-day period.

As Nicaragua is party to the Central America Border Control Agreement (CA-4) tourists can travel within the CA-4 countries (Honduras, Nicaragua, El Salvador and Guatemala) for up to 90 days without completing entry and exit formalities at border immigration checkpoints.

How do you become a resident of Nicaragua?

Nicaragua offers foreign nationals who would like to live in Nicaragua 2 optional routes to obtaining residency status:

Pensionado (Retiree) Residency

Nicaragua’s retirement residency program provides a pathway to residency for individuals receiving pensions or retirement benefits who seek to relocate permanently. This option has gained traction among expatriates from North America looking for a cost-effective lifestyle in a tropical destination combined with tax advantages.

Qualification Criteria:

• Age requirement: 45 years minimum
• Monthly pension income: $1,000 minimum from verified sources (social security, retirement funds, or pension plans)
• Financial documentation proving five-year income continuity
• Clean criminal record verification from home country
• Medical clearance issued by Nicaragua’s health ministry
• Each dependent requires additional $150 monthly income proof

Program Advantages:

• Renewable five-year residence authorization
• Zero tax liability on overseas income
• Import allowance: $20,000 household items duty-free
• Vehicle import privilege (one car up to $25,000 value, tax-exempt)
• Public health system access
• Naturalization opportunity after five years’ continuous residence

Rentista (Investment Income) Residency

This residency program provides a pathway to residency for individuals with significant unearned income streams from capital investments, property portfolios, or financial instruments. It particularly suits younger applicants who lack pension qualifications but possess substantial passive income.

Qualification Criteria:

• Monthly passive income: $1,250 minimum threshold
• Income sources must be non-employment (dividends, rental income, investment returns)
• Five-year financial stability documentation required
• Apostilled bank statements and income verification
• Police clearance from current residence country
• Each family dependent adds $150 monthly income requirement

Program Advantages:

• Five-year residence permit with renewal option
• Foreign income tax exemption
• Territorial taxation system benefits
• Family inclusion (spouse and minor children)
• Permanent residence track leading to citizenship eligibility
• Unrestricted travel privileges without exit documentation

Investor Residency

Nicaragua’s capital investment residency program provides a pathway to residency for foreign investors willing to contribute meaningfully to the local economy. Recent policy changes emphasize active business engagement over passive asset ownership.

Qualification Criteria:

• Capital commitment: $30,000 minimum in approved economic activities
• Investment must generate measurable economic impact (job creation, business operations, or sanctioned agricultural ventures)
• Corporate structure establishment within Nicaragua’s legal framework
• MIFIC investment registration documentation
• Ongoing investment maintenance throughout residency term
• Compliance with government oversight and reporting protocols

Program Advantages:

• Immediate five-year permanent residence status
• Flexible presence requirements (one month yearly recommended)
• Family coverage including spouse and dependents
• Territorial tax structure benefits for foreign earnings
• Accelerated citizenship track (two years with 180+ day annual presence)
• Full business operation privileges within Nicaragua

How do you become a citizen of Nicaragua?

Individuals who have lawfully resided in Nicaragua for 5 years can apply for citizenship by naturalization.