Buying property in Ecuador as a foreigner

If you are not Ecuadorian and want to buy property in Ecuador, the good news is that the law does not put you in a separate queue. The Constitution (art. 9) says that foreigners in Ecuadorian territory have the same rights and duties as Ecuadorians, and the Civil Code (art. 43) states that the law makes no distinction between Ecuadorians and foreigners in acquiring and enjoying civil rights. In practice you buy with the same procedure as any buyer: certificates, the minuta, municipal taxes, a public deed (escritura pública) at the notary and recording in the Property Registry (Registro de la Propiedad).

Where a foreigner cannot buy

Two limits do single out foreigners. The first is in the Constitution (art. 405): foreign individuals and companies may not acquire, under any title, land or concessions in national security areas or in protected areas, as provided by law.

The second is in the Public and State Security Law (Ley de Seguridad Pública y del Estado, art. 40), which forbids foreigners — and Ecuadorian companies with one or more foreign partners — from holding, acquiring or receiving concessions of land in border security zones and in reserved security areas, except for the populated and urban spaces inside those zones. The same law (art. 39) defines the border security zone as the land strip of forty kilometres inland from the borders, a maritime strip of ten nautical miles and the corresponding airspace.

Art. 40 also exempts legally recognised marriages and de facto unions of Ecuadorians with foreigners that have lasted at least five years, and Ecuadorian companies whose foreign partners have been domiciled in the country for at least five continuous, uninterrupted years. Its regulation sets out how it applies.

Documents and signing at the notary

To sign the deed you identify yourself with your valid passport (or your Ecuadorian ID card, if you already have residence). The Notarial Law (art. 29, as summarised in the legal basis of the Official Procedures Guide page on special powers of attorney granted abroad) requires the public deed to be written in Spanish, to identify the people appearing and the act they perform, to be read before signing and, when needed, to have an interpreter or witnesses. If you are not fluent in Spanish, ask the notary well in advance how the interpreter is arranged.

Buying without travelling: the special power of attorney

If you cannot be in Ecuador on signing day, someone else can sign for you with a power of attorney. The Civil Code (art. 2020) calls mandate the contract by which one person entrusts the management of one or more matters to another. Ecuador's consulates grant special powers of attorney to Ecuadorians and foreigners abroad: according to the Official Procedures Guide they ask for your identity document, the summary or draft (minuta) of the document and the exact details of your attorney, and the fee is the one in the current consular tariff.

Draft the power precisely: which property, the maximum price, whether it covers paying the taxes, signing the deed and requesting the recording. If you would rather grant it before a notary in your own country, ask the Ecuadorian notary first which apostille or legalisation and which translation it will require to accept it; if in doubt, check with a lawyer or notary.

Step by step

1. 1

   Confirm you can buy in that zone

   Rule out that the property lies in a protected area, a security area or the border security zone outside its populated and urban spaces. The municipality can tell you the plot's land use.

2. 2

   Check the legal status at the Property Registry

   Request the certificate of encumbrances (certificado de gravámenes): it shows who owns the property, how they acquired it and whether it carries mortgages, prohibitions on sale or attachments. Confirm the seller is the owner or holds a sufficient power of attorney.

3. 3

   Check the municipal status

   Make sure the property tax (predial) is paid and ask for the appraisal certificate or cadastral record. The cadastral appraisal is the minimum base of the alcabala tax.

4. 4

   Have a lawyer draft the minuta

   The lawyer drafts the contract the notary turns into the public deed. If your attorney will sign, the minuta must match what the power allows them to do.

5. 5

   Arrange the payment and keep its records

   Agree in writing how and when the price is paid, and have it stated in the deed. Keep the transfer receipts: you will need them to prove the purchase and, if you apply, for the investor visa.

6. 6

   Pay the transfer taxes

   The municipality assesses the alcabala and, where it applies, the tax on profits and plusvalía. The notary cannot grant the deed without the payment receipts (COOTAD, arts. 537 and 560).

7. 7

   Sign the public deed

   Buyer and seller, or their attorneys, sign before the notary. Bring your valid passport or, if your attorney signs, the original power.

8. 8

   Record the deed and update the cadastre

   Recording in the canton's Property Registry transfers ownership: from that moment you are the owner. Then check that the property is in your name in the municipal cadastre.

Taxes and costs

As a foreigner you pay the same municipal transfer taxes as an Ecuadorian: the COOTAD levies the alcabala on transfers of real estate for value (art. 527) and, when an urban property is sold at a gain, the tax on profits and plusvalía applies (art. 556). On top come the notary's and the Property Registry's fees and the lawyer's fees, which depend on each canton and each professional: to know what you will pay, check with a lawyer or notary and ask the municipality for the assessment.

If you will rent the property out, rental income is reported in your income-tax return; check your obligations with the SRI, Ecuador's tax authority. And if one day you sell and want to send the money abroad, bear in mind that the Currency Outflow Tax (Impuesto a la Salida de Divisas, ISD) is levied on transfers of currency abroad; the SRI publishes the current rate and the exemptions, so confirm them with the SRI or an accountant before moving the money.

The purchase and the investor visa

Buying a property does not give you residence by itself, but it can support an application. The temporary investor residence visa granted by the Foreign Ministry (Cancillería) accepts, as one of its special requirements, the deed of sale of a property located in Ecuador, showing you as the owner, recorded in the canton's Property Registry and with a stated value of no less than one hundred unified basic salaries (salarios básicos unificados).

It also asks, among other requirements, for a passport valid for at least six months, the criminal-record certificate of your country of origin or of residence for the last five years (translated, apostilled or legalised) and proof of lawful means of support. You apply online on the Foreign Ministry's visa platform and, according to the Official Procedures Guide, the visa is valid for two years. Requirements and fees change: check the official page on the day you apply.

Mistakes to avoid

• Buying rural, border or protected-area land without first confirming that the law allows you to acquire it.
• Handing over money against a private document: a sale of real estate is not complete without a public deed.
• Granting a vague or generic power of attorney, or one the Ecuadorian notary will reject for lack of an apostille or translation.
• Forgetting to record the deed in the Property Registry: until then, the property stays in the seller's name.
• Assuming the purchase gives you residence: the visa is a separate procedure with its own requirements.