Obtain a non-encumbrance certificate (“Libertad de gravamen”) from Land registry
Agency: Land registry (Registro Público de la Propiedad Inmueble y Mercantil)
The non-encumbrance certificate (“certificado de libertad de gravamen”) is an official document that lists all encumbrances tied to a particular immovable property, and the successive list of owners of that property since its first annotation or since the time that the petitioner requests. The certificate must be obtained by the seller before before notarizing the sale and purchase agreement. Additionally, anyone can request a “certificado de historia registral” (cost NIO 150 + NIO 50 for every additional past transaction), which lists all previous transactions related to the property, and therefore contains the list of all owners since its first registration.
Time and cost: 5 days, NIO 150 (NIO 100 (simple non-encumbrance certificate) + NIO 50 (for annotation of last property transfer))
Obtain tax clearance from the Municipality (Solvencia Municipal)
Agency: Municipality
A tax clearance certificate (“Solvencia Municipal”) must be obtained by the seller from the municipality. The registered time of 1 day assumes that the seller is up-to-date with tax payments on the property, and that he pays a fee of NIO 20. If he were to wait till the next business day to obtain it, it would be free of charge. This certificate is valid for one year.
Time and cost: 1 day, NIO 20
A notary prepares and signs the public deed
Agency: Notary
A notary public prepares the sale and purchase agreement and notarizes it as a public deed. The preparation of the deed is an exclusive act of the notary. The notary will review all past transactions from the record book on the Land Registry with the documents obtained above, to verify the ownership of the property. Additionally, he will request the (i) non-encumbrance certificate; (ii) tax clearance certificate; (iii) cadastral certificate; (iv) cadastral valuation; and (v) payment receipt of the Property Transfer Tax. In practice, the notaries estimate their fees for this type of contract based on a percentage of the property value, which varies between 1.5 and 2% according to agreement between the parties and notary.
Time and cost: 2 days, NIO 54,712.92 (1.5 – 2.0% of property value (notary’s fees))
Obtain the Cadastre certificate at INETER
Agency: National Cadaster (Dirección Catastro Físico del INETER)
INETER is the national cadaster and is in charge of surveying the land and keeping a database of plots and boundaries. This certificate is necessary to obtain the cadaster valuation at the DGI
Time and cost: 14 days, NIO 500
Obtain Cadastre valuation at the DGI
Agency: Fiscal Cadaster (Catastro Fiscal, Dirección General de Ingresos)
Parties must obtain the Cadaster Certificate and request a valuation from an inspector. In practice, the Cadaster requires a special power granted to notaries or any other person when the interested parties cannot realize this Procedure. The parties can go to the Cadaster directly, in which case they do not need to present a special power. The Cadaster requests to see original property title (of the Seller). In case a special power is needed, the costs rise about NIO 2,000 as the fees for the person who will go to the Cadaster, and NIO 1,000 for the notary who will previously authorize and issue the special power.
Time and cost: 18 days, NIO 50
Inspector visits property to assess value
Agency: Fiscal Cadaster (Catastro fiscal – Direccion General de Ingresos)
After the cadastral certificate is obtained, an inspector visits the property to assess the value. In practice, one picks up the inspector and drives him/her to the property. It will take the inspector about one week to write the report on the value.
Time and cost: 2 days, NIO 20
Payment of Income/Transfer Tax
Agency: Tax agency (Administracion de Rentas – Direccion General de Ingresos)
The Income/Transfer Tax to the Tax Administration Office depends on the Cadaster value of the plot. The Cadaster value generally is not the same as the market price. For payment of transfer taxes, the fiscal authority takes as a base of calculation the highest value between the sale price in the public deed of purchase or the Cadastral value. Then, according to the value, a different rate will apply (the tax follows a progressive scheme).
Time and cost: 1 day, NIO 93,817.57
The legal basis for the percentage to be paid is Art. 87 ‘Alicuota del impuesto’ of the Tax Covenant law Number 891 of 2014, reformed with Article 1 of Ley No. 987 “Ley de Reformas y Adiciones a la Ley No. 822 Ley de Concertación Tributaria” in force since February 28, 2019 (Gazette No. 41):
- 1% for properties with a value between USD 1.00 and USD 50,000.00,
- 2% for values between USD 50,000.01 and USD 100,000.00 and
- 3% for values between USD 100,000.01 and USD 200,000.00 and
- 4% for values above USD 200,000.01 to USD 300,000.00 and
- 5% from USD 300,000.01 to USD 400,000.00 and
- 6% from USD 400,000.01 to USD 500,000.00 and
- 7% from USD 500,000.01 to any amount higher
Fees of NIO 4 + 2 stamps of NIO 10 need to be paid to make the payment.
Apply for registration of the public deed at the Land Registry
Agency: Land Registry (Registro Público de la Propiedad Inmueble y Mercantil )
Parties submit the public deed at the Land Registry for registration. The fee for this procedure is calculated based on 1% of the cadastral value, with a maximum fee of NIO 30,000 and a minimum of NIO 100. This payment is made directly in the branch of a commercial bank that is located inside the Land Registry Office. The notary applying for registration will charge NIO 500 as fees. At submission, the request for transfer is recorded manually in books, signaling priority rights over the property. When finalized, the Land registry will write down in the original deed, the book and page where the transfer has been recorded. This document is then returned to the notary with all the other certificates provided. The Land registry operates with paper documents. However, deeds are being scanned by the Land Registry in Managua. In the rest of the departments in the country, records are not always accessible digitally. Newer transactions (less than 1 year) are not always digitized. Any person can access past deeds with computers at the Land registry at no cost. It is possible to track the status of the deed registration online through the website: www.registropublico.gob.ni/servicios/consultatramite.aspx.
Time and cost: 15 days, NIO 38,017.43 (1% of cadastral value (registration fee) + NIO 500 (Notary’s fees) + 20% of the registration fee for the expedited Procedure)
Apply for name change at Municipality
Agency: Municipal cadastre
The new owner should update the records at the municipal cadaster in order to update ownership records as to determine the new taxpayer for the Property Tax. It is not compulsory to carry out this procedure, but common in practice.
Time and cost: 1 day, no charge
