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Ecuador – Property Taxes

When buying or selling a house in Ecuador, there are several taxes and fees that must be taken into account. These include:

  • Property transfer tax: A tax on the transfer of property, typically paid by the buyer. The rate varies depending on the value of the property, and ranges from 0.5% to 1.5%.
  • Notary fees: Fees for the notary public to witness and certify the sale. These fees are typically paid by the buyer and can range from 0.5% to 1% of the sale price.
  • Real estate agent fees: If a real estate agent is used, they will typically charge a commission of 2-3% of the sale price, which is usually paid by the seller.
  • Other miscellaneous fees: These may include fees for title searches, appraisal, and other services related to the purchase or sale of the property.

Property Tax in Ecuador

In Ecuador, property tax, also known as “Impuesto Sobre Bienes Inmuebles” (IBI), is a tax on the value of real estate. The tax is based on the cadastral value of the property, which is determined by the local government. The rate varies depending on the municipality and the type of property, but typically ranges from 0.1% to 0.2% of the cadastral value.

Capital Gains Tax (CGT)

in Ecuador

In Ecuador, capital gains tax, also known as “Impuesto Sobre Ganancias” (ISG), is a tax on the sale of assets, including real estate. The tax rate is 20% on the capital gain, which is the difference between the selling price and the purchase price of the property.

Inheritance Tax

and Gift Tax in Ecuador

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In Ecuador, there is no inheritance tax or gift tax on the transfer of property.

Tax on Property Income

in Ecuador

In Ecuador, property income tax, also known as “Impuesto Sobre la Renta” (ISR), is a tax on rental income from property. The tax rate is 25% on the net income from the property.

Tax Advantages in Buying a House in Ecuador

In Ecuador, there are several tax advantages for homeowners. These include:

  • Tax deductions for mortgage interest: Homeowners can deduct the interest paid on their mortgage from their taxable income.
  • Tax deductions for property repairs and maintenance: Homeowners can deduct the cost of repairs and maintenance on their property from their taxable income.
  • Tax exemptions for first-time home buyers: In some cases, first-time home buyers may be eligible for a tax exemption on the property transfer tax.

It’s important to keep in mind that tax laws and regulations are subject to change and may vary depending on the specific circumstances of the property purchase or sale. It’s always a good idea to consult with a tax professional and/or lawyer to understand the most current tax laws and regulations.

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