Selling A Property In Ecuador

How to Sell Your Property in Ecuador: A Step-by-Step Guide

Selling real estate in Ecuador is unique because the country uses the US Dollar, which eliminates currency exchange risk for many international sellers. However, the process is highly formal, requiring specific municipal clearances and a mandatory public deed.

Step 1: Accurate Valuation and the Listing

In Ecuador, properties are often sold “turnkey” (furnished), which can significantly affect the price. Unlike the US or Europe, there is no centralized MLS; instead, properties are listed on portals like Plusvalia or BienesOnline.

During the initial setup, your agent will:

• Verify the Escritura: Ensure the property is properly registered in the Registro de la Propiedad.

   

• Assess the “Metraje”: Confirm the square footage matches the municipal records. Discrepancies can delay the sale at the closing table.

• Commission: Expect to pay 3% to 6%, plus 15% VAT (IVA).

• Photos/Drone: In 2026, high-quality drone footage is standard for the “Expat Exit” market in cities like Cuenca, Manta, and Cotacachi.

Step 2: The Promesa de Compraventa

Once you accept an offer, you will sign a Promissory Note of Sale. This is a legally binding contract that must be notarized to have full legal weight.

• The Down Payment: Typically 10% to 30% of the sale price.

   

• The “Penalty” Clause: Most contracts include a clause where the defaulting party pays a fine (often equal to the deposit) if they back out without legal cause.

Step 3: Gathering the “Municipal Pack”

This is the most bureaucratic stage. The seller is responsible for obtaining several “solvency” certificates from the local Municipio.

• Certificado de Gravámenes: A document from the Property Registry showing the property has no liens, mortgages, or prohibitions of sale. It must be very recent (usually less than 30 days old).

   

• Paz y Salvo Municipal: Proof that property taxes (impuestos prediales) and any “betterment” taxes (contribución por mejoras) are paid.

   

• UAFE Form: For transactions over $10,000, both parties must sign a “Lawful Origin of Funds” declaration as an anti-money laundering measure.

   

Step 4: The Closing (La Escritura Pública)

Real estate transactions in Ecuador cannot be done through private documents. They must be executed via a public deed before a Notary.

• The Signature: Buyer and seller (or their lawyers via a Poder Especial) meet at the Notary’s office.

   

• The Minuta: A lawyer drafts a “minute” (the legal text of the sale), which the Notary then converts into the official Escritura.

• Closing Costs: Traditionally, the buyer pays for the notary fees, the transfer tax (Alcabala), and registration fees.

   

Step 5: Capital Gains and “Plusvalía” Tax

Ecuadorian tax law treats the profit from property sales as Capital Gains.

• The Rate: Generally 10% on the net profit (the difference between what you paid and what you sold for, minus documented improvements and expenses).

   

• Exemptions: If you have owned the property for more than 5 years, the tax rate may decrease or reach a flat 15% depending on the specific municipal code.

• Over 65? If you are a senior citizen (Tercera Edad), you are often eligible for significant discounts or exemptions on municipal property taxes and capital gains.

Step 6: Registration and Fund Transfer

Signing the deed at the Notary is only half the battle.

1. Registration: The buyer’s lawyer must take the signed Escritura to the Registro de la Propiedad to be “inscribed.” Ownership does not officially transfer until this step is complete.

    

2. Payment: Payment is often handled via wire transfer. Important: If you receive payment in a foreign bank account (outside Ecuador), you can often avoid the 5% Capital Outflow Tax (ISD), but you must ensure the contract is drafted correctly to reflect this.

    

Summary of Costs for the Seller

Congratulations! You have successfully sold your property in the “Middle of the World.”