Registering Property in Ecuador

This topic examines the steps, time, and cost involved in registering property in Ecuador.

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Standardized property

Property Value: USD 189,059
City: Quito

Registration Requirements Summary:


  Procedure Time to complete: Cost to complete:
1 Lawyer prepares the contract 1-2 days $1,000
2 Obtain a non-encumbrance certificate (“Certificado de gravamenes”) from the Property Registry 3 days $7.84
*3 Pay various taxes at the Municipality 2-3 days (simultaneous with procedures 4 and 5) 1% of property price (Transfer tax, or "Alcabala")
*4 Pay additional taxes at the Province Council (Consejo Provincial) 1day (simultaneous with procedures 3 and 5) 0.11% of property value (Provincial transfer tax) + $1.80
*5 Pick-up the municipal permit-letter at the Municipality 1 day (simultaneous with procedures 3 and 4) no cost
6 Notary notarizes the public deed 1 day $462 (0.2% (notary fees) + 0.1% (notary's general expenses) of the property value)
7 Conduct a general check at the Property Registry 2 days No additional cost
8 Pay registration fee at the Property Registry 1 day $275 ($100 + 0.5% of the value of the property according to cadastral value of 2005)
9 Obtain notice of registration from the Property Registry 4 days no cost
* Takes place simultaneously with another procedure.

Registration Requirement Details

Procedure 1.
Lawyer prepares the contract
Time to complete:
1-2 days
Cost to complete:
$1,000
Name of Agency:
Comment:
A rough copy of the contract -“Minuta” is prepared by a lawyer.
It is mandatory to hire a lawyer to register property in Ecuador, according to the “Ley de federación de Abogados" of March 7th 1974.
Lawyer’s fees are calculated on the market price of the property.
Procedure 2.
Obtain a non-encumbrance certificate (“Certificado de gravamenes”) from the Property Registry
Time to complete:
3 days
Cost to complete:
$7.84
Name of Agency:
Real Estate Public Registry
Comment:
A certificate of real estate encumbrances ("Certificado de Gravámenes") must be obtained at the Real Estate Public Registry. The certificate remains valid for 30 days (with the certificate dated with the request date, and not the date the document is issued). If the registration has not been demanded by then, a new certificate would have to be requested.
Procedure 3.
Pay various taxes at the Municipality
Time to complete:
2-3 days (simultaneous with procedures 4 and 5)
Cost to complete:
1% of property price (Transfer tax, or "Alcabala")
Name of Agency:
Municipality
Comment:
These taxes are paid based on the official or on the market value of the property. The Municipality calculates the taxes according to the highest value of the two.
The Property Appreciation tax (a capital gains tax) is also paid at this stage and is calculated on the difference between the sale-price and acquisition-price of the property. In addition, the amount of the tax is reduced taking into account the economic benefits added to the property by the seller and the antiquity of the property. The tax is 10% of the difference. The tax was cut to 0.5% only for the first transfer of any real estate delivered after January 1st, 2006, with a discount of 5% of that for every year old that the property/building is.
The registration tax (1% of the official value) was eliminated.
After payment of the taxes, the Municipality will issue a municipal permit-letter and register the property in the cadastre.

The documentation shall include:
a) Notarized public deed
b) Previous property titles
c) Contracting parties identification documents
d) Encumbrance certificate (obtained in Procedure 2)
e) Copy of the municipal permit for commercial activities for companies for the year in which the transfer is performed (patente municipal);
f) Copy of the Unique Contributors Number (RUC);
g) Copy of the 1.5 x 1000 municipal tax of the companies;
h) Property Appreciation Tax form duly signed by the Seller;
i) Letter of appointment of the legal representatives of both companies;
j) Minutes of the meeting of the Board of Shareholder of both companies in which the board authorizes the legal representative to buy and/or sell the property of the company; Copy of the voting certificate of the legal representatives which appear in the contract;
k) Certificate of payment of the municipal annual tax of the property (impuesto predial)
Procedure 4.
Pay additional taxes at the Province Council (Consejo Provincial)
Time to complete:
1day (simultaneous with procedures 3 and 5)
Cost to complete:
0.11% of property value (Provincial transfer tax) + $1.80
Name of Agency:
Province Council (Consejo Provincial)
Comment:
Some additional taxes must be paid at the Consejo Provincial de Pichincha (Provincial Council). These taxes were lowered in 2006 in Quito to 0.1% ("Adicional de registro") + 0.01% ("Adicional de alcabala"), and $1.80 administrative fee. The value used to calculate the fees is the highest value between the cadastral value and the contract value. The cadastre was updated in 2005 and the values are reasonably close to reality.
Procedure 5.
Pick-up the municipal permit-letter at the Municipality
Time to complete:
1 day (simultaneous with procedures 3 and 4)
Cost to complete:
no cost
Name of Agency:
Municipality
Comment:
At the time of payment of the taxes at the Municipality in Procedure 3, a municipal permit-letter is obtained and must be picked-up at the Municipality.
By this time the property is registered in the cadastre.
Procedure 6.
Notary notarizes the public deed
Time to complete:
1 day
Cost to complete:
$462 (0.2% (notary fees) + 0.1% (notary's general expenses) of the property value)
Name of Agency:
Comment:
The public deed is notarized by a public notary.
Notary's fees were changed according to regulations passed on September 26th 2007. The fees for property transfers over 60,000 US$ are 2 per thousand of the property value up until US$ 1,000. Notaries can also add other general expenses to the fees, that cannot exceed USD 4,000.
The receipts of previous payments are attached to the public deed by the notary.
Procedure 7.
Conduct a general check at the Property Registry
Time to complete:
2 days
Cost to complete:
No additional cost
Name of Agency:
Real Estate Public Registry
Comment:
The Municipal permit-letter obtained in Procedure 5 must be taken to the Real Estate Public Registry together with the notarized public deed. The Registry does a general check of the documents and the history of the property.
The documentation shall include:
Public deed (notarized in Procedure 6)
Receipts of tax payments obtained in Procedures 3-4
Procedure 8.
Pay registration fee at the Property Registry
Time to complete:
1 day
Cost to complete:
$275 ($100 + 0.5% of the value of the property according to cadastral value of 2005)
Name of Agency:
Real Estate Public Registry
Comment:
After the revision, the amount of the registration fee to be paid is obtained from the Registry. The fee is paid according to the sliding scale "Tabla de aranceles de registro de la propiedad" (Resolución del Consejo Nacional de la Judicatura, Registro Oficial 44, 20 de Marzo de 2003), but using cadastral values from 2005. The fee is paid in the same building and office where the documentation is submitted at the property registry.
Procedure 9.
Obtain notice of registration from the Property Registry
Time to complete:
4 days
Cost to complete:
no cost
Name of Agency:
Real Estate Public Registry
Comment:
After payment of the registration fee, the Real Estate Public Registry issues a notice of registration.