Q- Can a Foreigner actually own property in the Bay Islands?
A- Yes any foreigner has been able to own property in Honduras since 1991
Q- Are there limitations of how much property I can buy?
A- A non citizen of Honduras can purchase as an individual 3000 square meters (.72 acres), or less, though a Honduran Corporation can easily be set up with the foreigner as the ‘Administrator’ in which the Corporation can own virtually any sized property.
Q- How do you form a Honduran Corporation?
A- This is a simple transaction which can be accomplished by a local attorney at a cost of approx. $1.500.00 to $1.800.00. If you do not speak Spanish, an English speaking lawyer is essential as all documents have to be written in Spanish. By forming this corporation you are entitled to all the rights of a Honduran citizen regarding ownership of your property. We can provide you with a referral on some real estate attorneys to choose from if you wish.
Q- Is the Government Stable? What system of Government is it?
A- Honduran Government is very stable and the oldest Democracy in Central or South America and also one of the strongest. Based on a three Branches modeled after the United States system, the Constitution here was written in the late ‘70s with the help of the Carter Administration in the U.S. and went into affect under Pres. Ronald Regan.
Q- Is it Safe to live there?
A- For the most part it is as safe as anywhere and has less violent crime than most places. Islanders are normally peaceful and very friendly. It is a poor country and petty theft can certainly happen especially if common sense is not used, though that is the case most everywhere. The U.S maintains the largest U.S. Military Base in Central America and South America on the mainland of Honduras and Honduras has recently approved a small U.S. Naval Station on the island of Guanaja just east of the island of Roatan.
Q- What is the ‘cost of living’ in the Bay Islands?
A- This is always a tough question to answer in that things are so much different in so many ways see the following:
- Property Taxes are extremely low in regard to what most are used to in most other countries. A typical 3br home is +/- $500.00.
- Electricity is higher than most people are used to paying in that it is based on diesel fuel prices and varies based on the cost of oil. It also is the main source of power in most homes with natural gas not available, though Butane gas is used by many for cooking. That said, there is no bill for ‘heating’ and much of the year a/c is not needed, (the south side of the island or hilltops much cooler due to prevailing SE breezes than the North side or West sides of the island). With water temperatures from 75º to 85º most of the year and the island only a couple miles wide, cooling breezes have a great impact on the lack of utilities much of the year.
- Food costs really depend upon ‘personal tastes’. If you take into consideration that if you ‘eat local’, meaning fresh sea food, (fish, lobster, shrimp) and locally grown fruits and vegetables your expense is normally far less than what you may pay at home. Please also keep in mind that if you wish to buy some of the products you may be used to consuming in North America that they now are considered ‘imported’ items and can be considerably more expensive. (e.g.- brand names – Cap’n Crunch, Hellman’s Mayo, etc).
Q- How does the price of Gasoline compare to purchasing in the United States?
A- Again anything that needs to be imported to the island can be more expensive that what you are used to paying but that said most people here use diesel versus gasoline which here is about $1.00 per gallon cheaper that the selling price of gasoline therefore puts it almost on par with the price of gasoline there.
Q- What is the process for purchasing property in the Bay Islands?
A- From a clients perspective, ‘outside looking in’, it differs little from any purchase you may have made at home. You choose the property best suited for your needs and enter into a simple ‘Purchase Agreement’ outlining the details of the property purchase, price, time line, details, etc. thus making an ‘Offer to Purchase’. After acceptance of the Seller you would make a deposit, which here is usually 10% or the purchase price and close on the transaction within 30 to 45 days. When it is stated ‘From a clients perspective’, ‘outside looking in’ what I meant is then is when your real estate Professional and his Brokerage office really kicks in and their part of the scenario is considerably different than in North America for example. They go to work with an attorney that you choose, (Agents and Brokers may make recommendations if you wish), to obtain Title Copies, do Title searches, obtain recent surveys, and work towards the conclusion or ‘closing’. Their Duties, responsibilities and knowledge base differs greatly in comparison to Agents in most other locations. You then would be present for the ‘closing’ where Seller and Buyer at that time sign the Notary Protocol (Closing Documentation), and the transaction is completed, (For a more detailed description of this process go to the ‘Buyer Info link on this Site)
Q- Can I Purchase or Sell Property and not attend the closing?
A- Yes you can do either though the ‘Buyer’ Role is easier than the ‘Seller’ Role. As a Buyer you can just have your attorney place in the closing documents that a representative of your choice, (your attorney, the real estate Broker or Agent if you wish), can ‘accept’ the property on your behalf. The ‘Seller’ role would require you to obtain either an ‘Apostille’ (authenticating your desire and authenticity of your signature), from your states Attorney General in the U.S. or a Honduran Power of Attorney if you are from Canada. Other countries would also use one of these two options. Either of those documents would need to be registered here legally here before the closing and may take an extra 2-3 weeks to accomplish and therefore add to the time line of the closing date.
Q- Is financing available?
A- Many if not most Sellers will consider financing the purchase themselves with either a legal, registered mortgage contract or possibly with the stock certificates, (which become ‘bearer bonds’, held in Escrow until the mortgage is paid). Some choose to obtain financing in their home country via a second on their residence or personal loan and pay Cash here. Several alternatives may be available and may differ from property to property.Overall financing is available though through a bank it is offered to citizens and legal Residents only and normally at higher interest rates, higher down payments and shorter term.
Q- Do I need Residency to have a Property in Honduras?
A- You do not need a legal Residency to visit here or be in the country for 90 days or less, (extensions can be obtained for additional 30 day periods). If you wish to move here or stay for extended periods of time it would be advisable.
Q- What is the residency process?
A- There are several different types of Residency in Honduras. A Retirement Residency (with a monthy income from Honduras of $1,000.00 or more) is available with some benefits as such. Also available is a Investor’s Residency, Employee Residency and Family Residency (marriage to a Honduran citizen or parent of a Honduran child). The necessary documents for this process usually includes: birth certificate, doctor’s certificate of health, police report and passport. It usually takes 3-6 months for the procedure and costs around $1.200.00 dollars (depending on the type of residency). NOTE- This information can change annually and you should ask your Broker or Agent for a the name and contact of a DEPENDABLE local Attorney to communicate with previous to the start of the process.
Q- Can I set up a Bank Account there on the island?
A- Each Bank on the island has policies that may differ from the next. If your property purchase is in a Honduran Corporation you as the ‘Administrator’ of that Corporation can set up an account. Some banks here will set up a foreigner account here with you passport other wish you to be a legal resident. Ask your REALTOR Professional or Attorney for assistance or guidance in regard to help with this.
Q- Is Banking ‘safe’ in Honduras and on the Island?
A- Many of the leading international (non-U.S.) banks and insurance companies are far more conservative and less susceptible to failure than their U.S. conterparts. These International Banks do not have the illusion of government-backed insurance to protect their depositors. U.S. Banks are far more leveraged than many foreign banking systems because of the insurance programs,* (paid for by U.S. taxpayers when they fail). *Quote from *Sovereign Society’.
In the twelve years I have been in this country I have seen the failure of ONE bank and within a week their assets were divided among other banks and the depositors had access to accounts within a week. One of the largest international banks in the world, HSBC has a branch on the island.
Q- What are closing costs for a real estate transaction on the island?
A- This expense is normally the expense of the Buyer, the Seller paying real estate commission costs. If the transfer of property comes in the form of a ‘Change of Administrators’ of a corporation the cost is normally between $2,000.00 & $5,000.00 U.S. depending upon the attorney and efforts on their part. If there is no corporation transfer involved costs are 5.5% of the purchase price.
Q- What is internet like on the island & can I call Internationally at a reasonable price?
A- There are several internet providers on the island. The newest versions are USB ‘sticks’ that you can plug into your laptop or computer. Speeds run from a low of about 100 KBPS to 1 GB+. VOIP phones with U.S. numbers are widely used on the island with providers like ‘Magicjack’, ‘Packet 8’ and Vonage where calls are not individually charged but are a monthly fee running from less than $3.00 per month to $35.00 U.S. per month. Overall calling to the U.S. or Canada overall bills are less than what most people pay utilizing their regular carriers in north America.
Q- Can I get Health Insurance there?
A- Yes there are providers here. My personal favorite is ‘BUPA’ who covers Ex-Pats who live off-shore six months + one day out of the U.S. The coverage works in either country.
In general input – For those who have never owned property in a foreign country it is both a different and exciting process. That said ‘here is not there’. Laws are different, customs are different, and although most islands speak English it is a different culture than you may be used to. Listen and learn is a good overall policy. Islanders for the most part are a cordial, friendly & polite people. Patience can be a virtue here in that, again, ‘here is not there’.