Mclaren Investment Property Abroad

Margarita Island Venezuela Property Buyer's Guide explains the legal fees, legal procedures, purchase taxes and mortgage procedure.

You will arrive on the Margarita Island Caribbean either by charter flight from Europe or on a regular service via the Venezuelan capitol Caracas. Either way you will arrive upon a peaceful, tranquil Margarita Island Venezuela with prices considerably lower than on any of the more well known other Caribbean Islands.

Having found your ideal property in Margarita Island Venezuela there are a few factors that any prospective property purchaser should bear in mind.

As a foreigner, you will not be able to get financial help in the form of a mortgage to assist you with your property purchase in Margarita Island Venezuela and in the few possibilities where it is possible (on certain developments in construction) the interest rates are so high that it makes it unaffordable. If financial help is required make all these arrangements in your home country before setting off.

All Margarita Island Venezuela property transactions are made in the local currency Venezuelan Bolivars (VEB) some property sellers will ask to be paid in foreign currency, but there are new regulations effective from June 2007 which makes this virtually impossible as the property purchase has to be shown as being paid for by a cheque drawn up in the local currency, proof of this has to be shown when drawing up the new title documents. (Your agent in Margarita Island Venezuela will assist you with this).

Any foreigner with a valid passport can purchase property on the Margarita Island Caribbean.

To start the process you need to apply for a Margarita Island RIF number which is obtained from Seniat (Government office) which must be done in person.
One thing to remember is to go properly dressed; men to wear long trousers and women a dress.

Although a relaxed Caribbean Island there is a formality that must be adhered to when going into Government offices. Failure to dress accordingly could result in you not being admitted.

The cost's involved with Margarita Island property purchase must always be paid upfront and always in cash usually 3% of the final property purchase price.

The seller is obliged to present a title deed that is free from debt or charges to your agent.

Most Margarita Island Estate Agents have a legal department where documentation is checked, and the new title deeds drawn up and they can assist with drawing up a "Power of Attorney" should it be required.

Once all this is done, and both parties have agreed by signing, you will be granted a new freehold title deed in your name.

I would like to buy a property on Isla Margarita. Do I need legal assistance? Margarita Island Buyers Guide

Yes. We strongly recommend that you instruct a lawyer to represent you legally during the purchase of your property. The process can be daunting and a lawyer can carry out all the legal amount of work.
 
Can I instruct a lawyer in the country I am buying?

Yes. However, unless you are fluent in the language spoken in the country you are buying, dealing with legal terms and public record offices can be exhausting. The lawyers can offer legal advice in English to our clients based in the UK and because we have a multi-lingual staff and associated lawyers in a number of different countries, we can look after the whole buying process so that you can enjoy your new home abroad.

I would like to instruct a local lawyer to represent me legally to buy a property in Isla Margarita, what happens next?

After reserving your property through McLaren, we will send you within 5 to 7 working days a letter explaining the lawyer services and costs and then after your confirmation they will draft and send you the Preliminary Contract or Opcion de Compra Venta. Then you will sign it and send it back to them with a cheque of the deposit as agreed with McLaren.

How do I know if the land has permission, if everything is in order with my new home?

The lawyer can assure you that all the due diligence is carried out and that you will be informed of everything that is regarding your new property. They will send with your Preliminary Contract a report that is called Report on Title in which you will have all the necessary clarification in regards to planning permission and other details on your property. The lawyers can look after the whole legal process of buying abroad and this helps to speed things up so that everything regarding the legal aspects of your purchase will be carefully looked after.

Do I need a surveyor to check if all is fine with my property?

Not if you are buying off plan as it is impossible to carry out a survey if the property you are buying has not been built yet. However all the due diligence is carried out directly and in person by the lawyers.

What taxes do I have to pay to buy my property in Isla Margarita?

The Seller will pay the equivalent of 0.5% of the total purchase price into the SENIAT bank account which corresponds to the withholding tax pursuant to Article 88 of the Venezuelan income tax law (Ley de Impuesto Sobre la Renta), as well as to comply with the minimum legal solvency requirements. However, the official taxes and expenses associated with the transfer of the title deed (Escritura) into the Buyers’ names payable on completion would be paid by the Buyers and are calculated as a percentage of the purchase price and charged by the Land Registry approximately 0.75 - 1% of the purchase price. It’s worth bearing in mind, though, that tourists and people who live there benefit from Isla de Margarita’s status as a ‘Free Port’ and low tax regime.

Do the payment instalments that I actually make in Euros actually get transferred into Isla Margarita?

Yes. The developer is one of the few who follow the legal requirement for your payments to actually be transmitted into the Venezuelan banking system following which you will be issued with a foreign investment certificate which guarantees that the payments have been made legally. That way, and unlike on many other developments, when you come to sell your property, you completely avoid the risk of being caught by any restrictions on taking your money out of Venezuela with you only being liable to pay the usual taxes on any expected income or capital gains.

How secure are the payments I make to the developer?

The developer is able to offer a number of different forms of protection to the buyer. These ensure, to varying degrees, that your interests are protected in what we would hope is the highly unlikely event that the developer were to go bankrupt during the build period. The actual form of protection will vary from development to development so your lawyer should advise you on the exact form of protection on the development that you choose.

What happens after I sign the Preliminary Contract?

The Preliminary Contract is a legally binding document in which the vendor expresses his wish to sell the property and that the buyer wishes to buy it. During the time between signing the Preliminary Contract and the registration of the contract with the Registry, the buyer needs to obtain a Registro de Informacion Fiscal (RIF) for tax purposes and this can be organized by the lawyer, if the buyer wishes.

What happens after the building of the property is finished?

The completion of the property will vary from project to project. However there is an estimate for completion which is normally up to two years. But it can also be less than two years depending on the development.

Why in the contracts the figures are always in Bolivares and I am paying in Euro, Sterling or American Dollar?

Bolivar is the official currency in Isla Margarita. Therefore every transaction when paying for a property in the island must reflect its value in the official currency (Bolivares) for legal purposes. However, the parts can agree on a more appropriate form of payment which can also be Euro, Sterling or American Dollar.