Expats Guide to Real Estate in San Salvador, El Salvador

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UPDATE: 2021 El Salvador approved a law making Bitcoin legal tender in El Salvador. A residency law for real estate investors is currently being worked on by the government. Check out our blog post on the El Salvador Bitcoin Law

Hello Expats! Welcome To San Salvador. We know the whole real estate experience in any new city can be a daunting one, let alone in a new country like El Salvador, especially when you don’t speak the language. I’ve been an expat myself in two countries so I know the feeling. The rules and customs can feel so… foreign, for lack of a better word, but our aim today is to make the process a little clearer for you. Sometimes things you’d assume would be the same often aren’t, and some things you expect to be different turn out to be basically the same.

UPDATE: 2021 El Salvador approved a law making Bitcoin legal tender in El Salvador. A residency law for real estate investors is currently being worked on by the government. Check out our blog post on the El Salvador Bitcoin Law

Every case is different, but you might find these examples handy. As always, feel free to call or text or email us with any questions and we’ll be glad to help.

ABCs of Real Estate in San Salvador, El Salvador

Area:

What area of town do you want, or need to, be living in? Depending on where you come from things could be very different, or almost the same as home. San Salvador for our case is short for the AMSS (Metropolitan Area of San Salvador) which would include nice areas you might not have heard of. The AMSS consists of San Salvador itself, and its neighboring towns, cities and suburbs. We have homes in San Salvador, Antiguo Cuscatlán, Nuevo Cuscatlán, Santa Tecla, and others. These are municipalities or “municipios” with their own taxes and local governments. They are divided into “colonias” which are neighborhoods, zones or areas. But can collectively be referred to as “Gran San Salvador”. There are many nice neighborhoods across all these municipalities with plenty of choices in home and apartments.

In San Salvador itself for example you can find Colonia Escalón, Colonia San Benito, Colonia Maquilishuat (it’s El Salvador’s national tree, and it’s pink!), Colonia San Francisco, Lomas de San Francisco, Altos de San Francisco (while these three are close to each other despite the name they are very different areas of town, it’s mindful to keep track of the small details). There’s a lot more areas, these are just small examples to get you started. 

Maquilishuat in bloom in San Salvador

So if the AMSS is divided into the municipalities (like San Salvador itself), and each municipality is divided (technically into districts but not in common use) into Colonias (Like San Benito), what are Colonias divided into?

Colonias is a tricky word, it can mean one of two things, it’s the general area of town you are in such as Escalón, Satellite, San Luis, San Benito, and so on but it’s also informally used to refer to gated communities. We prefer the word “residenciales” but locals use it interchangeably when referring to gated communities. When referring to the general area in town only “Colonia” is used. San Salvador has districts too, but for most things, they aren’t commonly used by most people in day to day activities. 

So Colonias can be divided into residenciales, or the specific streets, both private gated and ungated communities exist. Find out where your job or place of interest will be located and start from there. Public transportation in San Salvador is sadly in poor condition and isn’t necessarily the safest option., Ubers and Taxis are plentiful and totally safe, but most people would end up needing a car. Consider that in your choice of area. Let’s talk and we can guide you to the best fit for your particular needs. In general 2-3 bedroom apartments and homes come with two parking spots, this applies to most cases but each property might vary. Consider if the property has access to visitor parking. Most of our properties do, but again, it may vary. 

Budget

What’s your budget? San Salvador can be either cheap or expensive depending on where you live and where you come from. Below you can find some general rules of thumb, the following prices are for the property itself, unfurnished and without appliances. An appliance package (known locally as Linea Blanca) can be often added for $75-200 a month depending on the property itself. Furnished homes and apartments are available, often for 20% on top as a general guideline. All utilities, cable, internet, phone, water, electricity, municipal property taxes (they’re low and on your electric bill) are covered by the tenant. 

An example for apartments:

The average apartment size for a 3 bedroom apartment is 100 m2, or roughly 1000 sq.ft. Most of them will come with two parking spaces, one covered, one uncovered is common. Most premium buildings have all covered parking spaces. 

1000 Sq. ft. 3 bedroom 2 bath apartment in a new building with amenities including HOA fee: $900+. In premium condos and apartment complexes this might go up to $1500 for a 1000 sq.ft. 2 bedroom apartment.

1000 Sq. ft. 3 bedroom 2 bath apartment in an older (10-15 years) building with no or few amenities including HOA fee: $750+

800 Sq. ft 2 bedroom 2 bath apartment in a new building with amenities including HOA fee: $750+

800 Sq. ft 2 bedroom 2 bath apartment in an older (10-15 years) building with no or few amenities including HOA fee: $600+

Of course each property can influence the price but these are provided as informational examples, a general rule of thumb, for nicer areas such as Escalón and San Benito. All our residential properties are located in safe neighborhoods and areas of town. Take a look at our online catalog to have a better idea of the properties, while most of the website is in Spanish it’s fairly intuitive, as always feel free to call. Lower cost options do exist, in Colonia San Francisco, for example you can find a 1000 sq. ft. 3 bedroom apartment in a building with no elevator (3 floors tops, the law requires that every building with a 4th floor and higher has an elevator) for $650-750, and it still is a safe a nice area. 

A house can be more affordable than an apartment but it depends a lot on its location. In general for the same area of town, apartments cost less than homes, but there are many older homes (15-20+ years) that have been updated, remodeled or renovated over the years in good condition in nice neighborhoods that might often be overlooked by the expat community. Lomas de San Francisco is a great walkable, safe and residential neighborhood for the most part with many houses often being the same or even lower cost than some apartments.

In San Salvador or Antiguo Cuscatlán a 3 bedroom 1500-2000 sq ft home for a family ranges from:

  • $550 a month for an older (15-20+ year home) not in a gated community or in a semi-gated “pasaje” (Public road during the day, closed to residents at night). 
  • $650-850 a month for a home inside a “residencial” usually add $40-60 in HOA fees for the gate security guards. Depending on the age of the home and location.
  • $1200-1500 a month for a larger home, in a private gated community, recently built or updated. 
  • $1500+ for larger homes in more exclusive neighborhoods, usually newer built neighborhoods with clubhouses, pools, parks, biking trails or other amenities. Some of our listed properties even have access to tennis courts or a golf course. 

Contracts and legal requirements

Contracts and all the legal stuff to buy or rent a property in El Salvador. Buying or renting you will need a lawyer/notary public, but worry not it might cost a lot less than back home, and we have lawyers experienced in real estate for an additional fee, but you are welcome to use your own. 

What do you need a lawyer or notary for?

When renting, you make a contract known as a Documento Privado Autenticado. This means “private authenticated document”. It’s private since it’s between two private parties, the landlord and tenant in this case, and it’s authenticated because a notary is present, draws up the documents, verifies the paperwork (IDs and such), and authenticates it. It’s a normal document, printed in normal paper, but a notary public stamps and signs it thus “authenticating” it. There is only one original and one or more “authenticated” copies of it. Usually these are prepared and checked by a lawyer on either side of the deal but more often than not they’re fairly standard. Legal fees for drawing up the contract for renting a house or apartment vary but in most cases should not exceed $50. Our notary can draw up rental agreement contracts as documentos privados for $35. It’s fairly easy, and most of the time the signing takes place in the actual property. Usually the first month and deposit (1 month) are due at this time. Depending on the amount either cash or a cashier’s check is often preferred and customary compared to bank transfers or personal checks. Checks from the same bank clear immediately, checks from any different bank in El Salvador take 3 days to clear, personal checks from other countries are often not able to be cashed, and finally cashier checks from other countries take 21 days to clear. 

When buying, it’s a more delicate and complicated process. It is always done with cashiers checks. As opposed to a documento privado autenticado, it is a “escritura publica”, a public document in special paper. Costs vary a lot depending on the value of the property but in most cases don’t go below $200. Either party can draw up the contract but it must be agreed to and verified before signing. We do recommend having a notary verify the public records of any property you are interested in purchasing for an additional fee, however this can be done by yourself in the Centro Nacional de Registros (CNR). 

The seller should provide to the buyer:

Either:

  • If the property is currently mortgaged: a “Compromiso de Liberación de Hipoteca” is a letter provided by the bank currently holding the mortgage on the property saying that upon payment, they’ll release the mortgage. This is often accompanied with a letter from the bank stating how much is owed, capital and interest, up until the actual day of the purchase. A cashiers check (known as Cheque de Gerencia locally) is needed. One for the bank or institution holding the mortgage by the amount specified in the statement, and one for the seller for the remaining amount.
  • If the property is free from any liens, loans, mortgages or other encumbrances then the check can be written to its proprietor for the full amount.

Plus

  • Solvencia de Hacienda: a document from the national taxing authority stating that you are in good standing with them. It’s free of charge, and takes about 3-7 days to process.
  • Solvencia de Alcaldia: a document from the city hall of the particular municipality stating that the property is up to date with its takes. As far as time, assuming the taxes are paid, it can be immediately in some municipalities and take up to one week in others. 
  • Escritura: The original title deed to the property.
  • Documents: DUI (El Salvador ID), Carnet de extranjero residente (residency card), or even a Passport is acceptable. A NIT (El Salvador’s Tax ID number, you can get your own with your passport on the same day, cost is below $10) will be required for both parties in case of purchase. It might be required in certain rentals. 

Finally we have taxes: who pays what?

When renting:

  • The price offered to natural persons (as opposed to legal persons/companies) is flat and no taxes are added on top. You should always declare any income to the relevant tax authorities. 
  • If you are renting to a company: usually they will retain “renta”, 10% of the price will be retained by them and reported as credit in your favor with the tax authorities. 
  • Municipal taxes are usually paid by the tennant, they are often added to the power bill, but not in all cases. They tend to be below $30 for most properties.

When selling:

  • The first property you ever sell in El Salvador is currently not subject to capital gains taxes. For any following property the taxes are calculated based on the capital gains. For example, if you bought a property for $100,00 and sold it for $120,000 the $20,000 difference will be subject to taxation. Do check with a salvadoran registered public accountant. 

When buying:

  • When buying you’ll hear the term “gastos de escrituración”, it means closing costs. The lawyer’s legal fee will depend on each situation but expect it around $200. This is paid by the buyer. There is also a 3% tax on the transfer of property over any amount exceeding $28,571.42. A 0.63% tax is levied for “derechos de inscripción” and an equal amount, if applicable, for “derechos de registro de hipoteca” if you are mortgaging the property (say, if you bought it with a bank). We have a business relationship with Banco Agricola who can help with mortgages for locals, expats, and salvadorans living abroad.

This is but a short summary of buying, selling, or renting property in El Salvador. We hope it helps you. Feel free to call us, whatsapp us, email us, or leave us a message. We’re here to help. 

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