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Real estate and construction services in Paraguay

YOUR PARTNER FOR PLANNING AND CONSTRUCTION SERVICES

Abwärtspfeil

Sale

How does a property purchase work and what needs to be considered?

When buying property in Paraguay, there are basically several options. There are therefore different things to consider. In addition to the numerous individual criteria when selecting a property (location, topography, soil conditions, vegetation and trees), the legal status plays a significant role. In the case of titled properties, the details (name, C.I.N., location, coordinates or boundary lengths etc.) in the property title must first be checked for consistency. In the event of ambiguities or contradictions, clarification is essential, if necessary with the help of competent legal advice. If a smaller section of a large plot of land is to be divided off for sale, an authorised surveyor must first carry out the local marking and prepare the documents for the division procedure. The subdivision must be authorised by the responsible local authority by means of a positive statement. As this can take several weeks or even months in practice, the notarisation date in the escribanía is often brought forward with a corresponding reference to a positive outcome. A private written contract is drawn up with all the necessary personal and property details from the surveyor's documents. The notary should now also check the details from the original title deed for accuracy by inspecting the central register and check for any encumbrances/mortgages or tax arrears. Furthermore, the escribanía is not obliged to provide objective advice, but drafts the deed according to the agreed ideas of both parties and primarily notarises the presence and handwritten signature. All modalities such as instalment payment dates and the time of the transfer of ownership with rights and obligations as well as the assumption of procedural costs and taxes must therefore be agreed in advance. With the signature, both contracting parties undertake to comply with the relevant agreements and instruct escribanía to initiate the necessary procedural steps, i.e. to issue a new title deed or to first carry out the division procedure and then issue the new title deed. In the case of untitled properties, deeded or communal properties, I recommend seeking competent legal advice from the outset. A common and popular form of financing in South America is installment payments ("cuotas"). Similar to a mortgage, the agreed purchase price is paid monthly over a period of several years, with financing costs already included and therefore usually not explicitly stated. Ownership transfers upon payment of the first installment; the land is immediately usable and buildable. The land title, and thus ownership, only transfers to the buyer or new owner after full payment. This is essentially 100% financing with all its advantages and disadvantages. A purchase agreement can be concluded with a Mercosur ID card or an EU passport. The costs for the land transfer are paid at the escribanía (land registry office) and itemized. They consist of administrative fees, fees at the central registry and land registry, taxes, and the notary's fee. Since the former are a flat fee and the latter are calculated proportionally, the total amount ranges from two to four percent, depending on the agreed purchase price. The surveying costs for fieldwork and the preparation of survey documents are billed separately. No commission is charged on the sale of my own properties.

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