Understanding Key Real Estate Laws and Regulations in Nicaragua

Published on January 17, 2026 and written by Cyril Jarnias

Buying, building, or renting real estate in Nicaragua may seem straightforward at first glance. In reality, the country combines a relatively protective legal framework on paper, a complicated land history, specific constraints on coastal and border areas, and an occasionally unpredictable administration. For a foreign investor as well as for a Nicaraguan, knowing the rules of the game is therefore essential before signing any promise of sale.

A Civilist Legal Framework, Protective… in Theory

Nicaraguan real estate law is rooted in a civil law tradition, heavily influenced by the Napoleonic Code and Spanish law. The legal basis is the 1987 Constitution (subsequently amended), complemented by a set of specialized laws.

Around this constitutional foundation, several texts structure the real estate landscape:

Domain	Main Text	Role
Private property, contracts, inheritances	Nicaraguan Civil Code	Governs property, transfers, leases, inheritance
Land registration	Law No. 277 (1997) – Law for the Registration of Real Estate	Framework for the property registry
Agrarian reform	Law No. 509 (1981)	Redistribution of rural lands, source of many title conflicts
Foreign investment	Law 344 (old framework) and new Law No. 1240	Protection of foreign investors, equal treatment
Coastal property	Law 702 (2007) and Coastal Law (2009)	Status of the coastline, public access, concessions
Border areas	Border Law (2010)	Restrictions on foreign ownership near borders
Rental, landlord/tenant relations	Civil Code + Housing Law	Regulation of leases, evictions
Real estate brokerage	Law 1129 and subsequent regulations	Mandatory licensing for agencies and brokers

In practice, the major problem is not the absence of laws, but the weakness of the rule of law. International reports and warnings from the U.S. Embassy mention a slow judiciary, sometimes prone to corruption and political pressure, an administration that regularly changes procedural requirements, and imperfect protection of property rights, especially in land disputes.

Who Does What? Key Real Estate Institutions

Before diving into property rules, it is useful to know which doors to knock on. The institutional landscape is dense:

Institution	Main Competence
General Directorate of the Property and Mortgage Registry	Maintains the Public Registry of Real Estate and Mortgages
Public Property Registry	Registration of sales, mortgages, leases, easements
Cadastre / INETER	Official cadastral map, parcel boundaries, tax base for property tax
Municipalities (Alcaldías)	Urban planning, building permits, municipal solvency, property tax
MARENA	Environmental permits, impact studies
Ministry of Infrastructure and Transport	National construction standards, seismic code
INVUR	Licensing of real estate agencies and brokers
MIFIC	Brokerage supervision, registration of foreign investments (RUIE)
DGI	National tax administration (income tax, VAT, etc.)
UAF	Anti-money laundering, control of fund origin
PGR (Attorney General)	Issues certificates of non-objection for certain at-risk properties

Understanding these actors is crucial, because part of the delays and risks stems from the sometimes laborious coordination between registries, cadastre, municipalities, and national authorities.

Property Rights: Is a Foreigner Really Treated Like a Nicaraguan?

In principle, the answer is yes. The Constitution (Art. 27) and the Foreign Investment Law (Law 344, then Law No. 1240) establish the principle of equal treatment: a foreigner can hold property in fee simple under the same conditions as a citizen. There is no minimum investment threshold to buy a property, and no obligation of residency or a local partner to be on the title.

A foreigner can therefore: handle administrative procedures, open a bank account, work under certain conditions, and benefit from social rights.

– buy in their own name ;

– acquire through a Nicaraguan company (Sociedad Anónima, for example) ;

– in certain structures, hold via a foreign entity (LLC, trust, etc.), subject to proper structuring on the Nicaraguan side.

When the Law Changes for Foreign Investors

A recent element to consider: the new Law No. 1240 on Foreign Investment. It notably creates a Single Registry of Foreign Investments (RUIE) managed by MIFIC. Investments made through companies must be registered there, under penalty of non-compliance. However, a foreigner who simply owns a house personally, without commercial activity, is not subject to this obligation.

Existing corporate investments have a deadline (120 days starting from mid-2025) to comply. Again, guidance from a local law firm is essential.

Major Exceptions: Borders, Coasts, Indigenous Communities

Behind the principle of free property, several areas are subject to exceptions. Ignoring them is one of the greatest risks for a foreign buyer.

Border Areas: What the Border Law Says

The 2010 Border Law prohibits or restricts foreign ownership within a 5-kilometer strip along the borders with Costa Rica and Honduras, officially for national security reasons. According to some sources, a 50-kilometer limit is also mentioned in other texts or contexts, which adds to the confusion.

In practice:

– within the first 5 kilometers, a foreigner normally cannot hold fee simple title in their own name;

– between 5 and 15 km, it is sometimes possible to buy subject to a special permit or exemption, granted after a procedure that can take one to two years;

– a common solution involves setting up a Nicaraguan company that holds the property.

Structures aimed at circumventing these restrictions must be examined case by case, because the validity of the structure can be challenged if the intent to evade the law is evident.

The Coast Under Close Watch: The Coastal Law

Nicaragua adopted a Coastal Law in 2009 that clarifies the status of coastal areas, after several years of stalled tourism projects. The main rules are structuring for any project near the sea or certain lakes:

For foreign buyers, several practical consequences:

Concessions, widely used on the Pacific coast, follow a specific regime.

Private Title or Concession: Two Very Different Realities

There are roughly two types of situations in the 50–200 m zones:

Type of Right	Main Characteristics
Titled Property (fee simple)	Title registered in the public registry; can be sold, mortgaged, transferred by inheritance, subject to general laws; rarer and more expensive than concession
Concession	Lease granted by the municipality or regional council, generally for 20-year renewable terms (up to 59 or 99 years for large projects); obligation to start an activity within 90 days and not leave the land unoccupied for more than a year; annual fee; impossible to sublet or transfer without authorization; revocable in case of non-compliance with conditions or non-payment

Foreigners must, for concessions, go through a Nicaraguan company. Before committing, it is necessary to analyze the concession clauses, renewal conditions, and risks of revocation very carefully.

Indigenous Lands: Collective Rights and High Legal Insecurity

In certain regions, especially on the Caribbean coast, lands belong to indigenous communities and are governed by a specific framework. These lands are generally inalienable: you cannot become an owner in the classic sense. Sometimes one can obtain use rights or concessions negotiated with community councils.

Beyond the fact that these rights remain precarious, conflicts are difficult to resolve and central authorities intervene little. For a foreign investor, this is a high-risk area, requiring highly specialized legal and political expertise.

The Legacy of an Explosive Agrarian Reform: The Title Issue

Any serious buyer in Nicaragua quickly encounters a reality: the country’s land history is chaotic. Between 1979 and 1990, the Sandinista government expropriated approximately 28,000 properties, mainly to benefit cooperatives, peasants, or public entities. Part of these properties was later privatized, sometimes multiple times, via various laws (notably Laws 85, 86 and 88 of 1990).

For this reason, for certain types of properties, a certificate of non-objection from the PGR is required: it aims to verify that the State has no pending claim on the property, and that it does not fall into sensitive categories (State properties, former cooperatives, complementary titles, titles from the agrarian reform). Obtaining this certificate can take months and cost around $1,000, usually borne by the seller, but it reduces the risk of a State claim emerging later.

Purchase and Registration Process: What Really Happens Between Promise and Registry

On paper, buying a property in Nicaragua follows a relatively classic sequence: offer, promise of sale, due diligence, signing of the public deed, registration. In practice, delays and complications often stem from title verification and interactions with institutions.

The typical timeline is as follows:

1. Negotiation and Offer The buyer issues a written offer, often accompanied by a small good faith deposit (a few hundred or thousand dollars), generally refundable as long as the contract is not signed.

2. Promesa de Venta (Promise of Sale) A private contract, in Spanish, is signed between seller and buyer. It sets the price, payment terms, conditions precedent (obtaining certificates, result of due diligence, etc.) and provides for the payment of a non-refundable deposit (often 10%).

3. Legal and Cadastral Due Diligence This is the crucial step, conducted by a Nicaraguan lawyer independent of the real estate agent. It must include at minimum:

Verification	Detail
Chain of Title	Trace back at least 10 years, often to 1979; for coastal properties, recommendation to go back before 1917
Libertad de Gravamen	Certificate of no mortgage and no encumbrances, valid for 30 days
Municipal Solvency	Municipal solvency certificate, often including the SISCA form, attesting that the property tax (IBI) is up to date
Cadastral Plan (Plano)	Plan compliance, verification with the cadastre and physical inspection of boundaries
Public History	Research on potential State claims, agrarian reform status, previous ownership by cooperatives, etc.
Special Certificates	Certificate of non-objection for at-risk properties (coastal, State-owned, cooperatives, Laws 85/86/88, complementary titles)

It is essential that the buyer participates at least in the physical visit of the land, to compare the cadastral description with reality (boundary markers, access, easements, potential squatters).

5. Payment and Taxation The final payment is usually made via an escrow account or a Nicaraguan bank account, which facilitates AML controls. Transfer taxes and registry fees are paid at this stage.

6. Registration The deed is presented to the Public Registry, which proceeds with its inscription. The transfer of ownership is legally acquired at the time of signing, but registration in the registry is essential to assert this right against third parties. Registration can take from a few weeks to several months, sometimes up to a year in complex cases.

Overall, the period between signing the promise and closing is around 30 to 45 days, but the complete process with registration can extend over 6 to 12 months when special certificates are required.

Real Estate Taxation: What a Property Really Costs in Nicaragua

To assess the profitability of an investment, one must consider not only the purchase price, but also transfer taxes, fees, the annual property tax, and taxation on rental income and capital gains.

At Purchase: Transfer, Registration, and Fees

The main acquisition tax is the property transfer tax. It is calculated on the declared value or the cadastral value, whichever is higher. Figures vary according to sources, but there are two main scales:

– a fixed rate of 4% of the value (common practice in many transactions);

– or a progressive scale, from 1% for properties under $50,000 up to 7% beyond $500,000.

In addition:

Item	Indicative Amount	Borne by
Transfer Tax	1–4% (or even up to 7% for very expensive properties)	Buyer
Public Registry Registration Fees	Approximately 1% (often capped at $1,000)	Buyer
Attorney Fees	1–2% of the price	Buyer
Notary Fees	0.5–2% of the price	Buyer
Title Insurance (optional but recommended)	Approximately 0.5–1% of the insured value	Buyer
Real Estate Agency Commission	5–10% of the price	Seller (generally)
Additional Municipal Taxes (depending on municipality)	Approximately 1% in certain municipalities like San Juan del Sur or Tola	Buyer

In total, a buyer should budget between 7.5% and 9% in fees and taxes on the acquisition price in many cases, and even more for high-end properties subject to higher rates.

Each Year: Property Tax (IBI)

The Impuesto de Bienes Inmuebles is a municipal property tax. Its standard rate is 1%, applied not on the market value, but on 80% of the cadastral value, generally lower than the actual value. In Managua, a fixed exemption (about 40,000 córdobas) is deducted before applying the rate.

There are, however, many exemptions: small urban properties below a certain threshold, limited rural parcels, agricultural operations up to about 51 acres, indigenous communities, certain educational or non-profit institutions, tourism companies benefiting from Law 306, etc. In practice, in small municipalities lacking technical resources and an up-to-date cadastre, IBI collection remains irregular, to the point that payment of the property tax is sometimes described as almost voluntary.

Rental Income and Capital Gains: The Tax Bill

For an investor who rents or sells their property, two tax regimes come into play: income tax on rents, and capital gains tax.

– residents see their property income integrated into income tax, at progressive rates up to 30%;

– non-residents are subject to a final withholding tax, generally 15% on a taxable base equal to 70% of the gross rent (80% for vacant land), the remainder being deemed to cover expenses without the possibility of further deduction.

For capital gains upon resale:

– a company pays in principle 15% on the capital gain, making corporate ownership attractive;

– an individual can be taxed up to 30%; some sources mention rates that can even reach 35.5% depending on the brackets.

Finally, the 15% VAT applies to service provision, including real estate agency commissions, which must pass on and declare this VAT to the DGI.

Construction and Urban Planning: Mandatory Permits, Uneven Controls

Building or renovating in Nicaragua requires going through the permit process, even if, on the ground, the application of rules is far from uniform.

The general scheme is as follows:

Documents typically required for a permit include:

– registered and up-to-date title of ownership;

– cadastral plan validated by the cadastre;

– municipal solvency certificate;

– land use permit (zoning certificate);

– environmental permit or environmental management plan;

– architectural plans;

– detailed construction budget.

Permit fees are generally proportional to the construction budget, around 1% (2% for example in San Juan del Sur). For certain types of projects (warehouses, significant buildings), soil studies are mandatory, notably due to the seismic risk.

Building without a permit, or deviating from approved plans, exposes one to heavy sanctions: fines ranging from 10% to 100% of the permit value, suspension of work, even demolition of what was built.

Rental: A Very Old Leasing Law, and Generally Favorable to Landlords

Landlord-tenant relations are mainly governed by the Civil Code, whose provisions on leases have practically not been changed for over a century, complemented by the Housing Law. The system is often described as rather favorable to property owners.

Lease Duration, Form, and Content

The lease can be concluded as a private instrument for durations up to four years. Beyond that, it must take the form of a public deed before a notary. The maximum duration generally accepted is ten years, except for certain special agricultural leases which can go up to twenty years.

The contract is in practice always drafted in Spanish. It is highly recommended to detail:

– the duration and renewal conditions;

– the rent amount and revision methods;

– allocation of charges (water, electricity, maintenance, municipal tax, etc.);

– rules for subletting, occupancy, use (residential, commercial);

– causes for early termination.

Rents are freely negotiated, although in some areas, local practices or possible regulations may govern annual increases.

Security Deposit and Condition Report

Nicaraguan law does not set strict rules for the security deposit. Common practice varies between one and two months’ rent. The contract generally specifies that the deposit can be used to settle unpaid charges or cover damages beyond normal wear and tear.

Tenant and Landlord Rights

Tenants have the right to a habitable dwelling, compliant with safety and health standards (proper electrical and sanitary installations, etc.), to respect for their privacy (the owner cannot enter without reasonable notice, typically 24 hours, except in an emergency), and to protection against arbitrary evictions. An eviction requires a legal cause (non-payment, serious contract violation, illicit activities, destruction of the property…) and a court judgment.

Landlords have the right to collect their rent, to select their tenants based on objective criteria (without discrimination), to define internal rules, and to request eviction in case of contractual breach. They must maintain the property in a habitable condition and carry out necessary structural repairs.

Rental disputes go through civil courts, with the slowness that entails. Mediation and arbitration are possible, but not well institutionalized.

Inheritance and Estate Planning: Why Make a Nicaraguan Will

The death of an owner immediately raises the question of succession and the transfer of real estate to their heirs. Nicaragua applies the principles of the Civil Code: successions can be testamentary or intestate (without a will). When a person dies without a will, the law designates an order of heirs: first descendants (children, biological or adopted), then ascendants (parents), then collateral relatives (siblings, cousins), then the surviving spouse, and in the absence of any heir, the municipality.

For a foreign owner in Nicaragua, it is highly recommended to have a Nicaraguan will drawn up, even if a foreign will already exists. A local notarial will, drafted in Spanish, clearly detailing the properties (with their cadastral and registration references) greatly simplifies the transfer. Wills executed before a Nicaraguan notary have the value of a public deed and do not require a complex probate procedure.

An important point: there is no mechanism for “joint tenancy with right of survivorship” as in Anglo-Saxon systems. If two spouses are co-owners and one dies, the deceased’s share does not automatically pass to the survivor; it enters the estate according to legal or testamentary rules. Hence the importance of good estate planning and, often, appropriate corporate structures.

Tax-wise, there is no proper “inheritance tax” per se, but transfers can be taxed as occasional gains or subject to specific scales depending on the value transferred. Again, the chosen structure (individual vs. company) makes a notable difference.

Anti-Money Laundering: The New Reality for Transactions

Like many countries, Nicaragua has strengthened its anti-money laundering and terrorist financing measures in recent years. The UAF ensures the traceability of financial flows, and the real estate sector is considered sensitive.

Concretely, this means that: the implementation of these measures will be essential to achieve our objectives.

For a foreign buyer, this translates into heavier paperwork, but also a certain cleaning up of the formal market. Working with agencies and law firms that master these rules well helps avoid last-minute blocks.

An Attractive but Risky Market: How to Protect Yourself in Practice

Nicaragua attracts investors for several reasons: prices well below those of neighboring Costa Rica, growing tourism potential, projections of real estate market growth around 4.9% per year until 2029, rising FDI inflows (about $1.842 billion, +25.3% over a recent period), interesting rental yields in cities like Managua or in beachfront projects. Regions like Granada, San Juan del Sur, Tola (Emerald Coast), León or the mountain towns of Estelí and Matagalpa have become hubs for expatriates.

But these opportunities come with specific risks:

To limit these risks, the following best practices are essential:

Conclusion: A Country Where You Must First Invest in Legal Matters

Real estate laws and regulations in Nicaragua offer, on paper, a respectable level of protection, including for foreigners, with a clear constitutional framework, recognition of private property, and modern instruments like title insurance, public registries, and a reinforced anti-money laundering arsenal.

For an investor or retiree attracted by the Pacific beaches, the colonial streets of Granada, or the cool northern mountains, the golden rule is simple: before investing in real estate, you must invest in the law. It is by precisely understanding the real estate laws and regulations of Nicaragua, and by surrounding yourself with competent professionals, that you turn a risky bet into a sustainable project.