Authored by the expert who managed and guided the team behind the Honduras Property Pack
Everything you need to know before buying real estate is included in our Honduras Property Pack
Buying a house in Honduras as a foreigner is more straightforward than in many Western countries, with property prices 60-80% lower and closing costs averaging 4.5-6.5% of the purchase price.
As we reach mid-2025, the Honduran real estate market offers opportunities for foreign buyers, though cash purchases remain the norm since mortgages for non-residents come with interest rates between 12-35%. The process requires careful due diligence and trusted local professionals to navigate title verification and legal requirements successfully.
If you want to go deeper, you can check our pack of documents related to the real estate market in Honduras, based on reliable facts and data, not opinions or rumors.
Foreign buyers can purchase up to 3,000 square meters (0.74 acres) of property in Honduras directly, with larger purchases requiring a Honduran corporation setup.
The total closing costs typically range from 4.5% to 6.5% of the purchase price, including transfer tax (1.5%), notary fees (1-3%), and attorney fees (2-3%), while annual property taxes remain extremely low at 0.25-0.35% of property value.
| Aspect | Honduras | Western Countries (US/UK) |
|---|---|---|
| Foreign Ownership | Allowed with restrictions (3,000 sqm limit) | Generally unrestricted |
| Closing Costs | 4.5%-6.5% of purchase price | 2%-5% average |
| Property Tax | 0.25%-0.35% annually | 1%-2% annually |
| Mortgage Availability | Rare for foreigners, 12-35% rates | Widely available, 3-7% rates |
| Cash Purchases | Very common (80%+ of transactions) | Less common (30% of transactions) |
| Title Security | Requires thorough due diligence | Stronger registry protection |
| Investment Residency | Available with $50,000+ investment | Higher thresholds ($500,000+) |
How easy is it to buy a house in Honduras compared to Western countries?
Buying a house in Honduras is generally easier and significantly more affordable than purchasing property in Western countries like the United States or United Kingdom.
The Honduran property market offers straightforward processes for foreign buyers, with property prices typically 60-80% lower than comparable properties in North America or Europe. A beachfront home in Roatan that costs $200,000 might easily cost $800,000 or more in Florida or California.
However, the ease comes with important caveats. While the bureaucratic process is less complex than in many Western countries, Honduras lacks the robust consumer protections and title insurance systems that buyers expect in the US or Europe. The legal system moves slower, and resolving disputes can take years rather than months.
Cash transactions dominate the Honduran market, making purchases simpler for those with available funds. Unlike Western countries where 70% of buyers use mortgages, over 80% of foreign property purchases in Honduras are cash deals, eliminating lengthy bank approvals and credit checks.
The main challenge lies in due diligence. While Western countries have comprehensive online property registries and standardized documentation, Honduras requires more personal verification through lawyers and title searches to ensure clean ownership.
What's the complete step-by-step process for buying property in Honduras?
The property purchase process in Honduras follows eight essential steps that typically take 30-60 days from offer to closing.
First, define your purchase parameters including property type, size, location, and whether you'll buy personally or through a Honduran corporation (required for properties over 3,000 square meters). Next, select a reputable real estate agent with local expertise and verifiable credentials, preferably one accredited by professional associations like the Roatan Realtors Association.
Third, hire a real estate attorney immediately - this is non-negotiable for foreign buyers. Your attorney will conduct title searches, draft contracts, and ensure legal compliance throughout the transaction. Fourth, submit a written offer and negotiate terms, then sign a "Promesa de Venta" (Purchase Agreement) with a standard 10% deposit placed in escrow.
The fifth step involves comprehensive due diligence where your attorney verifies clean title, checks for liens, confirms all property taxes are paid, and ensures zoning compliance. Sixth, finalize the sale by signing the public deed (escritura pública) before a licensed notary public who will register the property with the Instituto de la Propiedad.
Seventh, pay all required taxes and closing costs, which typically total 4.5-6.5% of the purchase price. Finally, complete optional steps like registering utilities, updating municipal records, and hiring a property manager if you won't be residing full-time in Honduras.
It's something we develop in our Honduras property pack.
Which documents are absolutely required versus optional for property purchases?
Foreign buyers must provide specific mandatory documents to complete a property purchase in Honduras, while other documents enhance security but remain optional.
Mandatory documents include your valid passport for identification, the certificate of title proving the seller's ownership, and the signed purchase agreement (Promesa de Venta). You'll also need a Certificate of No Encumbrance confirming no liens exist, a Certificate of Tax Payment showing property taxes are current, and a Certificate of Good Standing from the National Registry verifying the seller's legal ownership.
Every buyer must obtain an RTN (Registro Tributario Nacional), which is the Honduran tax identification number required for property registration. Without these seven documents, the transaction cannot proceed legally.
| Document Type | Mandatory/Optional | Purpose |
|---|---|---|
| Valid Passport | Mandatory | Primary identification for foreign buyers |
| Certificate of Title | Mandatory | Proves seller's ownership |
| Purchase Agreement | Mandatory | Legal contract between parties |
| Certificate of No Encumbrance | Mandatory | Confirms no liens or debts |
| Tax Payment Certificate | Mandatory | Shows current on property taxes |
| Registry Certificate | Mandatory | Verifies legal ownership |
| RTN Tax ID | Mandatory | Required for registration |
| Power of Attorney | Optional | If buyer not present |
| Survey/Cadastral Certificate | Optional (Recommended) | Confirms boundaries |
| Corporate Documents | Conditional | For purchases via corporation |
Can I complete the purchase without physically traveling to Honduras?
Yes, you can buy property in Honduras without being physically present by granting power of attorney to a trusted Honduran lawyer.
The power of attorney must be properly notarized in your home country and authenticated with an apostille stamp for Honduras to recognize it. Your appointed attorney can then sign all documents, attend the closing, and complete the registration process on your behalf.
However, buying remotely increases risks significantly. Without personally inspecting the property, verifying the neighborhood, and meeting key parties face-to-face, you rely entirely on photos, videos, and third-party assessments. Many successful remote purchases involve buyers who previously visited Honduras and established relationships with trusted professionals.
Remote buyers should take extra precautions including hiring independent property inspectors, requesting detailed video walkthroughs, verifying all parties through multiple sources, and potentially hiring two separate attorneys - one for the transaction and another to oversee the first. Consider making an initial visit to establish relationships and view properties, then complete the final purchase remotely if necessary.
The convenience of remote purchasing must be weighed against the increased fraud risk, especially for first-time buyers unfamiliar with the Honduran market.
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What property types can foreigners purchase and what restrictions apply?
Foreigners can directly purchase up to 3,000 square meters (approximately 0.74 acres) of residential property in Honduras without forming a corporation.
This limitation applies per transaction, meaning you cannot circumvent it by making multiple small purchases. For properties exceeding 3,000 square meters or when buying multiple properties, foreigners must establish a Honduran corporation, which adds complexity and ongoing administrative costs but provides unlimited purchasing ability.
Honduras restricts foreign ownership within 40 kilometers of international borders and coastlines, though significant exceptions exist for tourism and residential developments. The Bay Islands, including popular Roatan, have special provisions allowing foreign ownership for tourism-related properties, making them particularly attractive to international buyers.
Foreigners can purchase houses, condominiums, commercial buildings, and vacant land zoned for residential or commercial use. Agricultural and rural land face additional restrictions, often requiring demonstration of development plans or agricultural investment intentions. Title must be "dominio pleno" (full ownership) rather than "dominio útil" (use rights only).
The corporation route, while adding annual fees of $500-1,000 for maintenance and accounting, offers advantages including asset protection, easier resale to other foreigners, and potential tax benefits for rental income.
What are the complete costs beyond the purchase price?
Buyers should budget an additional 4.5% to 6.5% of the purchase price for closing costs, with higher percentages for properties over $55,000 or those requiring corporate structures.
The transfer tax represents the largest fixed cost at 1.5% of the declared purchase price. Notary and legal fees typically range from 1% to 3%, though some attorneys quote a flat fee for smaller transactions. Registration fees with the Property Institute add approximately 0.2% to 0.5%, while municipal transfer stamps cost another 0.1% to 0.3%.
Attorney fees, usually 2% to 3% of the purchase price, may be quoted separately or included in the notary fees. Additional costs include title search fees ($200-500), property inspection ($300-800), translation services if documents aren't in Spanish ($100-300), and escrow services (0.5% to 1% if used).
Ongoing annual costs remain remarkably low compared to Western countries. Property taxes range from 0.25% to 0.35% of the registered value, meaning a $200,000 home incurs only $500-700 in annual taxes. If purchasing through a corporation, add $500-1,000 annually for corporate maintenance, registered agent fees, and accounting services.
It's something we develop in our Honduras property pack.
How common are cash purchases and what are the advantages?
Cash purchases dominate the Honduran real estate market, accounting for over 80% of all foreign buyer transactions as of June 2025.
This prevalence stems from multiple factors: Honduran banks rarely lend to non-resident foreigners, mortgage interest rates range from 12% to 35% when available, and sellers strongly prefer cash offers for faster, certain closings. Cash buyers typically negotiate 5-15% discounts off asking prices and can close within 30 days versus 60-90 days for financed purchases.
The advantages extend beyond price negotiations. Cash purchases eliminate bank appraisal requirements, reduce documentation needs, avoid mortgage origination fees (typically 3-5% in Honduras), and provide stronger negotiating positions in competitive situations. Sellers often accept lower cash offers over higher financed ones due to transaction certainty.
Wire transfers from US or European banks to Honduran escrow accounts work smoothly, though buyers should notify their banks in advance to avoid delays. Some buyers use cryptocurrency or international payment services, but these require careful legal structuring. Large cash transactions (over $10,000) require source-of-funds documentation to comply with anti-money laundering regulations.
For those needing financing, owner-financing occasionally becomes available, typically requiring 30-50% down payment with 3-5 year terms at 8-12% interest rates.
Can foreigners obtain mortgages and what are typical requirements?
Obtaining a mortgage as a foreign buyer in Honduras remains extremely difficult, with most banks requiring permanent residency status before considering applications.
When available, mortgage terms prove highly unfavorable compared to Western standards. Interest rates for foreign borrowers range from 12% to 35% annually, with most hovering around 15-20%. Banks typically demand 40-50% down payments, offer maximum 10-15 year terms, and require extensive documentation including proof of income, bank statements, tax returns, and often a Honduran co-signer.
- Permanent residency status or work permit
- Minimum 40-50% down payment
- Proof of income 3-4 times the monthly payment
- Local bank account with 6+ months history
- Life insurance policy naming the bank as beneficiary
- Property insurance at replacement value
- Honduran guarantor or co-signer (often required)
- Professional property appraisal
- Clean credit history in Honduras
Alternative financing options include using home equity from US properties, self-directed IRA/401k funds for investment properties, international private lenders (rare but available), or seller financing arrangements. Some US-based lenders like Intercontinental Capital Group occasionally finance Latin American properties for qualified borrowers, though terms remain less favorable than domestic mortgages.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Honduras versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How can I identify trustworthy agents and avoid scams?
Identifying legitimate real estate professionals in Honduras requires careful verification since the industry lacks comprehensive regulation compared to Western countries.
Start by choosing agents affiliated with recognized associations like the Roatan Realtors Association or the Honduran Chamber of Real Estate. Verify their business registration with the municipal government, check for a physical office (not just a cell phone number), and request references from recent foreign clients. Legitimate agents willingly provide their RTN tax number and professional credentials.
Red flags include agents pressuring immediate decisions, requesting large deposits outside of escrow, claiming "special deals" requiring quick cash payments, refusing to involve attorneys, or showing reluctance to provide documentation. Be especially wary of agents offering properties significantly below market value or promising guaranteed rental returns above 15% annually.
Always use independent attorneys not recommended by the agent, never pay deposits directly to agents or sellers, insist on escrow services for all funds, and verify property ownership independently through the Property Registry. Request written contracts for all services and commission agreements before viewing properties.
Scammers often target foreign buyers through Facebook groups, claiming insider knowledge or exclusive listings. Legitimate professionals welcome thorough due diligence, provide transparent communication, and never rush buyers into decisions.
Will Honduran law protect my ownership rights as a foreigner?
Honduras provides constitutional guarantees for foreign property ownership, treating international buyers equally under the law, though practical protection requires proper procedures.
The Honduran Constitution and Foreign Investment Law explicitly protect foreign property rights, prohibiting expropriation except for public utility with fair compensation. International treaties including CAFTA-DR provide additional protection mechanisms for US investors, while similar agreements cover European and other international buyers.
However, the theoretical protections differ from practical realities. The Honduran judicial system moves slowly, with property disputes potentially taking 3-5 years to resolve. Court proceedings happen in Spanish, requiring translation services and local legal representation. Enforcement of judgments can prove challenging, especially in rural areas.
Key protective measures include registering property promptly with the Instituto de la Propiedad, maintaining copies of all documentation in secure locations, paying property taxes on time to avoid liens, and considering title insurance from international providers. Some buyers purchase legal expense insurance covering potential disputes.
While outright property theft remains rare for properly registered properties, boundary disputes, easement issues, and inheritance claims pose more common risks requiring vigilant legal representation.
What mistakes do foreigners commonly make when buying Honduran property?
Foreign buyers frequently fall into predictable traps that local professionals can help avoid with proper guidance.
The most costly mistake involves inadequate title verification. Unlike Western countries with comprehensive online registries, Honduras requires manual searches that may miss historic liens, inheritance claims, or boundary disputes. Buyers often trust seller-provided documents without independent verification, leading to ownership challenges years later.
Second, many foreigners assume they can secure mortgages as easily as in their home countries. After finding their dream property, they discover financing impossibilities, losing deposits and opportunity costs. This surprise forces hurried liquidation of home-country assets or walking away from deposits.
| Common Mistake | Consequence | Prevention Method |
|---|---|---|
| Skipping title search | Disputed ownership claims | Hire independent attorney for thorough search |
| Assuming mortgage availability | Lost deposits, failed purchases | Secure financing before making offers |
| Buying in restricted zones | Invalid purchase, legal issues | Verify zone regulations before viewing |
| Using seller's attorney | Conflicts of interest, poor representation | Always hire your own legal counsel |
| Not visiting property | Unexpected conditions, location issues | Personal inspection or trusted representative |
| Paying outside escrow | Lost funds, no recourse | All payments through recognized escrow |
| Ignoring ongoing costs | Budget shortfalls, forced sales | Calculate total ownership costs annually |
Additional pitfalls include misunderstanding property boundaries without surveys, believing verbal promises about utilities or road access, and failing to budget for property management when buying vacation homes.
Does property ownership help with residency or citizenship applications?
Property ownership alone does not automatically grant residency or citizenship in Honduras, but it can support your application through the investor visa program.
Honduras offers an investor residency visa for those investing at least $50,000 USD in real estate or business ventures. This investment threshold remains relatively low compared to Caribbean citizenship-by-investment programs requiring $200,000+ or European golden visa schemes demanding €500,000+. The property must be registered in your name or your Honduran corporation's name, with proof of investment source required.
The investor residency provides renewable permits allowing full-time Honduras residence, though it doesn't immediately lead to citizenship. After maintaining legal residency for three consecutive years, you become eligible to apply for naturalization. Citizenship requirements include demonstrating Spanish language proficiency, knowledge of Honduran history and culture, and maintaining clean criminal records.
Alternative residency routes include the rentista visa (proving $2,500 monthly income) or pensionado visa (showing $1,500 monthly pension income). These options don't require property investment but offer similar paths to eventual citizenship. Many retirees combine property purchase with pensionado status for lifestyle and investment purposes.
It's something we develop in our Honduras property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Buying property in Honduras offers significant opportunities for foreign investors willing to navigate the unique requirements and challenges of the Central American market.
With proper legal guidance, thorough due diligence, and realistic expectations about financing options, international buyers can successfully acquire Honduran real estate at prices substantially below comparable Western properties. The key lies in working with reputable professionals, understanding the cash-dominant market dynamics, and carefully following the established legal procedures to ensure secure ownership.
Sources
- Honduras Real Estate Market Analysis
- Global Property Guide - Honduras Buying Guide
- BLP Legal - Honduras Property Investment FAQ
- Zeyla Solutions - Step-by-Step Property Buying Guide
- Roatan Caribbean Properties - Investment Guide
- Honduras Government - Foreign Investment Protection
- IBA - Honduras Legal Investment Framework
- CitizenX - Honduras Citizenship by Investment
- US Embassy - Buying Property in Honduras
- Honduras Real Estate Pro - Safe Buying Guide