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Property taxes and fees in Tegucigalpa can significantly impact your investment returns and ongoing costs.
As of September 2025, property owners in Tegucigalpa face a combination of municipal and national taxes, with rates varying between urban and rural properties, residential and commercial use, and resident versus non-resident ownership status.
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Property taxes in Tegucigalpa are charged by the municipality at 0.35% of cadastral value for urban properties, with additional national taxes applying to transfers (1.5%) and rental income (25% for non-residents).
Total annual costs for a HNL 5,000,000 property typically range from HNL 17,500 in basic property tax to over HNL 100,000 when including all fees and potential rental income taxes.
| Tax/Fee Type | Rate/Amount | Payment Authority |
|---|---|---|
| Property Tax (Urban) | 0.35% of cadastral value | Municipal |
| Property Tax (Rural) | 0.25% of cadastral value | Municipal |
| Transfer Tax | 1.5% of sale price | National (SAR) |
| Capital Gains Tax | 10% of net gain | National (SAR) |
| Rental Income Tax (Non-resident) | 25% of gross income | National (SAR) |
| Registration Fee | 0.15% of property value | Registry Office |
| Notary Fees | 3-5% of market value | Private Notary |
What taxes and mandatory property-related fees apply in Tegucigalpa in 2025?
Property owners in Tegucigalpa face several mandatory taxes and fees charged by different authorities in 2025.
The Central District Municipal Corporation charges the primary property tax (Impuesto sobre Bienes Inmuebles) annually, which applies to all real estate within Tegucigalpa's boundaries. This municipal tax is paid in Honduran Lempiras (HNL) and represents the largest ongoing cost for property owners.
The Honduran Revenue Administration Service (SAR) collects national taxes including transfer tax on property sales, capital gains tax when selling at a profit, and rental income tax for properties generating rental revenue. These national taxes are also paid in HNL and can significantly impact your total tax burden.
Additional mandatory fees include registration fees paid to the Registry Office when transferring property ownership, and notary fees paid to licensed notaries for legal documentation during property transactions.
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What is the tax base for each property tax and fee in Tegucigalpa?
Each tax and fee in Tegucigalpa uses a different valuation base, creating varying impacts on your total costs.
The municipal property tax uses the cadastral value as its primary base, which represents the municipality's official appraisal of your property. When cadastral value is unavailable, the municipality accepts the owner's declared value from the most recent sale or transfer. This cadastral value is determined through periodic municipal appraisals conducted by certified assessors.
Transfer tax and capital gains tax use the higher of either the declared sale price or the government's appraised value at the time of sale. This prevents undervaluation attempts and ensures fair tax collection on actual market values.
Rental income tax applies to gross rental income received from tenants, with different rates for resident and non-resident property owners. Non-resident owners face a flat 25% rate on gross rental income, while resident owners pay progressive rates starting at 0% for income below HNL 209,369.63 annually.
Registration fees calculate on the declared property value at the time of purchase, while notary fees typically base on current market value as determined by the notary's assessment.
What are the exact 2025 tax rates and amounts for each property-related cost?
| Tax/Fee Type | Rate/Amount | Residential vs Commercial | Resident vs Non-Resident |
|---|---|---|---|
| Urban Property Tax | 0.35% (HNL 3.50 per thousand) | Same rate applies | Same rate applies |
| Rural Property Tax | 0.25% (HNL 2.50 per thousand) | Same rate applies | Same rate applies |
| Transfer Tax | 1.5% of sale price | Same rate applies | Same rate applies |
| Capital Gains Tax | 10% of net gain | Same rate applies | Same rate applies |
| Rental Income Tax | 25% flat rate (non-resident), 0-25% progressive (resident) | Same rates apply | Higher rate for non-residents |
| Registration Fee | 0.15% of property value | Same rate applies | Same rate applies |
| Notary Fees | 3-5% of market value | Varies by complexity | Same range applies |
How often are property values assessed and updated in Tegucigalpa?
Property values in Tegucigalpa are assessed annually as of May 31st each year for the following tax year.
The municipal assessment process relies on the official cadaster maintained by the Central District Municipal Corporation, which contains appraised values for most properties within the city limits. When properties are sold or transferred, buyers can request a new appraisal to update the cadastral value, potentially affecting future tax calculations.
The valuation method combines market comparison approaches with physical property characteristics including location, size, construction quality, and current market conditions. Municipal appraisers use standardized formulas that consider recent sales of comparable properties in the same neighborhood.
The tax calculation formula is straightforward: Tax Due = Cadastral Value × (Rate per thousand ÷ 1,000). For example, a property with a cadastral value of HNL 5,000,000 in an urban area would owe HNL 17,500 annually (HNL 5,000,000 × 0.0035).
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What exemptions and deductions are available for property taxes in 2025?
Several exemptions and deductions can reduce your property tax burden in Tegucigalpa, though exact qualifying thresholds require verification with local authorities.
Primary residence exemptions are available for property owners who use their Tegucigalpa property as their main home, potentially reducing the taxable base or providing percentage discounts. Senior citizen discounts apply to elderly property owners, though the specific age threshold and discount percentage vary by municipal determination.
New construction projects may qualify for temporary tax reductions during their first years of occupancy, encouraging development and investment in the city. Disability exemptions are available for property owners with certified disabilities, providing either partial or complete tax relief depending on circumstances.
Low-income property owners can apply for reduced rates or payment deferrals, though specific income thresholds in HNL are not published and must be confirmed directly with the Central District Municipal Corporation. All exemptions require formal application with supporting documentation before the annual assessment deadline.
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What are the payment schedules and due dates for property taxes in 2025?
Property tax payments in Tegucigalpa follow a structured annual schedule with specific deadlines and installment options.
The primary property tax is due annually on August 31st, covering the entire tax year from January through December. This single annual payment represents the standard approach for most property owners in the municipality.
Installment payment plans are available for property owners who prefer spreading the cost throughout the year, typically offered as semiannual or quarterly payments. These plans must be arranged before the original August 31st deadline, and while official minimum payment amounts are not published, arrangements are made directly with the municipal tax office.
National taxes follow different schedules: transfer taxes are paid immediately upon property sale as part of the registration process, while rental income taxes are typically paid annually with personal income tax filings or through quarterly withholding for non-resident owners.
Are early payment discounts available and what are the exact amounts?
Early payment discounts can provide significant savings for property owners who pay their taxes ahead of schedule.
Some municipalities in Honduras offer early payment discounts of up to 10% for property taxes paid by June 30th each year, though specific confirmation for Tegucigalpa's 2025 discount program requires verification with the Central District Municipal Corporation. The exact HNL savings depend on your property's assessed value and the discount percentage offered.
For a property with HNL 17,500 in annual taxes, a 10% early payment discount would save HNL 1,750, reducing the total to HNL 15,750. These discounts typically apply only to the current year's taxes and cannot be combined with other exemptions or deductions.
The cut-off date for early payment discounts is generally June 30th, requiring payment approximately two months before the standard August 31st deadline. Property owners should confirm current discount availability and rates directly with municipal authorities when planning their payment strategy.
What penalties and interest apply for late property tax payments?
Late payment penalties and interest charges can significantly increase your total tax burden if payments are missed or delayed.
Municipal penalties for late property tax payments typically range from 10-20% of the outstanding amount, with monthly interest charges accruing after the August 31st deadline. The exact penalty percentages and interest rates are set by municipal code and should be confirmed with the Central District Municipal Corporation for current 2025 rates.
Interest begins accruing immediately after the due date, compounding monthly until the full amount including penalties is paid. For example, a HNL 17,500 property tax bill could incur HNL 1,750-3,500 in initial penalties plus ongoing monthly interest charges.
Honduras offered a tax amnesty program from January through June 2025, waiving penalties and interest for unpaid taxes through December 31, 2024. However, any taxes becoming due after August 31, 2025, will incur the standard penalty and interest charges according to municipal code.
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What additional municipal service charges apply to properties?
Municipal service charges represent ongoing costs beyond basic property taxes that property owners must budget for annually.
Waste collection services are typically charged as fixed annual or monthly fees based on property type, size, and location within Tegucigalpa. These charges generally range from 0.2% to 1% of the property's assessed value annually, though exact rates vary by neighborhood and service level.
Security services, fire department access fees, and public lighting charges may apply as separate line items or be bundled into general municipal service assessments. Street maintenance and signage fees are occasionally charged for properties on newly developed or upgraded roads.
Commercial properties often face higher service charges due to increased waste generation and infrastructure usage. Property owners should expect total municipal service charges to add approximately HNL 2,000-20,000 annually for typical residential properties, depending on location and services provided.
Can you provide sample cost breakdowns for different property values?
| Property Value (HNL) | Annual Property Tax | Monthly Equivalent | Transfer Tax (if selling) | Registration Fee |
|---|---|---|---|---|
| 1,000,000 | 3,500 | 292 | 15,000 | 1,500 |
| 5,000,000 | 17,500 | 1,458 | 75,000 | 7,500 |
| 10,000,000 | 35,000 | 2,917 | 150,000 | 15,000 |
| Additional Notary Fees | N/A | N/A | 30,000-50,000 (3-5%) | N/A |
| Municipal Services (est.) | 2,000-10,000 | 167-833 | N/A | N/A |
What taxes apply to rental income from Tegucigalpa properties?
Rental income taxation in Tegucigalpa creates additional tax obligations that significantly impact investment returns, particularly for non-resident property owners.
Non-resident property owners face a flat 25% tax rate on gross rental income received from tenants, with this tax collected through withholding by tenants or property management companies. For example, HNL 50,000 in monthly rental income would generate HNL 12,500 in monthly tax obligations, or HNL 150,000 annually.
Resident property owners benefit from progressive tax rates starting at 0% for annual income below HNL 209,369.63, with rates increasing to a maximum of 25% for higher income brackets. Deductible expenses include property maintenance, depreciation, property management fees, and insurance costs.
Rental income taxes are separate from and additional to property taxes, creating combined tax burdens that can reach 30-35% of gross rental income for non-resident investors. These taxes interact by reducing net rental yield calculations but do not directly offset property tax obligations.
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What transfer costs apply when buying or selling property in Tegucigalpa?
Property transfer costs in Tegucigalpa involve multiple fees and taxes that buyers and sellers must pay during transactions.
Transfer tax represents the largest single cost at 1.5% of the higher of the declared sale price or government-appraised value, paid by the buyer to the Honduran Revenue Administration Service (SAR). This tax must be paid before the property title can be officially transferred and registered.
Registration fees of 0.15% of the property value are paid to the Registry Office as part of the title transfer process, while notary fees ranging from 3-5% of market value cover legal documentation and verification services. These fees are typically paid by the buyer unless otherwise negotiated.
Sellers face capital gains tax of 10% on net gains when selling properties at a profit, calculated as the difference between sale price and original purchase price plus improvements. Payment timelines require transfer taxes and registration fees at closing, while capital gains taxes are typically paid within 30-60 days after the sale completion.
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.
Understanding Tegucigalpa's property tax structure is crucial for making informed real estate investment decisions in Honduras' capital city.
While the basic property tax rates appear reasonable at 0.35% for urban properties, the combination of transfer taxes, rental income taxes, and various fees can significantly impact your total investment costs and returns.
Sources
- Dentons Global Tax Guide - Honduras
- The LatinVestor - Honduras Real Estate for Foreigners
- Global Property Guide - Honduras Taxes and Costs
- Garcia Bodan - Honduras Tax Exemptions Regulation
- PwC Tax Summaries - Honduras
- OECD Global Forum - Honduras Tax Transparency Report
- Garcia Bodan - Honduras Tax Amnesty 2025
- KPMG - Investment in Honduras Guide