Money Laundering and Real Estate
CANIBIR meeting in Managua April 27, 2017 (Cámara Nicaragüense de Bienes Raices) Chamber of Nicaraguan Real Estate. CANIBIR is similar to being a member of a real estate board in the USA. Present at this meeting were 12 real estate companies, mainly from Managua.
One of the topics discussed was money laundering activities and how this impacts real estate transactions.
Several items that people buying or selling real estate should be aware of: Sellers need to understand that changing the purchase contract (escritura de compraventa) value below the actual value of the transaction and being paid the difference is considered a money laundering activity. These rules are set forth by the Ministry of Finance & UAF (Unidad de Análisis Financiero – “UAF”). One issue is that the Seller is unable to proof where the funds came from. Second, the Buyer is creating an issue for themselves when they sell their property in the future - they in fact created an additional profit. Assume you buy a home at US$120k but pay US$20K under the table, meaning the escritura shows the purchase price at US$100K. When you sell this home let’s assume at US$200K, creating a profit of US$100k (200K-100K paid on paper) capital gain is not a US$80k since you the seller of the property are unable to proof that you actually paid US$120K for the home; therefore, the buyers must not participate in this activity of under paying for the true cost of the property.
More changes are coming to the real estate industry, we will provide updates as we get more information.