Obtain a Literal Certification (LC) and a Non-Lien Certification (NEC) of the property at the Register of Property
Agency: Immovable Property and Mortgages Registry (Registro de la Propiedad Raíz e Hipotecas)
These documents are requested by the buyer as due diligence in order to verify outstanding debts or liabilities of the property. Both certifications must be obtained by the seller before starting the transaction formally. Since May 2016, a new fast track service is available to request both certificates in 2 days in exchange for a premium payment (25 USD plus VAT). However, the majority of practitioners in San Salvador still use the default procedure to obtain a Literal Certification (LC) and a Non-Lien Certification (NEC) of the property.
Time and cost: 3 days, USD 19.47 (Literal Certification: USD8.86 + Non-Lien Certification (NEC) USD 8.86 + USD 0.35 per page (assuming 5 pages))
Obtain tax clearance from the Municipality of San Salvador (Solvencia Municipal)
Agency: Municipality
Although it is not required by law for property transfers located in San Salvador (it might be mandatory in other municipalities), it is a common practice to request a Tax Clearance certificate from the Municipality of San Salvador (Solvencia Municipal) to ensure that all liabilities charging the property such as municipal services have been duly paid.
Time and cost: 2 days, USD 5
Preparation and notarization of the sale agreement
Agency: Public Notary
A notary will prepare and notarize the sale agreement. In El Salvador, only lawyers are notaries.
The parties are responsible for gathering all the documentation to be presented to the notary.
The documentation shall include:
- Photocopy of the parties ID’s of the Limited Liability Companies (LLC)
- Photocopy of the Tax Identification Numbers (NIT) of the parties
- Photocopy of the corporate documents of the LLC’s (Articles of Incorporation, credentials, documents that can duly establish the legal representation and empowerment of the representatives of the LLC, etc)
- Photocopy of the Tax Identification Numbers (NIT) of the LLC’s
- Copy of the property title or Literal Certification (LC) (obtained in Procedure 1)
- Proof of payments of municipal taxes
- Proof that parties are tax solvent with Ministry of Finance
Time and cost: 3 days, USD 1,101.59 (0.15 – 1.0% of property price (notary’s fees))
Payment of registration fees and transfer tax at a commercial bank
Agency: Commercial Bank
The registration fee is 0.63% of the total value of the property agreed in the sale and purchase agreement. The Property Registry issues a payment order, which must be canceled by the applicant at any authorized bank.
The Transfer Tax of 3% on the excess of USD 28,571.43, is paid directly to the Ministry of Finance (“Hacienda”) or any authorized bank, based on a request made by the Notary.
Time and cost: 1 day, USD 6,097.22 (0.63% of property price (Registration Fee) + 3% over the excess of USD 28,571.43 of the total price (Transfer of Real Estate Tax))
The deed is presented to the Registry office for registration
Agency: Immovable Property and Mortgages Registry (Registro de la Propiedad Raíz e Hipotecas)
The public deed is submitted at the Immovable Property and Mortgages Registry to be recorded under the name of the buyer. The deed will be registered, if it meets all the legal requirements, in 2 – 4 weeks. The registry must check with the Ministry of Finance (“Hacienda”) if the parties are Tax solvent. In addition to reforms at the registry set out by the Law on Standard Procedures of August 2004, an electronic system is currently being introduced and, once fully functional, is expected to reduce the registration time. In addition, a special service is available (mainly used by banks, law firms or companies). Since May 2016, a new fast track service is available to register property transfer in 2 days in exchange for a premium payment (40 USD plus VAT). However, most practitioners in San Salvador still use the default procedure to register property transfers.
Time and cost: 21 days, Already paid in procedure 3
The public deed is filed at the respective Municipality
Agency: Municipality
This is done in order to update the information at the Municipality and for calculation on municipal taxes. The title is already valid even if not filed at the Municipality. The incentive to file the public deed lies on the old owner, who will have to continue paying the taxes on the property if this is not done.
Depending on the municipality, this step can take from 1 to 5 days. In San Salvador, the municipality has offices in each district. If someone goes to district 1 to register a property that is located on district 4, the registry process can take about 5 days, because the documents of the property are in district 4, but if going directly to district 4, the registry process takes about 1 to 2 days.
Time and cost: 3 days, USD 100.62 (USD 0.06 for every USD 114.29 of the property value declared in the deed)
