Buying a property

First welcome. Yes there will be additional fees. You need to ask your lawyer exactly what they are. You have a lawyer right???

You need to set up the corporation (LLC) before the purchase to avoid two transactions.

Yes electricity charges are based on usage and it's a step rate formula.

Should you not have asked all these questions BEFORE
you commited to buy?
Interest rate?
Clear title???

We haven't signed it yet...just the verbal agreement...but, yes, we're planning on hiring a local lawyer...per our friend Sebastian ;-)

Yes you will have transfer taxes unless you are buying a house in a LLC and you buy that LLC (very cheap this way) . IF not in a LLC you pay I believe it is 3% or more of the value if the home .

Yes do use a local reputable local lawyer to handle the transaction

Remember rentals here are all about location and marketing,

Bob K

Does the lawyer handling the sales contract also set it up as a corporation? Do you recommend someone on north coast?

Do you mean Sebastian in Cabrera?
If so, my wife, Catalina & Sebastian do a bit of work together.
Catalina does quite a few tax things for Xpats like you
tn the Corporation thingy.

Tomas you cracked me up,  technical term "thingy"....... 

Yes your lawyer should handle both.  PM  me your email address and I will give you a couple of very good ones in the area

Bob K

Hey, Bob K and planner (Bob K and I PMed about this topic...but thought others might have insight too)

I have a technical question: So included in the sale of the property we about to buy is/are the individual LLC's for the properties (We are buying a house and two adjacent lots) We only need the LLC with the house, and would essentially dissolve the two lots' LLC's after transferring them into the one LLC with the house.  (Is this confusing anyone yet?  I am!) Soooo...my husband will come down to DR to re-inspect the property and sign the contract of sale and intiate the down payment.  We will be done paying off the sale next Summer.  What besides the lawyer fees will we be required to pay up front, so to speak.  Meaning before we can actually own title?? 

Also, will we have to pay transfer tax?  The company name and holdings stay the same...I guess acquiring the two other lots into the company...would be a change...but, I'm really confused...help?

Our entire purchase is just under the 5 million pesos limit...meaning we wouldn't pay property taxes, unless the assessor deems the value higher that what we are paying...

Any direction from anyone (Hey, Tomas Cabrera...maybe your wife has insight?) would be appreciated before we start sending money all over the world!)  Taxes really take the wind out of ones sails, huh?  I was just looking at my pa check...I only take $50 out per paycheck for a 401k like vehicle...and I only see about 61% of my gross pay...LOL...and I lived in Europe and didn't feel this walloped! Plus all the private insurance crap we Americans seemed to require...*sigh*

Well, from my experience here, which is not much,
I think you should keep all 3 properties separate for
a number of reasons.
Taxes.
Future sale.
Problems in the future concerning 1 of the properties.
Hope this helps.
Have you talked to Sebastian about all this.
He has all the correct answers.

we plan to build on the two lots...and have both houses as rentals together or separate...but, yes, sebastian has most of the answers...just doesn't seem to respond to those questions!

Okay -  if your are going to build on the lots and keep the houses as rentals -  you are likely better to keep them in separate LLC's.   The  5,000,000 limit will  apply to each separately this way. AND income splitting via 3 companies will be much much better.   You will have deductions that you can use on each  LLC  separately.   

Selling any or all will be easier when they are individual as well.

Downside you will file  every year on  3 companies, but I think long term the benefits will outweigh the costs.

I was thinking that too...however, we plan to build our villa in the middle of the two lots adjacent to existing house...is that a problem?  I assume we will have to unite the two lots through a deslinde process when we are ready to build...but, keeping them as two separate LLC's is an option we should consider.  That way one house is its own company...and the new build on the double lot will be too.  hmmm...  Thanks, Planner

You will not be able to build straddling lot lines unless in one corp.

Also it is expensive to dissolve a corp and you will need to pay transfer tax when you do this.

Do the properties have a Dislinda title??

Bob K

Is it legal to build then on each separate lot Bob?  I just assumed that was the intent.

Yes on separate lots but it sounded like h wanted to build straddling the lot line. To do this he would have to merge the two lots into one.

Bob K

Got it, that makes sense.  I thought  3 lots 3 houses,  2 for renting..... LOL

mas café por favor

Bob K

I would build within the current survey lines.

Nope...we will go through the fundicion process with the two lots...which are pretty small...too narrow by themselves to build on...

Well, if they are in the area we were talking about a while
ago, it's probably a good idea. Tiny lots up there won't cut it.

I've been assured they have deslinde title...that's what Julio will be checking...and I'm hoping we can combine the two empty lots into one property under the single LLC that comes with the house...then maybe Bob K is right and we'll have to pay transfer tax on those...or captial gains since the company assests would have increased by their value.  But, the two lots together only cost 33K...so I'm thinking that will cost around $1K...but, saving on the house property transfer tax aroun $2.3K...BUT if lawyer fees even out the savings in the end, is this still the way to go?  We want the tax and liability protection and LLC provides...PHEW!  I didn't realize I would basically need to take finance courses to understand our purchase!

It can be confusing but you are doing it right and Julio will keep you out of trouble.

Bob K