Obtain a non-encumbrance certificate (“Certificado de gravamenes”) from the Property Registry
Agency: Property Registry of the Metropolitan District of Quit
An encumbrances certificate (“Certificado de Gravámenes”) must be obtained at the Property Registry of the Metropolitan District of Quito. The certificate remains valid for 60 days (with the certificate dated from the request date, and not from the date the document is issued). If the registration of the property transfer has not been submitted by then, a new encumbrances certificate would have to be requested.
A customer can request the encumbrances certificate online, by submitting a standardized online form (at http://www.registrodelapropiedad.quito.gob.ec). Prior to requesting the certificate, the user has to obtain user credentials at the Property Registry. After submitting the request, the user can either pay the fee of this procedure at the Property Registry or at any commercial bank. When issued, the certificate can be picked up at the Property Registry or be sent to the user’s address by courier.
Time and cost: 7 days, USD 7 (Encumbrance certificate cost)
Obtain a cadastral valuation certificate
Agency: Municipal Cadaster (Dirección Metropolitana de Catastro)
According to Art. 3 of “Ley Orgánica para evitar la especulación sobre el valor de las tierras y fijación de tributos” enacted on the 29th of December of 2016, and effective after its publication on Ecuador’s official Gazette No. 913 of December 30th, 2016, a new procedure is required to register a property transfer. The Notary has to request a valuation certificate to the Municipality (in our case study, to the Dirección Metropolitana de Catastro) that states the latest official updated value of the property. Without this document, the Registrar would deny the petition to register the property transfer.
This procedure is simultaneous to requesting a non-encumbrance certificate.
Time and cost: 2 days, no charge
Lawyer prepares the contract
It is mandatory to hire a lawyer to register property in Ecuador, according to Art. 48 of the “Ley de federación de Abogados” of March 7th 1974. A rough copy of the contract, “Minuta”, is prepared by a lawyer. The lawyers have freedom to establish the fees for their services. Normally, the fees for this procedure are calculated based on the market price of the property.
Time and cost: 2 days, USD 1,000 (Market price of legal services)
Pay various taxes at the Municipality
Agency: Municipality of Quito (Administración Zonal del Distrito Metropolitano de Quito)
These taxes are paid based on the official or on the market value of the property. The Municipality calculates the taxes according to the highest value of the two. The Property Appreciation tax (a capital gains tax named “utilidad” or “plusvalía) is also paid at this stage and is calculated on the difference between the sale-price and acquisition-price of the property. In addition, the amount of the tax is reduced taking into account the economic benefits added to the property by the seller and the antiquity of the property. The tax is 10% of the difference. The tax was cut to 0.5% only for the first transfer of any real estate delivered after January 1st, 2006, with a discount of 5% of that for every year old that the property/building is. The registration tax (1% of the official value) was eliminated. After payment of the taxes, the Municipality will issue a municipal permit-letter and register the property in the cadastre.
The documentation shall include:
- Notarized public deed
- Previous property titles
- Contracting parties identification documents
- Encumbrance certificate (obtained in Procedure 2)
- Copy of the municipal permit for commercial activities for companies for the year in which the transfer is performed (patente municipal)
- Copy of the Unique Contributors Number (RUC)
- Copy of the 1.5 x 1000 municipal tax of the companies
- Property Appreciation Tax form duly signed by the Seller
- Letter of appointment of the legal representatives of both companies
- Minutes of the meeting of the Board of Shareholder of both companies in which the board authorizes the legal representative to buy and/or sell the property of the company
- Copy of the voting certificate of the legal representatives which appear in the contract
- Receipt of payment of the municipal annual tax of the property (“impuesto predial”)
Time and cost: 3 days, USD 3,092.01 (1% of property price (Transfer tax, or “Alcabala”))
Pay taxes and update the owner’s name at the Province Council (Consejo Provincial)
Agency: Province Council (Consejo Provincial de Pichincha)
Some additional taxes must be paid at the “Consejo Provincial de Pichincha” (Provincial Council). These taxes were lowered in 2006 in Quito. The value used to calculate the fees is the highest value between the cadastral value and the contract value.
Time and cost: 1 day, USD 343.72 (0.1% (“Adicional de registro”, 0.01% “Adicional de alcabala”) + USD 1.80 administrative fee for each tax (total USD 3.60))
Notary notarizes the public deed
The public deed is notarized by a public notary. Notary’s fees were changed according to regulations passed on January 29, 2015. The fees for property transfer are as follows:
Notary Fees (Based on the Established Minimun Salary SBU)
- 0 – 5.000 0.15 x SBU
- 5.001 – 10.000 0.20 x SBU
- 10.001 – 30.000 0.35 x SBU
- 30.001 – 60.000 0.50 x SBU
- 60.001 – 90.000 0.80 x SBU
- 90.001 – 150.000 1.35 x SBU
- 150.001 – 300.000 2.00 x SBU
- 300.001 – 600.000 4.00 x SBU
- 600.001 – 1000.000 5.00 x SBU
- 1.000.001 – 2.000.000 10.00 x SBU
- 2.000.001 – 3.000.000 15.00 x SBU
- 3.000.001 – ………… 20.00 x SBU
Note: The Established Minimum Salary for 2018 is USD$ 386, according to the Ministry of Labor Relations.
Time and cost: 1 day, USD 1,576 (Notary’s fees equal to 4 minimum wage of USD 394)
Conduct a general check at the Property Registry
Agency: Property Registry of the Metropolitan District of Quito
The copy of the municipal permit-letter (“patente”) presented in Procedure 3 must be taken to the Property Registry together with the notarized public deed. The Registry reviews the documents and the history of the property. The documentation shall include the (i) public deed (notarized in Procedure 5); and the (ii) receipts of tax payments obtained in Procedures 3 and 4.
Time and cost: 8 days, no charge
Obtain notice of registration from the Property Registry
Agency : Property Registry of the Metropolitan District of Quito
A proforma invoice and the payment are made online. Subsequently the notice of registration is issued a few days later and is picked up in person.
Time and cost: 7 days, USD 500 (The current municipal fee is set up by Metropolitan Ordinance 0090. For property values over USD 10,000, the amount charged will be USD 100, plus 0.5% of the amount exceeding USD 10,000. The tariff for each service will not exceed USD 500.)