“There’s like no taxes here.” One friend who’s a foreigner and business owner here in Ecuador told me.
“I know, it’s cool.” I responded.
It’s true, compared to many other countries Ecuador has a very light tax load.
I pay $44 a year property tax on my small 3 bedroom house on the coast.
But there is one tax that exists in Ecuador that doesn’t in the US you should know about in the beginning stages of a property search in Ecuador.
A tax that no one tells you about until its too late.
Ecuador has a “capital exit tax”.
That is, if you try to wire or transfer money out of the country in access of $1000, you will have to pay an unavoidable 5% instant exit tax (as of early 2012) on the money in addition to the normal transfer fees usually occured when transferring money abroad.
Western Union charges it.
So do ALL the banks.
Unless you want to carry the money out in the plane with you in cash, but there are limits of usually around $10k when entering most countries.
It may not seem like a lot, but when tranferring out $100,000 that’ll cost you $5,000!
At least there’s no extra taxes to bring money into Ecuador. (Just in case you were wondering.)
So, in this second post of this series detailing every step along my new property search in Ecuador, one I started this week in September of 2012, I wanted to get this point clear right from he get go.
Don’t transfer money in until you’ve found the property you want to buy and you make it to the final stages of the purchase!
Bringing it in, then quickly taking it out could be very costly.
And I doubt anyone has mentioned this, especially if they’re trying to sell you something.
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