The exit tax advantage foreigners have when buying property in Ecuador

Just like with any Economic decision, there are winners and losers, positives and negatives.

Recently, I used the ever-heightening exit tax (now at 5%) the Ecuador government has put on any money (and now cash) you wish to take out of Ecuador to my advantage in a property deal in Guayaquil.

A friend of mine was about to buy a property and had already agreed on the purchase price after a tough negotiation with a wealthy Ecuadorian owner.

But I had an idea.

As I know wealthy Ecuadorians pretty well and what makes them tick (I partnered with one in my first biz in Ecuador).

-I know almost all of them take one or two “shopping” trips a year to the USA.

-I know they almost all have bank accounts in the USA.

-That they HATE paying taxes and are generally cheap. While in my experience, the poor and middle classes are actually very spendy and don’t save a dime.

-Have almost “zero” liquidity. All the money is usually tied up in businesses, inventory or property.

-And are fearful of the current regime in Ecuador and trying to get some of their assets out of Ecuador.

Keeping all that in mind I told my friend to ask for a 3% discount and extra concessions on the already discounted, agreed-upon price if the payment was made to a USA account instead of brought to Ecuador.

The Ecuadorian owner knew it would cost him 5% to take the money out of Ecuador, so he gladly agreed.

For my friend, an American buyer, it was the same for him to pay from his US account to an Ecuadorian one or an American one (no tax on bringing money to Ecuador, just the wire fee of like $45).

So there you have it, one way to use the new exit tax to your advantage in Ecuador getting an extra discount on a property purchase.

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