Why Ecuadorians lie about how much they paid for their property on their deed

1. Municipal’s official property appraised values in most cases are WAY out of wack, or under the actual market value.  It’s common to see properties selling in the six figures while municipally valued at $5,000 USD or less.

2. The buyer of a property can put the real price she paid for the property on the deed but must put at least the official Municipal appraised value.

3. Ecuadorians HATE paying taxes, even more then we North Americans do, because I suppose we are more used to it.

Put these three facts together and most who buy property in Ecuador don’t put the actual amount they paid on the deeds but the minimum amount they must put which is the Municipally appraised value.

The reason for this is because it greatly lessens your tax burden, both for your transfer fees at time of purchase and also your annual tax payments (predios) due to the Municipal each year of ownership.

Here is a real life 2016 example of a property I am looking to buy and how putting the actual amount the owner is asking on the deed effects the transfer and notary fees you will have to pay at purchase plus the annual property taxes vs just putting the Municipally appraised amount.

Figures were attained directly from a notary in Ecuador.  

The choice is yours.