C.R. & F. Rojas Abogados
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
In Bolivia, foreigners are permitted to own and occupy real estate, including shares in property-owning companies. However, pursuant to the Bolivian Constitution, foreigners are prohibited from purchasing state lands under any title (Art. 396) or owning property within 50 kilometres of international borders due to national security concerns (Art. 262). Beyond these restrictions, foreign ownership is generally allowed without significant limitations, if foreigners comply with the same legal requirements applicable to Bolivian citizens when purchasing property.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
Bolivia does not impose specific restrictions on lending for the purchase of real estate by foreign companies. Nevertheless, foreign entities must comply with general banking regulations as outlined in Law No. 393 (Financial Services Law). Bolivian financial institutions may impose stricter lending criteria for foreign companies or additional collateral requirements. Additionally, foreign companies must ensure their investment activities comply with Bolivian laws, including anti-money laundering regulations.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
The purchase of real estate in Bolivia involves several fees and taxes. Buyers are required to pay a property transfer tax (ITP) of 3% of the property value. Additional costs include notary fees, registration fees at the Property Registry (Oficina de Derechos Reales), and legal fees. Buyers must also obtain a cadastral certificate to confirm the property’s location, boundaries and registered owner. Overall, these transaction costs typically range from 4% to 5% of the property's purchase price.
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner
Property owners in Bolivia are subject to annual property taxes based on the property's cadastral value. This tax is calculated based on the cadastral value of the property, with rates ranging from 0.4% to 1.1% for urban properties and 0.3% to 0.9% for rural properties. Regarding real estate, property values and tax bands are determined by each municipal government, thus real estate is taxed differently depending on its location. Under certain circumstances, the burden of these taxes can be transferred to tenants through lease agreements, depending on the specific terms of lease. Property owners must ensure tenants comply with local tax regulations.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so, what are they?
Bolivia does not offer specific tax breaks or incentives exclusively for foreigners purchasing real estate. However, broader investment incentives may apply under the Investment Promotion Law No. 516, which aims to attract both foreign and domestic investment by providing various fiscal advantages. These incentives are typically focused on broader economic activities rather than individual real estate purchases. Potential foreign buyers should consult with local legal and tax advisors to understand the applicable incentives and benefits to specific projects.
How is the ownership of Real Estate evidenced in your jurisdiction?
In Bolivia, ownership of real estate is evidenced by the registration of property with the Real Rights Office (Oficina de Derechos Reales). This process involves recording the property title under the new owner's name, which provides legal recognition of ownership. The title deed, known as "escritura pública," is prepared and signed by a public notary, and then registered with the Real Rights Office. This system ensures that property ownership is transparent and legally documented, providing a clear and enforceable proof of ownership.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
In Bolivia, maintaining confidentiality of real estate owners is challenging due to the transparent nature of the Property Registry (Oficina de Derechos Reales). The registry is public, ensuring transparency and legal verification of ownership. Stringent AML regulations, such as Ley No. 393 de Servicios Financieros, require financial institutions to identify beneficial owners of real estate. Decreto Supremo No. 4904 establishes the UIF, overseeing AML enforcement. Administrative Resolution No. UIF/25/2023 mandates non-financial entities to identify and report suspicious transactions. These regulations ensure transparency but allow some anonymity by registering property under legal entities or trusts.