Buying a house in Ecuador: foreigners may, and you become owner on registration

As a foreigner you may buy a house in Ecuador. Article 43 of the civil code says the law makes no distinction between Ecuadorians and foreigners in acquiring civil rights. The purchase is only complete once there is a notarial deed (article 1740), and you only become owner once that deed is entered in the Registro de la Propiedad, the canton's property register (article 702). On top of that you pay the alcabala, a municipal tax of 1% on the purchase price.

What	The rule	Source
Buying as a foreigner	allowed, equal civil rights	Código Civil, art. 43
Deed of sale	notarial deed (escritura pública) compulsory	Código Civil, art. 1740
Becoming owner	on entry in the Registro de la Propiedad	Código Civil, art. 702
Alcabala	1% of the purchase price, or of the cadastral value if that is higher	COOTAD, art. 532 and 535
Tax on the gain on sale	urban home: 10% of the gain, minus 5% per year owned; nothing after 20 years	COOTAD, art. 556 and 559
Border zones	barred for foreigners, except in villages and towns	Ley de Seguridad Pública, art. 40
Visa with a home	home of at least 100 basic wages, 48,200 dollars in 2026	Cancillería

When are you the owner?

Only on registration. A signed purchase agreement does not make you owner yet, and nor does a payment. Article 1740 says the sale of real estate is not regarded as complete as long as there is no notarial deed. Article 702 adds that ownership passes by entering that deed in the register.

Do not pay a large sum on the basis of a purchase agreement alone. Have the Registro de la Propiedad checked beforehand for who is registered as owner and whether there is a mortgage or attachment on the house, and make the payment coincide with the deed and the registration.

How the notary and the register work in your canton and what they charge differs from place to place. Ask the notary beforehand for a written quote of his costs and those of the register.

What tax do you pay on the purchase?

The alcabala. The COOTAD, the law on municipalities, levies that tax on every transfer of real estate for consideration (article 527). The rate is 1% (article 535). The base is the purchase price, unless the value in the municipal land register is higher; then that applies (article 532). The tax goes to the municipality where the house is located.

Who pays is not firmly set by the law. According to article 531 it is the parties who benefit from the contract, and without an agreement that benefit counts as shared. State in the deed who bears the alcabala.

Municipalities work this out in their own ordinance. Daule, for example, also applies 1% in its 2023 ordinance.

What if you sell later?

Then as the seller of an urban home you pay the tax on the gain, the impuesto a las utilidades y plusvalía. The COOTAD sets it at 10% of the gain, and a municipality may adjust that rate by ordinance (article 556). For each year you owned the house, 5% of the gain is deducted. After twenty years of ownership the tax is no longer levied (article 559). A notary may only execute the deed once the tax has been paid.