Taxes and Legal Obligations for Foreign Property Owners in Ecuador

The Ecuassist Team

From Worry to Joy: A New Home with Less Stress

A few years ago, John and Linda, a couple from Seattle, would sit down each month to review their finances with a growing sense of anxiety. Their mortgage payments kept increasing, property taxes felt like a punishment, and every winter, they questioned whether it was worth staying in a place where the cost of living was suffocating them.

Everything changed one evening when an old friend mentioned Ecuador. “You can have an amazing life here for a fraction of what you’re paying,” he told them.

A year later, they purchased a home on Ecuador’s stunning coast. At first, they wondered if they were making a crazy decision, but today, they couldn’t be happier. However, like any major life change, there were things to learn—especially about taxes and legal responsibilities.

If you’re considering investing in property in Ecuador, here’s a clear and friendly guide to help you enjoy this new chapter of your life, stress-free.

1. Property Tax: Peace of Mind at a Fair Price

Unlike the skyrocketing property taxes in the U.S., Ecuador’s property tax is surprisingly low. Depending on your property’s location and size, you might pay anywhere between $50 and $500 per year, a fraction of what most Americans pay back home.

How do you pay?You can pay property taxes at your local municipal office or online. Paying early in the year can even get you a discount.

For John and Linda, going from paying $7,500 annually in Seattle to less than $300 in Ecuador felt like a celebration-worthy moment.

2. Do You Need a Will in Ecuador?

This is something many expats overlook. In Ecuador, if you own property, it’s a good idea to create a local will to avoid legal complications for your heirs. The good news? It’s a simple and affordable process.

If you don’t have an Ecuadorian will, the country’s inheritance laws will determine how your assets are distributed, which could complicate matters for your family.

For Linda, making sure everything was in order gave her a sense of security she had never felt before. “Knowing that my husband and children won’t face legal issues in the future is priceless,” she says.

3. Selling Your Property: What You Should Know About Capital Gains Tax

If you decide to sell your property in Ecuador, you might have to pay a capital gains tax. But don’t worry—Ecuador offers exemptions if you’ve lived in the property for more than five years.

For John and Linda, this means that if they ever decide to sell their home, most of their profit will remain in their pockets—giving them financial flexibility and peace of mind.

4. Renting Out Your Property: Tax Obligations

If you choose to rent out your property in Ecuador, rental income is subject to income tax. However, tax rates are much lower than in the U.S., and there are deductions available for maintenance and repairs.

John and Linda decided to rent out a small guest suite in their home to travelers looking for an authentic coastal experience. Not only has this provided them with extra income, but they’ve also met fascinating people from around the world.

A Future with More Freedom and Less Stress

For many expats, buying property in Ecuador isn’t just about changing addresses. It’s a chance to escape excessive taxes and overwhelming expenses while embracing a simpler, more fulfilling life.

John and Linda didn’t just find a more affordable home—they found a life enriched by new experiences, a supportive community, and a deeper sense of peace.

If you’ve been feeling weighed down by the high cost of living in North America, maybe it’s time to consider Ecuador. Because sometimes, the smartest financial move is also the best decision for your soul.

If you have any questions about living in wonderful Ecuador, make an appointment FREE OF CHARGE.

EcuaAssist #1 Expats Immigration Law Firm in Ecuador

BOOK APPOINTMENT NOW

At EcuaAssist, our commitment to legality and regulatory compliance has been a core value since the very beginning of our operations. We understand that the immigration stability of our clients relies on a transparent process that is 100% aligned with Ecuador's current regulations. For this reason, we work closely with legal experts and stay updated on any changes in immigration laws to ensure that every procedure is handled correctly, securely, and within the established legal framework. Our mission is to protect our clients from irregularities, offering reliable solutions that allow them to live in Ecuador with peace of mind and legal security.