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Six Reasons Buying an Island in Honduras Is a Smart Move

buying an island in Honduras


If your fantasies drift toward exotic real estate purchases, you may have dreamed of owning your own tropical island. The reasons for wanting to own an island are as varied as these properties themselves.

For some folks it’s the status. For others it’s the opportunity to own a boutique resort or exclusive guest house with no pesky neighbors. Maybe you’ve thought about developing an island as an investment property, or perhaps it just seems like an ideal location to swing your retirement away in a hammock.

Whatever the motivation, we’re here to tell you owning an island is actually within the confines of feasibility. And if you’re looking to do it for a reasonable price without a huge amount of red tape, you should definitely consider buying an island in Honduras. Here are six good reasons why.

Buying an Island in Honduras Is Simpler Than You Think

Honduras has a stable government that is the second oldest democracy in Latin America and is modeled after the U.S. government. As such, they are very encouraging of foreign real estate investors. Foreigners have been permitted to purchase property there since 1991.

While technically non-citizens can only buy three-quarters of an acre, for about two grand, you can set up a corporation in Honduras, and as the Administrator, you can purchase any size property and set up a Honduran bank account.

Buying an island in Honduras is pretty easy, provided you work with local Honduran real estate agents and attorneys and follow a few basic steps:

  1. Verify the property history on the property registry, and make sure all tax payments are up-to-date and the title is clean.
  2. Notarize the preliminary deed to the property. (The notary fee is 3-5%.)
  3. Pay the 1.5% transfer tax and the 0.15% registration fee at a bank.
  4. Register the property at a property office. Then the official change of ownership will be filed with the Cadastre office, and you will receive a publicly registered document to that effect.

As the seller pays the agent’s fee in this case, the total charge to the buyer is between 4.65% and 6.65%. The entire process of buying an island in Honduras takes a little more than a month.

Sometimes sellers will finance the property for the new buyer, as Honduran bank financing is only available to legal residents (see below) and citizens. If you own property in the States, it may be possible to take out a second mortgage or line of credit against that and use the cash to buy in Honduras.

buying an island in Honduras

Denise Clarke

Honduras Is Still a Bargain

Honduras is still a little bit of a secret in the tropics, but it won’t be for long. The market is starting to rebound after the global economic downturn, and real estate prices won’t stay this low forever.

While it may be tempting to make super lowball offers on properties, it’s best to check on a listing’s history first. If the price has already been drastically reduced, it’s likely the owner won’t go much lower. And if they paid cash for the property, they won’t be upside down on a mortgage and desperate to sell.

Do your homework and partner with a good local agent, and you’ll be able to find something that fits with your wallet.

The overall cost of living in Honduras is about one-third to one-half of the rest of Central America. Property taxes and utility costs are very low, and there is no income tax on money earned outside the country. This allows most investors to either buy more property and maintenance help for their money or to get by on a smaller income.

If you are willing to live like a local (isn’t that why you’re there in the first place?), buying an island in Honduras is an incredible bargain.

You Have Lots of Choices

Buying an island in Honduras is like being Goldilocks. If this one is too big and that one is too small, you can still count on finding one that’s just right with the variety of properties available there. From tiny uninhabited atolls nestled in sapphire waters to fully developed luxury paradises, there is something for everyone. While there are always homes and parcels listed on the bigger Bay Islands, if you really want an entire island to yourself, it can be done.

buying an island in Honduras

Kristin Klein

The Residency Requirements Are Friendly There

As you would imagine in a country that makes it so easy for foreigners to buy property, residency requirements are quite straightforward and achievable too. While you don’t need to have a residency in Honduras to own property there, it’s generally recommended.

Establishing residency only takes about 3-6 months via the Honduran Embassy, after the usual fees and checks for identity, health, and criminal background. It can be done for a little over a thousand dollars, and you can get a visa in one of five categories:

  • Residente Inversionista: if you intend to invest in Honduras
  • Residente Rentista: if you are retired at a certain income level
  • Residente Pensionada: if you are retired at a lower income level
  • Working Residency: if you are employed by a Honduran business
  • Family Residency: as a spouse or parent of a Honduran citizen

Residency categories and income qualifications change periodically for all Latin American countries, so check with the nearest embassy for the most up-to-date requirements.

buying an island in Honduras


You’ll Make Everyone at Home Jealous

Don’t underestimate this one. How cool is it to have your own retreat from the world with complete privacy and control over your entire environment? And buying an island in Honduras will likely cost you less than a nice pied a terre in Manhattan or a flat in Kensington.

You can feel like a kid again exploring the wilderness and living in a cabin with no electricity, or you can build the palace of your dreams. Either way people will hate you. Then they’ll suck up to you so they can say, “I’m going to spend the week visiting friends in Honduras. Did I mention they have their own island?”

Honduras Is Wide Open for Business Opportunities

Just like with the real estate market, this is a terrific time to set up business in Honduras. The tourism industry is burgeoning there, and opportunities abound for people to cater to it. Anything to do with leisure time there is sure to be a hit: snorkeling or scuba diving (Honduras, like Belize, is part of the Mesoamerican Reef), fishing, boating, riding, or golfing, to name a few.

If you want confirmation of how popular Honduras is becoming, just look at how much cruise ship activity has picked up there. Industry leader Carnival even developed their own beach on Roatan for passengers. These floating villages bring thousands of people to Honduras every time they dock, so there is an infinite supply of new customers for many types of businesses.

Whether you’re seeking a stunning retirement locale or a place to start a second, completely different career, buying an island in Honduras can make it possible. Put it on the radar for your next vacation, so you can fly down and see for yourself why it’s consistently on many top ten retirement destinations. You may like it so much you’ll regret having bought a return ticket.

buying an island in Honduras

David Rivera

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