Often, we receive the question; what are the additional cost when buying a property in Aruba, and how much time will the closing process take? In this blog we provide an overview of the cost and time to expect when purchasing a property in Aruba.
Properties can be bought by residents and non-residents and have the same procedure.
On average the closing process at the notary will take 6 to 8 weeks, depending on the complexity of the purchase and if a mortgage is needed. The Real Estate Agent will make a preliminary purchase agreement between buyer and seller, with the terms and conditions agreed upon. This generally also includes a 10% deposit payment of the purchasing price that will have to be deposited at the notary. The notary can be chosen by the buyer. The preliminary purchase agreement will be sent to the notary. The notary will make the transfer deed and mortgage deed, if applicable. The notary also performs any necessary due diligence to ensure that the property is indeed owned by the seller by checking the Land Registry and Public Registers and is free from embargoes.
| As buyer you can expect the following additional cost: | |
|---|---|
| Closing cost: | 3% over the value below Afl 250.000 6% over the value above Afl 250.000 |
| Notary fees for transfer deed: | approximately 1% of purchasing price |
| Notary fees for Mortgage deed if applicable: | approximately 1% of purchasing price |
| Bank Charges for Mortgage if applicable: | approximately 1 % of mortgage |
Yearly cost
Congratulations, you are now the proud homeowner of a slice in paradise. There are some costs of owning a property in Aruba like property taxes, and lease if the property is built on lease land. Lease land is owned by the government and has a long-term lease of 60 years. The title holder pays a yearly fee for the lease rights. After each 60 years, the lease period will be automatically extended, with an increased lease rate.
Property tax
The cost of property tax is a flat rate of 0.4% per year.
Mortgage
If you have a mortgage on your property, monthly interest will have to be paid. Mortgage interest percentages in Aruba starts around 5% annually.
Insurance
We recommend insuring your dwelling and content against fire, break-in, and natural disaster, incase the unexpected happen. Yearly premium varies by the type of insurance and the covered amount.
Maintenance:
Another cost that many new homeowners forget in their calculation is maintenance cost. Not only your property needs yearly maintenance, but your appliances normally last less long than your probably used to. Electrical equipment like air conditioners and fridges have an average life span of 5 to 10 years. This due to the hot climate, salt spray from the ocean and fluctuations in electricity. And because the endless summer in Aruba, plants keep growing in your garden, as long as they receive water. So even your garden will need some more maintenance than you are probably used to.
Association fees
In most communities and condominiums, a yearly or monthly association fee will be charged. This fee is charged to cover cost for general maintenance, security, community pool service and garden service and in some cases dwelling insurance, garbage collection and utilities like tv connection and internet.
If you have any questions, please contact us at +297 5654785 or info@rentalsinaruba.com
