Property taxes in Nicaragua: IBI, sales and rentals
Three taxes matter to an owner: the annual IBI paid to the municipality, the withholding when selling, and income tax if you rent out.
This guide summarizes current law from official sources and is not legal or tax advice. Before you sign or pay, hire an independent Nicaraguan lawyer and notary to check the property’s title, registry and cadastre records.
IBI (annual property tax)
- Rate: 1% on 80% of the cadastral value or self-assessed value, i.e. about 0.8% of value.
- You declare in January–March of the following year; pay 50% then and 50% by 30 June.
- 10% discount if you pay everything when you declare in January–March.
- Retirees are exempt for the house they live in, if they or their spouse own it or hold its usufruct.
- Municipalities may have extra rules in their local tax plans.
When selling
The seller pays a final withholding of 1% to 7% depending on the value in US dollars, the same for residents and non-residents.
| Value (US$) | Withholding |
|---|---|
| ≤ 50,000 | 1 % |
| 50,000 – 100,000 | 2 % |
| 100,000 – 200,000 | 3 % |
| 200,000 – 300,000 | 4 % |
| 300,000 – 400,000 | 5 % |
| 400,000 – 500,000 | 6 % |
| > 500,000 | 7 % |
If you rent out
- Taxable income is gross rent minus a single 20% deduction, taxed at 15%: about 12% of gross rent.
- If no one withheld it, you self-assess monthly by the 5th of the following month.
- Residential rentals are VAT-exempt unless furnished; VAT is 15%.
Sources: Decree 3-95, Real Estate Tax (IBI); Law 987, amending Tax Law 822 (2019); PwC Worldwide Tax Summaries: Nicaragua (reviewed Aug 2026); Law 920, registry fees (La Gaceta No. 241, 2015).
Reviewed: 13 Nov 2026