New coastal law set to boost property investment in Nicaragua
After five years of uncertainty and speculation the government in Nicaragua has finally approved a new coastal law that bans property from being built within 50 meters of the sea.
The decision is a huge relief for real estate investors, many of them foreign, who were concerned that a temporary ban on property within 800 meters of the coast might be approved.
However, the real estate industry is so vital to the future economy of the Latin American country with an increasing number of property investors from the US showing interest, that officials decided to opt for a compromise.
Before the temporary restriction was introduced developers could build within 30 meters of the beach. Indeed the temporary ban left property for sale and under construction in limbo as the real estate sector did not know what the new Coastal Law would mean.
The country has been plagued by a set of property law going back more than a hundred years that were both fragmented and contradictory. Now the Coastal Law establishes one clear set of rules and guarantees for land ownership and development along ocean, lake and lagoon shorelines.
It states that all oceanfront land within 50 meters of the high-tide line is public domain and cannot be built on in any form. The same goes for all land within five meters of the shorelines of lakes and lagoons. Rivers are excluded from the law.
Also the law is not retroactive, as many had feared it might be. That means all land legally acquired prior to the law will be respected, as will all pre-existing structures and permits for land use or development within the affected coastal zones.
So the law will only apply to people who haven't yet developed their coastal land or those who purchase land after the Coastal Law enters into effect in the coming weeks. It is expected to act as a huge stimulus for the property market. An estimated $1 billion of tourism and residential property development projects had been put on hold along the popular Pacific Coast.
'I feel like we can finally relax after five years of doubt,' said Lucy Valenti, president of the National Tourism Chamber. She added that even if only half of these projects move forward it will be a huge boost to the economy by creating employment and stimulating new investment.
Mario Zelaya, president of Nicaragua's Construction Chamber, said it could create 10,000 new jobs by next year.
Property in Nicaragua is particularly popular with US investors are prices are low compared with other Latin American countries because construction costs are still much less expensive. Building in Nicaragua is 20 to 30% cheaper than in Costa Rica or Panama, according to Zelaya.