Buying Property in Roatán and the Bay Islands (Honduras), 2026: Caribbean Beachfront, and the Constitution That Governs It

Published on: July 9, 2026

Last verified: 9 July 2026. Honduran property law contains constitutional restrictions with severe consequences for non-compliance. This guide is informational only. Engage independent Honduran counsel.

Roatán is the most accessible Caribbean beachfront market a foreign buyer can still reach at prices that would not clear a deposit in Barbados or the Caymans. It sits on the Mesoamerican Barrier Reef, the second-largest reef system in the world, has direct international flights, two cruise terminals, and several thousand foreign residents concentrated in West Bay, West End, and Sandy Bay.

It also sits inside a constitutional restricted zone where, as a starting proposition, foreigners cannot own land at all.

Understanding how that squares is the entire job. Everything else, price per square foot, dive shops, sunsets, is downstream of it.

Article 107: read the actual text

The Constitution of Honduras, Article 107, provides in substance:

State, municipal, or private properties situated along neighbouring countries, or along the coastlines of both seas, within an extension of forty kilometres toward the interior of the country, including islands, cays, reefs, rocks, and sand banks, may only be acquired, possessed, or held under any title by Hondurans by birth, by corporations formed entirely by Hondurans, and by government institutions, under penalty of nullity of the act or contract.

The acquisition of urban properties located within those limits shall be the subject of special legislation.

Property registrars are forbidden to record documents that contravene these provisions.

Three things follow, and buyers routinely miss all three.

1. The entire Bay Islands archipelago is inside the restricted zone. Roatán, Utila, and Guanaja are islands. The forty-kilometre coastal belt is not the relevant clause for them, the islands clause is. There is no part of Roatán that is outside the restricted zone.

2. The sanction is nullity, not a fine. A transaction in breach of Article 107 is void. Not voidable. Void. And registrars are constitutionally barred from recording it.

3. The Constitution creates its own exception. "Shall be the subject of special legislation" is the hook. That special legislation exists.

Decree 90-90: the legal route for individuals

In 1990, Honduras enacted Congressional Decree 90-90 as the special legislation contemplated by Article 107, to encourage foreign investment in real estate.

Under Decree 90-90, a foreign individual may acquire, in their own name, an urban property within the restricted zone, subject to conditions. The conditions consistently reported across Honduran legal and brokerage sources are:

This is not a loophole. It is the exception the Constitution itself provides for, and a compliant Decree 90-90 purchase is legally protected.

A married couple is commonly reported to be able to hold up to 3,000 m² each, but confirm this against the current regulation, not against a broker's summary.

The word doing the heavy lifting is "urban." Whether the specific parcel you want qualifies is a legal determination, not a marketing one. A beachfront lot in West Bay may qualify. A jungle acre on the East End may not. Verify the classification, in writing, before you pay a deposit.

The corporate route, and why we are going to be blunt about it

For anything above 3,000 m², or for a second property, the near-universal practice on Roatán is to hold through a Honduran corporation, a Sociedad Anónima (S.A.) or Sociedad de Responsabilidad Limitada (S. de R.L.).

Here is the tension, stated plainly.

Article 107 permits ownership in the restricted zone by "corporations formed entirely by Hondurans." A Honduran-domiciled company has Honduran juridical nationality under the Commerce Code. But a company whose shareholders are foreign is not, on the face of the constitutional text, "formed entirely by Hondurans."

The standard market practice, described openly on Roatán brokerage websites, has been to incorporate with two Honduran nominee shareholders and then have them endorse their shares in blank to the foreign buyer, relying on bearer-share transfer provisions of the Commerce Code.

We are not going to tell you this is safe, and we are not going to tell you it is illegal. What we will tell you:

• It is extremely common on Roatán and has been for three decades.
• It sits in evident tension with the constitutional wording, and the constitutional sanction is nullity.
• Bearer shares have been the target of sustained international anti-money-laundering reform, and their availability and treatment have narrowed in many jurisdictions.
• Corporate holding brings real costs: incorporation (commonly quoted at $1,000 to $1,800), annual maintenance (commonly quoted at $325 to $1,000), Honduran accounting obligations, and, for US persons, potential Form 5471 reporting on foreign corporations.
• Holding through a company does not automatically reduce your tax. It frequently increases complexity.

Do this: retain a Honduran attorney who is not the seller's attorney, not the developer's attorney, and not recommended by the listing agent. Ask them, in writing, for their opinion on the constitutional validity of the specific structure proposed, and on what happens to your position if that structure is later challenged. If they will not put it in writing, that is your answer.

Title: the risk that actually loses people money

Roatán's genuine, recurring problem is not Article 107. It is title chain quality.

The island has a long history of ejidal (municipal/communal) land, possessory rights (dominio útil / derechos de posesión) that are not full ownership, overlapping surveys, and parcels sold multiple times. What you want is dominio pleno, full ownership, evidenced by a registered escritura pública at the Instituto de la Propiedad, verifiable through the SINAP registry system.

The non-negotiable steps:

1. Independent title search through the Instituto de la Propiedad, going back through the full chain, not a certificate the seller hands you.
2. Independent survey. Boundaries on Roatán are frequently not where the fence is.
3. Confirm it is titled land, not possessory land. Possessory rights are cheaper. They are also not ownership, and they are not what Decree 90-90 contemplates.
4. Confirm the urban classification if buying under Decree 90-90.
5. Notary. The transfer deed must be executed before a Honduran notary. The notary is the formal gatekeeper who executes the deed and handles the Decree 90-90 declarations. The notary is not your advocate. Retain a separate lawyer who is. (For how the civil-law notary role differs from the common-law one, see our civil law notary system explainer.)
6. Registry inscription. Ownership is not secure until inscribed. Reported timelines: 30-45 days from contract to closing, with title registration taking a further three to four months.

The mechanics of a clean title search, and why the register is the only source of truth, are covered in our guide to land registries and cadastres for foreign buyers.

Costs and taxes

Published figures vary. The ranges below are what multiple sources report; verify each with your attorney and with the Servicio de Administración de Rentas (SAR).

That last line deserves emphasis. A 25% withholding on gross rent is not a 25% tax on profit. On a property grossing $30,000 with $12,000 of costs, a gross withholding takes $7,500 from an $18,000 net, an effective rate above 41% before your home country gets involved. Model this before you underwrite a short-term-rental thesis.

Financing

There is effectively no non-resident mortgage market of the kind you would recognise in Europe. Local bank mortgages are reported at 10-14% interest with roughly 20% down, with strict requirements for foreigners.

Most foreign purchases are cash or owner-financed. The standard owner-finance structure reported on Roatán is 30-40% down, balance over one to five years at 12-14%.

Owner financing is a legitimate instrument. It is also the mechanism by which a seller who cannot prove clean title can still sell you a property. Do the title work anyway. Do it before the deposit.

The ZEDE question, stated neutrally

Roatán hosts Próspera, established in 2017 under Honduras' ZEDE (Zona de Empleo y Desarrollo Económico) framework, a legal regime permitting semi-autonomous zones with their own regulatory, tax, and dispute-resolution arrangements.

The relevant chronology:

• ZEDE law enacted 2013 under constitutional amendments passed in 2012-13.
• In April 2022, the Honduran Congress voted to repeal the ZEDE framework. The vote was 128-0.
• The Honduran Supreme Court subsequently ruled the ZEDE framework unconstitutional, with retroactive effect.
• In December 2022, Honduras Próspera Inc. and affiliates filed for arbitration at ICSID (Case No. ARB/23/2), invoking CAFTA-DR and a Legal Stability Agreement. The Request for Arbitration cited damages of up to $10.7 billion in the event of total loss of the investment; the claimant states its primary remedy sought is restitution of its ZEDE rights, with compensation as an alternative, quantified in a later filing at $1.6 billion, subject to amendment.
• Honduras notified withdrawal from the ICSID Convention in 2024. Cases filed before withdrawal continue.
• Próspera continues to operate and to build. The arbitration remains pending; no final ruling has issued.
• Nasry Asfura was sworn in as President of Honduras on 27 January 2026, following a closely contested December 2025 election.

What this means if you are buying property. Property inside a ZEDE was acquired under a legal, tax, and registry framework whose constitutional status is disputed and whose future is the subject of live international arbitration. Property outside a ZEDE, the overwhelming majority of Roatán, is governed by ordinary Honduran law and is not directly affected by the dispute.

We take no position on the merits. We state the facts because a buyer needs them: if a listing sits inside a ZEDE, the ordinary title questions above are joined by an additional, unresolved jurisdictional question. Ask which registry the title is inscribed in. Ask what happens to your title if the framework is definitively voided. Get the answer in writing.

Practical reality on the ground

Getting there. Juan Manuel Gálvez International Airport (RTB) on Roatán has direct service from several US and Central American hubs. Utila and Guanaja are reached by ferry or small aircraft.

Who lives there. Roatán's population is commonly reported at around 80,000, including several thousand foreign residents. West Bay, West End, and Sandy Bay hold the densest expat and vacation-rental concentration. The East End is quieter, more rural, cheaper, and some properties are boat-access only.

Safety. Honduras' mainland and the Bay Islands have materially different security profiles, and blanket statements about either are unhelpful. Consult your own government's current travel advisory, the US State Department, UK FCDO, and equivalents publish location-specific guidance that is updated far more often than any property article.

Utilities and services. Municipal water, power reliability, internet, and healthcare access vary substantially across the island. Visit the specific property in the wet season, not only the dry one.

Who this market suits

It works for: a cash buyer with a long horizon, who wants a Caribbean beachfront home at a fraction of the price of the developed Caribbean, who will retain independent counsel, who understands they are buying into a jurisdiction with real constitutional complexity, and who is not depending on the rental income.

It does not work for: anyone who needs financing, anyone who needs to exit within five years, anyone underwriting to a short-term-rental yield without modelling gross withholding, and anyone who is going to skip the independent title search because the developer says the title is clean.

The thing people get wrong about Roatán is not the price. The price is genuinely low. What they get wrong is that cheap beachfront in a restricted-zone jurisdiction is not a discount, it is a risk premium. You are being paid to accept Article 107, possessory-title chains, and a 25% gross withholding.

If you do the work, the premium is worth collecting. If you do not, the nullity clause is not a theoretical concern.

Frequently asked questions

Can foreigners buy property in Roatán?
Yes, under Decree 90-90, up to 3,000 m² (≈0.74 acres), for residential use, one property per person, with improvements required within three years, and only where the property qualifies as urban. Larger holdings, or additional properties, are typically held through a Honduran corporation, a structure that carries its own constitutional questions.

Why is there a 40-kilometre rule?
Article 107 of the Honduran Constitution reserves land within 40km of the coasts and international borders, and all islands, cays, and reefs, to Hondurans by birth, wholly Honduran corporations, and government institutions, under penalty of nullity. It reflects sovereignty and border-security policy.

Is Roatán inside the restricted zone?
Yes. All Honduran islands are, under the express terms of Article 107.

Do I need a visa to buy?
No. Contracts can be signed on a standard tourist visa (typically 90 days, extendable). Immigration status limits how long you can stay to manage the process, not whether you can buy.

What is the capital gains tax in Honduras?
Commonly reported at 10%, with a reduced rate cited for designated tourism zones, applying to residents and non-residents alike. Verify with the SAR.

What is Próspera and does it affect me?
Próspera is a ZEDE on Roatán. The ZEDE framework was repealed by Congress in 2022 and ruled unconstitutional with retroactive effect; an ICSID arbitration is pending. Property outside a ZEDE is governed by ordinary Honduran law. If a property is inside one, additional and currently unresolved jurisdictional questions apply.

Related reading

• Beachfront homes under $200,000: 7 countries
• Best countries to retire abroad in 2026
• The land registry problem: title security around the world
• The civil law notary system decoded

See what is available in the Caribbean now

Roatán rewards buyers who do the legal work first and shop second. JanusHermes brings verified listings and country-level intelligence across 50+ markets into one place, so you can compare the Caribbean by price and ownership rules. Browse listings on JanusHermes.

This guide is informational and reflects publicly available information as of 9 July 2026. It is not legal, tax, or investment advice, and JanusHermes is not a law firm. Article 107 imposes nullity as the sanction for non-compliant acquisition, the consequences of getting this wrong are total, not partial. Reported tax rates and fees vary across published sources and should be confirmed with the Servicio de Administración de Rentas and independent Honduran counsel before any transaction. Consult current government travel advisories for security guidance.

Sources

• Constitution of the Republic of Honduras, Article 107
• Congressional Decree 90-90 (1990) and implementing regulation
• Honduras Próspera Inc., St. John's Bay Development Company LLC, and Próspera Arbitration Center LLC v. Republic of Honduras, ICSID Case No. ARB/23/2 (pending); ICSID and UNCTAD Investment Dispute Settlement Navigator case records
• Honduras Próspera Inc. public statement on ICSID arbitration damages quantification (October 2025)
• Associated Press / Reuters reporting on the inauguration of President Nasry Asfura, 27 January 2026
• US Department of State, Investment Climate Statement: Honduras
• Instituto de la Propiedad / SINAP registry framework
• Roatán brokerage and legal practice guidance on Decree 90-90 and corporate holding structures

A note on the numbers: where no source is named, the market figures in this article (prices, yields, costs) are indicative estimates compiled from publicly available market data and industry reporting at the time of writing. Markets move and rules change, so treat them as a starting point and verify current figures with official sources before acting on them.