When it comes to purchasing property in Uruguay there are no restrictions for foreign buyers. You can buy land anywhere and you can do so as an individual or a corporation.
The purchase process requires the assistance of by an “Escribano/a” (a conveyancing attorney),.
The Role of the Escribana/o is as follows:
- Analyses the ownership history and other details to ensure you are buying a property without debt.
- Drafts the Offer to Purchase Agreement and the Final Purchase Documents.
- Acts as an Escrow agent for the deposit payable on the property.
- Recording the purchase at the Property Registry and Proof of Ownership (Title Deeds and Deeds Registry)
The Purchase Process: Step by Step
- The buyer selects a property, agrees on the price with the seller.
- The buyer appoints an Escribana/o who will draft the “Boleto de Reserva”, (Offer to Purchase).
- Agreement must be reached with regards to the deposit. payable.Usually 10% of the price but depending on the circumstances other agreements may be negotiated.
- The deposit remains in safe keeping with the Escribano/a and is only handed to the seller once the deal is concluded.
- Both the buyer and the seller will sign the Boleto de Reserva”, (Offer to Purchase)
- A penalty clause must be included in this document in case either party breaches the commitment. The amount must be agreed upon by the buyer and seller.
- A 30-60 day window is allowed to verify the deeds.
- A closing date is set on which the final Purchase documents will be signed, the full price is paid and the property is transferred to you.
The total transaction (transfer fees payable are approximately 8-9%:
1. .Real Estate Agent Fee: 3% plus VAT (22%) = 3.66%
2. Conveyance Attorney Fee: 3% plus VAT (22%) = 3.66%
3. Deed Registration Stamp Duties (“Montepios”): 0.55%
4. Registry and Tax Certificates Stamp Duties: USD 700 on average
5. Property Transfer Tax: 2% of the Fiscal Value of the Property (which is usually substantially lower than the market value: 0.6% est.)
The Transaction Costs when selling:
- Real Estate Agent Fee: 3% plus VAT (22%) = 3.66%
- Property Transfer Tax: 2% of the Fiscal Value of the Property (0.6% est.)
- Capital gains tax of 12%
Other Property taxes:
- There are two yearly taxes to be paid i.e Municipal and School Tax. Together, they average less than 1% of the value (avg. 0.5%)
- Rental Income Tax is a flat rate of 10.5% when renting out your property.