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Buying Real Estate in Peru as a Foreigner

Guide to Buying Peru Real Estate

As an Escape Artist reader, you’re likely always on the lookout for great new locations to purchase real estate in. Well, put Peru on your list. In this guide we will give you the process for buying real estate in Peru as a foreigner.

Right now is the perfect time to purchase real estate in Peru. The country boasts the strongest growing economy in all of Latin America, due in no small part to the fact that Peru’s president is former World Bank economist Pedro Pablo Kuczynski.

What’s even better still is that recent legislation passed which greatly reduces the tax burden for non-domiciled owners, meaning foreigners such as yourself. The capital gains tax for non-domiciled owners of Peruvian real estate was reduced from 30% to 5%. Compare that rate to other nations, such as the UK, where a non-dom will face a capital gains tax between 18-28%, or in the U.S., where, according to the Foreign Investment in Real Property Tax Act (FIRPTA), non-doms will face capital gains taxes on real estate equal to income tax rates. This translates into a capital gains tax reaching a maximum of 20% for non-doms purchasing real estate in the U.S.

In short, you are likely to pay significantly less in capital gains taxes from real estate purchases as a foreigner in Peru than many other nations. This makes a real estate purchase in Peru a very tax-efficient investment. And with the nation’s strong economy, a real estate investment in Peru is even more enticing.

Let’s examine the process and culture of buying real estate in Peru.

To begin with, while it is always encouraged to involve an experienced real estate attorney in the purchase of real estate, especially foreign real estate, in practice, most residential property transactions in Peru are completed without a lawyer representing either party.

Secondly, it is important to know that most real estate transactions in Peru are done in cash. This is the culture of real estate in this country, especially true for foreigners. The reason for this is two-fold. First, it can be difficult as well as very time consuming for a foreigner to develop a strong enough relationship with a Peruvian bank to get a loan, and any loans that a foreigner might receive would have less than ideal interest rates, typically in the double digits. Secondly, Peruvian sellers are likely to take offers slightly less than the asking price if the purchase is made in cash, meaning that a cash purchase of real estate is likely to be cheaper than the alternative, mortgage-based purchase. Therefore, it is best to make any purchase of real estate in Peru outright in cash.

Another cultural difference between buying real estate in Peru and the United States is the role that home inspections play in the buying process. In the U.S., it is common for would-be buyers to complete a home inspection after putting down some earnest or, as it’s known in Peru, arras money. They also typically will be refunded their earnest money if they are not able to complete full payment within the time limit specified for purchase.

In Peru, home inspections are much less common. In addition, foreign buyers of real estate are at a much higher risk of losing their earnest or arras money, which is typically 10%, if they are not able to complete the full payment of the purchase within the specified time limit. While this may seem like a disadvantage, keep in mind that, in Peru, if the seller walks away from a deal after completing the arras agreement, they are liable to the would-be buyer for twice the established amount.

Once again, it should be noted that these practices describe “typical” real estate transactions in Peru, but that every transaction can be different. This is where the expertise of an experienced real estate attorney can come in handy, or at the very least, a good amount of due diligence on the part of the foreign buyer.

The role of public notaries, or notarias, in Peruvian real estate and legal culture is also slightly different than in the U.S. Notarias are more involved in the process than public notaries are in the U.S., often to the benefit of both parties. For instance, the notaria will work directly with Sunarp, the government agency responsible for the official property registration. Together, they essentially perform the duties of a title company in the U.S., ensuring that the sellers are the rightful and complete owners of the property and are thereby eligible to sell it. And of course, an agreed upon notaria will be able to make a legal sales contract between the buyer and seller, much the way regular notary publics work in the U.S.

Finally, there is the issue of taxes. Before the actual closing of the deal at the notaria, appropriate taxes must be paid by the buyer and seller. When the escritura, the document Sunarp uses to officially register the property, is drafted, the property taxes through the remainder of that calendar year must have been paid by the seller, and exemptions must have been submitted. For their part, the buyer must pay an acabala, which is a sales tax equal to 3% of the sales price, unless they are purchasing directly from a builder, in which case the acabala is not necessary. It is also generally the custom that the buyer will pay all notary fees, which typically range between 1500 and 2500 Peruvian sols.

That covers the majority of the processes of buying real estate in Peru as a foreigner. Although the process is a bit different than in other countries, if a foreigner can understand these few differences and intricacies of the process, they can find themselves owning prime real estate in Peru. With its strong economy and tax-friendly foreign ownership structure, purchasing real estate in Peru is an attractive prospect that many foreigners are sure to pursue.

If you have any further questions about buying real estate in Peru please contact our Peru real estate agent – Tim Brace. Also Tim offers a Lima Peru real estate tour.

Please check out our Peru real estate listings.

Andean Mountain Ecolodge, Organic Farm, and ...

$ 950,000
Andean ecolodge, organic farm, and education center, located on 6 hectares at the base of Huascaran National Park in Carhuaz, Ancash, Perú. Eco-lodge and Education center on 3 hectares / 7.4 acres for [more]
Andean ecolodge, organic farm, and education center, located on 6 hectares at the base of [more]
1618 2,000.00 m2full info

Cusco Sacred Valley Guest Villas

$ 750,000
3 separate, fully furnished, 2+  bedroom, 200m2 villas, designed consciously, utilizing natural materials and being as kind to the land as possible. SACRED VALLEY The Sacred Valley of Peru, along the [more]
3 separate, fully furnished, 2+  bedroom, 200m2 villas, designed consciously, utilizing na [more]
66 547.00 m2full info

Sacred Valley Cusco Peru Bed & Breakfas...

$ 750,000
Boutique, 4 room Bed & breakfast +  2 bedroom owner’s home designed consciously, utilizing natural materials and being as kind to the land as possible. Nothing was rushed in the construction: adob [more]
Boutique, 4 room Bed & breakfast +  2 bedroom owner’s home designed consciously, utili [more]
6.5 445.00 m2full info

Cusco Peru Sacred Valley Bed & Breakfas...

$ 1,500,000
Boutique, 4 room Bed & breakfast +  2 bedroom owner’s home and adjoining, sister property of 3, fully independent, 2+  bedroom, approx.  200m2 villas.  Both properties were designed consciously, u [more]
Boutique, 4 room Bed & breakfast +  2 bedroom owner’s home and adjoining, sister prope [more]
1212.5 992.00 m2full info

Las Palmeras de Bocapan Beach House in Zorri...

$ 325,000
Cozy, yet modern beach house in the exclusive Las Palmeras de Bocapán Condominium, next to the hotel Casa Andina Select Zorritos MAIN LEVEL – 4 bedrooms, all with air conditioning, a fan, bedsid [more]
Cozy, yet modern beach house in the exclusive Las Palmeras de Bocapán Condominium, next to [more]
44.5 232.00 m2full info

San Ramon Chancahmayo Peru Country House on ...

$ 1,100,000
The most beautiful House in the Central Jungle. Located in the beautiful city of San Ramon, just 3 minutes from downtown. The spacious land of 31,000m2 (3.1 hectares) is ideal for Ecolodge projects, b [more]
The most beautiful House in the Central Jungle. Located in the beautiful city of San Ramon [more]
63 646.00 m2full info

Beach Lot, Playa Los Organos, Piura, Peru

$ 249,000
1044m2, first-row beach lot on Playa Grande, Playa Los Organos near Mancora in Talara Piura.  Playa Los Organos is the perfect beach for EcoTurismo activities featuring turtles, whales, Kite surfing a [more]
1044m2, first-row beach lot on Playa Grande, Playa Los Organos near Mancora in Talara Piur [more]

Sacred Valley, Urubamba, Cusco House For Sal...

$ 416,000
Cozy yet spacious Sacred Valley home in the Maccopata district of Rumichaka Alta near Urubamba in Cusco, Perú.  This cozy yet spacious Sacred Valley property is located on a plot of 1610m2 of land and [more]
Cozy yet spacious Sacred Valley home in the Maccopata district of Rumichaka Alta near Urub [more]
52 235.00 m2full info

Las Brisas de Villa, Chorrillos, Beach House

$ 370,000
Modern, minimalist Las Brisas de Villa Chorrillos house of  3+ bedrooms features clear ocean views from the home’s second floor.  This light-filled and practically designed, 5-year-old house, is [more]
Modern, minimalist Las Brisas de Villa Chorrillos house of  3+ bedrooms features clear oce [more]
33 240.00 m2full info

Miraflores Malecon, Penthouse, Larcomar

$ 1,990,000
Miraflores Penthouse overlooking Larcomar and the Costa Verde for sale $1,990,000 or rent $5,000 per month fully and exquisitely.  Miraflores Penthouse duplex overlooking Larcomar, the famous outdoor [more]
Miraflores Penthouse overlooking Larcomar and the Costa Verde for sale $1,990,000 or rent  [more]
35.5 330.00 m2full info

Amazonian Eco-Lodge and Spa Iquitos Peru

$ 130,000
For sale are 2 adjacent properties overlooking the Amazon Rainforest, 30 minutes by car from the city of Iquitos. Located along the only all-weather-road in the area these properties are 14 km from th [more]
For sale are 2 adjacent properties overlooking the Amazon Rainforest, 30 minutes by car fr [more]
1,800.00 m2full info

La Punta Callao Perú Malecon Mansion

$ 1,450,000
Beautiful sea-side mansion built in original 1946, with beautiful details of the time such as large stained glass windows, marble floors, and a magnificent distribution. FIRST LEVEL: Receiving hall, s [more]
Beautiful sea-side mansion built in original 1946, with beautiful details of the time such [more]
63 966.00 m2full info

Amazon Eco-Lodge, Tarapoto, Perú

$ 365,000
Property Summary  Total area 1.48 hectares, acclaimed accommodations (TripAdvisor, booking, social networks) 4 bungalows, 1 kitchen/dining room and 1 house (with the potential to become 2 apartments), [more]
Property Summary  Total area 1.48 hectares, acclaimed accommodations (TripAdvisor, booking [more]

5599 M2 of Land on Lake Piuray in Urubamba, ...

$ 380,000
5599m2 of land for sale located to the side of the Piuray lake, 10 minutes far from Chinchero, 30 minutes from main square in Cusco, 30 minutes far from Urubamba (Sacred Valley) 15 minutes from the in [more]
5599m2 of land for sale located to the side of the Piuray lake, 10 minutes far from Chinch [more]

First Row 5 Bed / 5.5 Bath Beach House in Pl...

$ 1,250,000
Unique, Bi-Level, “Primer Fila,” 5 Bedroom Beach House in Playa Bora Bora, Asia, Peru. 5 Bedrooms, All En Suite, 5.5 Baths in Total Open Living / Dining Area w/ Bar Bi-level Terrace with Pool and BBQ [more]
Unique, Bi-Level, “Primer Fila,” 5 Bedroom Beach House in Playa Bora Bora, Asia, Peru. 5 B [more]
55.5 450.00 m2full info
19

Antioquia Club Sierra Morena 5 Bedroom House

$ 1,190,000
Cieneguilla / Antioquia exclusive Club Sierra Morena 5 bedroom, fully furnished 550m2 home + 300m2 terrace on 6840m2 of land. 550 m2 Covered on 3 Levels 5 Ample Bedrooms, 5.5 Baths + 2 Service Rooms a [more]
Cieneguilla / Antioquia exclusive Club Sierra Morena 5 bedroom, fully furnished 550m2 home [more]
55.5 850.00 m2full info
40

Barranco Penthouse Malecon Paul Harris, Lim...

$ 4,650,000
ASP 200 | MALECON PAUL HARRIS 10-year-old Barranco penthouse duplex (floors 8 and 9) of 1,100 m2, with impressive sea view, fully equipped to live comfortably all year round. This modern Penthouse fea [more]
ASP 200 | MALECON PAUL HARRIS 10-year-old Barranco penthouse duplex (floors 8 and 9) of 1, [more]
47 1,100.00 m2full info
28

Chorrillos Beach House Las Brisas de Villa

$ 470,000
Truly unique,  5 bedroom, first-row, Chorrillos Beach house with a separate 120m2 guest house on 900m2 of land, makes this the perfect home for entertaining. LAS BRISAS 5 Bedroom + Office,  3.5 Bath,5 [more]
Truly unique,  5 bedroom, first-row, Chorrillos Beach house with a separate 120m2 guest ho [more]
85.5 620.00 m2full info

Huaraz Eco-Lodge at the Foot of Cordillera B...

$ 1,750,000
Opportunity to purchase a unique property/business of Luxury accommodations for 18 – 20 people at the foot of the Cordillera Blanca Mountains, the highest mountains in the Andes! Unique and enri [more]
Opportunity to purchase a unique property/business of Luxury accommodations for 18 – [more]
98 336.00 m2full info

4 Bedroom Beach House in Playa Puerto Nuevo

$ 550,000
KM 70, 4 Bedroom Beach house facing private lagoon in Puerto Nuevo, Mala. 4397 | PLAYA PUERTO NUEVO 4 Bedrooms all En-Suite + Visitor’s Baths Combined Living / Dining Area Separate Family Room Terrace [more]
KM 70, 4 Bedroom Beach house facing private lagoon in Puerto Nuevo, Mala. 4397 | PLAYA PUE [more]
44.5 278.00 m2full info

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