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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.

rented

3 Bedroom San Isidro Apartment for Rent Faci...

$ 2,000 per month
Classically furnished 3 bed/3.5 bath – 376m2 – apartment with amazing views of Lima Golf for rent in San Isidro, Lima, Peru. 4389 | PEZET 3 Bedrooms, 3.5 Bathrooms Spacious Living / Dining [more]
Classically furnished 3 bed/3.5 bath – 376m2 – apartment with amazing views of [more]
33.5 276 m2full info

Best Views in Lima from 580m2 Miraflores Mal...

$ 10,000 per month
4390 | MALECON 28 DE JULIO ALSO AVAILABLE FOR SALE $ 1,6100,000 4 Bedrooms all En-Suite + 2 Visitors’ Baths 100m2 Terrace with BBQ and Jacuzzi for people Huge, Modern Kitchen with Imported Tile Large [more]
4390 | MALECON 28 DE JULIO ALSO AVAILABLE FOR SALE $ 1,6100,000 4 Bedrooms all En-Suite + [more]
46 480 m2full info

Miraflores Malecon Penthouse for Sale in Lim...

$ 1,610,000
100% remodeled Malecon 28 de Julio Penthouse offering the absolute best views of the Pacific and Bajada Balta. ALSO AVAILABLE FOR RENT $10,000 PER MONTH 4390 | MALECON 28 DE JULIO 4 Bedrooms all En-Su [more]
100% remodeled Malecon 28 de Julio Penthouse offering the absolute best views of the Pacif [more]
46 580 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 m2full info
20

Malecon Cisneros Penthouse Duplex For Sale i...

$ 1,295,000
Located on the best part of the Miraflores Malecon Front of the Landmark el Faro (Lighthouse). This 368m2 ,4 bedroom duplex penthouse features a 40m2 terrace and pool overlooking the Costa Verde. This [more]
Located on the best part of the Miraflores Malecon Front of the Landmark el Faro (Lighthou [more]
43.5 368 m2full info

Spacious Light-Filled Apt. on Barranco Malec...

$ 599,000
This is a classic, spacious apartment with large open rooms, tons of storage and quality finishes. With tons of Windows this unit offers a nice Cross-breeze and lots of natural light throughout the en [more]
This is a classic, spacious apartment with large open rooms, tons of storage and quality f [more]
33.5 247 m2full info

Turn-key Bed & Breakfast For Sale in Cus...

$ 475,000
Located between Cusco and Ollantaytambo Income from Rooms and the Resale of a Variety of Area Tour Packages 5 Very Large Rooms Easily Reconfigured to Increase Total Number of Rooms and Income Addition [more]
Located between Cusco and Ollantaytambo Income from Rooms and the Resale of a Variety of A [more]
65 418 m2full info

Boutique Hotel For Sale in Mancora, Piura Pe...

$ 485,000
Mancora Peru boutique hotel for sale — don’t miss this life changing opportunity to become a boutique hotelier in the beautiful beach area of Máncora, in the North of Perú. HTL101 MANCORA [more]
Mancora Peru boutique hotel for sale — don’t miss this life changing opportuni [more]
710 520 m2full info

Incredible 4 Bedroom Beach House For Sale in...

$ 420,000
Experience breathtaking, 180 degree panoramic views from this amazing 4 bedroom beach house for sale in Asia, 122 km south of Lima, Perú. BHS102 Punta Corrientes Playa Punta Corrientes KM122.3 Panamer [more]
Experience breathtaking, 180 degree panoramic views from this amazing 4 bedroom beach hous [more]
44.5 300 m2full info

Luxury Miraflores Peru 3 Bedroom Apartments

$ 915,000
16 luxury Miraflores apartments designed by acclaimed architect Mario Lara still available at pre-sale prices. 4198 | VANDERGHEN Just completed, these apartments are the highest quality apartments on [more]
16 luxury Miraflores apartments designed by acclaimed architect Mario Lara still available [more]
22.5 0 m2full info
sold

Asia Peru Beach House for Sale in a Gated Co...

$ 175,000
Enjoy direct direct ocean views from this 148m2 perfect Asia Peru beach house for sale in a gated community, Asia del Sol in Sarapampa Cañete Peru. BHS 101 – KM 108, ASIA DEL SOL 5 year-old Trip [more]
Enjoy direct direct ocean views from this 148m2 perfect Asia Peru beach house for sale in [more]
33.5 148 m2full info
rented

Beautiful House in San Isidro for Rent Furni...

$ 6,000 per month
Gorgeous house for rent in San Isidro Lima Peru. Designed and built by the owner 25 years ago in the most exclusive and quiet location in San Isidro. ID# HR112 ALFREDO SALAZAR Rent this perfect house [more]
Gorgeous house for rent in San Isidro Lima Peru. Designed and built by the owner 25 years [more]
46 380 m2full info

Miraflores Peru Apartment for Sale with Amaz...

$ 1,450,000
Huge 4 bedroom Miraflores Peru oceanfront apartment for sale on exclusive Malecón de la Reserva. This truly is one of the nicest apartments for sale in Lima. ID# ARS106 MALECON DE LA RESERVA Enjoy inc [more]
Huge 4 bedroom Miraflores Peru oceanfront apartment for sale on exclusive Malecón de la Re [more]
43.5 405 m2full info

Miraflores Peru Home for Sale in La Aurora N...

$ 1,580,000
Gorgeous remodeled Miraflores home for sale in La Aurora area of Lima Peru. HS102 GENARO CASTRO IGLESIAS A must see, beautifully remodeled home in the tranquil La Aurora neighborhood of Miraflores Per [more]
Gorgeous remodeled Miraflores home for sale in La Aurora area of Lima Peru. HS102 GENARO C [more]
35 480 m2full info

Miraflores House For Sale in Lima Peru

$ 1,000,000
Unique modern 3 story Miraflores house for sale in Lima Peru. HS116 CAPITAN JOSE QUIÑONES Gorgeous house for sale in prime Miraflores location completely remodeled 2 years ago by Architect Nicolas Bri [more]
Unique modern 3 story Miraflores house for sale in Lima Peru. HS116 CAPITAN JOSE QUIÑONES [more]
46 400 m2full info
13

Miraflores Offices for Rent in Lima Peru

From $ 600 per month
We have a variety of offices for rent in Miraflores Lima Peru. The offices for rent range in size from 35 square meters to 150 square meters. We also have houses that are offices for rent too. These o [more]
We have a variety of offices for rent in Miraflores Lima Peru. The offices for rent range [more]
1.5 85 m2full info
22

Large 1 Bedroom Magalena Del Mar Lima Peru

$ 99,900
81m2, 1 bedroom apt w/ huge family room easily converted back to original floor plan of 3 bedrooms Light – Filled 9th floor Unit with Practical Layout
81m2, 1 bedroom apt w/ huge family room easily converted back to original floor plan of 3 [more]
12 81 m2full info

Miraflores Perú Oceanfront 3 Bed Luxury Apar...

$ 529,000
Breathtaking 2000 sf luxury 3br condo on Malecon Cisneros in Miraflores. Ocean, park and city views from every room attained by its wrap around design, with the award winning Parque Raimondi (best in [more]
Breathtaking 2000 sf luxury 3br condo on Malecon Cisneros in Miraflores. Ocean, park and c [more]
32.5 180 m2full info
sold

255m2, New Construction, 3 bed / 3.5 bath Sa...

$ 918,000
This truly perfect San Isidro Peru 3 bedroom flat for sale facing park in Santa Teresita features only the finest finishes. Direct View to Park from living / Dining Area and Master Bedroom. Living / D [more]
This truly perfect San Isidro Peru 3 bedroom flat for sale facing park in Santa Teresita f [more]
33.5 255 m2full info

San Isidro Peru 3 Floor Penthouse Apartment ...

$ 2,200,000
Amazing, 750m2 San Isidro penthouse for sale on top 3 floors of a new building facing a park in San Isidro, Lima, Peru. This masterpiece features only the vert best finishes, a pool, outdoor jacuzzi, [more]
Amazing, 750m2 San Isidro penthouse for sale on top 3 floors of a new building facing a pa [more]
46 620 m2full info

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