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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.

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

$ 1,600,000
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]
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$ 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

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

$ 485,000
Unique opportunity to become a boutique hotelier in the beautiful beach area of Máncora, in the North of Peru.  This fully-furnished hospitality property is situated near the beach, 0.5 mi (0.7 km) fr [more]
Unique opportunity to become a boutique hotelier in the beautiful beach area of Máncora, i [more]
710 520.00 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 85.00 m2full info

Beautiful Rustic House and Land for Sale in ...

$ 40,000
On offer is a beautiful piece of land with a rustic house. The land is 800m2 (20x40m) and is fully fenced. There is an established garden including a number of fruit and palm trees (mango, aguaje, sin [more]
On offer is a beautiful piece of land with a rustic house. The land is 800m2 (20x40m) and [more]
21 70.00 m2full info

Tarapoto 1000m2 Plot of Land for Sale

$ 50
Beautifully located on the outskirts of the tranquil village of Chirapa (rainbow in Quechua), just 10 km from Tarapoto (San Martin). The land is west oriented  and has a magnificent sunset view over t [more]
Beautifully located on the outskirts of the tranquil village of Chirapa (rainbow in Quechu [more]
vicetserge

Land and Property in The Amazon, Peru

$ 75,000
An unique opportunity. Traditionally built houses with 8000m² land in the heart of the Peruvian Amazon, a total of 5 buildings each constructed with durable sustainably sourced materials. The main hou [more]
An unique opportunity. Traditionally built houses with 8000m² land in the heart of the Per [more]
73 450.00 m2full info

Las Brisas de Villa, Chorrillos, House

$ 330,000
Modern, Light-filled, 5-year-old home located in the second row of Las Brisas de Villa.  FIRST LEVEL: Entry hall, Study (or guest bedroom), complete bathroom, Storage room, Interior garden, Living/din [more]
Modern, Light-filled, 5-year-old home located in the second row of Las Brisas de Villa.  F [more]
33 240.00 m2full info
24

San Isidro, Mario Lara, Penthouse

$ 1,590,000
Spectacular penthouse designed by the famous Architect Mario Lara, ideally located in the heart of San Isidro in a boutique building of only 7 apartments.  Mario Lara, San Isidro, 7th and 8th-floor, 4 [more]
Spectacular penthouse designed by the famous Architect Mario Lara, ideally located in the [more]
46 460.00 m2full info

Pucusana Perú Country House near the Beach

$ 329,000
Pucusana Condomino El Olivar country / beach house of 3 bedrooms, located in a quiet and secure gated community just 5 minutes by car from Playa Pucusana beach and 3 minutes from Playa Naplo. The hous [more]
Pucusana Condomino El Olivar country / beach house of 3 bedrooms, located in a quiet and s [more]
32.5 195.00 m2full info

Miraflores Home on Calle Roma near Malecón C...

$ 2,200,000
Classically styled, Remodeled 50’s era, 3 bedroom, 467 m2 Miraflores home, a half of a block from Malecon Cisneros in Lima Peru. Open Receiving Area and Formal Living Room with Fireplace 2 Large, Open [more]
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33.5 465.00 m2full info
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Casuarinas Alta Lot of 2066m2 Santiago de Su...

$ 1,350,000
Huge lot in exclusive Casuarinas Atla between Jiron Flor de Roca and Calle Puente al Sol, to build a large single family home. CASUARINAS ALTA For more information and /or to schedule a visit to see t [more]
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20

Malecon Cisneros Penthouse Duplex For Sale i...

$ 1,100,000
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]
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43.5 368.00 m2full info

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