Property in Uruguay has become very popular with the expat community. The beaches are wonderful, the country has a rich cultural history, the architecture is fabulous and the pace of life is relaxed. Because of all the wonderful things Uruguay has to offer, expats are choosing to buy property in Uruguay for either part-time or full-time living. The best part: Because Uruguay is so popular, you can rent your house or apartment to other expats when you aren’t there!
There are some standard questions that show-up whenever people are considering buying a house or apartment in Uruguay. This post should answer many of the standard questions.
Are there restrictions about who can buy property in Uruguay, or the types of property foreigners can own?
There are no restrictions for foreigners who wish to buy property in Uruguay. Ownership can be in the name of an individual, a domestic company or a foreign company. The Uruguayan government is very accommodating to foreign investors.
There are some restrictions on ownership of property in Uruguay that everyone must honor when it comes to agricultural property.
The first thing to know is that agricultural land can be owned by any person or legal entity (just like all the other property in Uruguay) BUT it must be owned in the name of a person, or a company that has publicly listed individuals as owners. Basically, the Uruguayan government doesn’t want anonymous or unknown people controlling the agricultural land because agricultural land provides the food supply for the Uruguayan people!
The second restriction is also related to agricultural land. Any property over 500 hectares in size must first be offered to the Uruguayan government for purchase before a private entity can buy it. The Instituto Nacional de Colonización is the government body responsible for populating (and re-populating) the rural areas of Uruguay. If the I.N.C. decides they would like to purchase the land, they will pay a fair market price for it.
How do real estate commissions work in Uruguay?
The commission rates vary slightly from broker to broker, but most firms in Uruguay will charge 3% commission per side. In most scenarios where a broker is involved, the buyer’s broker gets paid 3% and the seller’s broker gets paid 3%.
Instead of the seller paying the entire 6% commission and relying on the broker’s to divide it amongst themselves, each party to the transaction pays their own broker. The buyer pays 3% to their agent and the seller pays 3% to their agent. Also, the agents’ commission is subject to 22% VAT which is paid by each party to the transaction.
Can I get a mortgage in Uruguay as a foreigner?
It is very difficult for foreigners to get mortgages in Uruguay unless they are full-time residents who are legally working in Uruguay and paying income taxes in Uruguay. Most foreigners should plan to pay cash.
It is not common for sellers to finance properties and many sellers have never even heard of that as an option, so it is not worth pursuing that option unless the seller has proactively stated they will finance a mortgage.
Who is responsible for the paperwork in the property transaction?
All property transactions in Uruguay require the services of an escribano (notary). Escribanos manage all of the paperwork for the buyers, sellers and government.
The escribanos are responsible for drafting sales contracts, recording deeds and doing title searches to make sure everything is in order. They work with the appropriate government offices to ensure that everything in the transaction is done properly.
What are the transaction fees for Uruguay property purchases and sales?
- Commission – 3% plus VAT
- Transfer tax (ITP) – 2% of the government-assessed value of the property (usually much less than the actual property value). Both the buyer and the seller will pay 2% of the assessed value.
- Registration and stamp duties – 1-3%
- Notary – 3% plus VAT
- Translations of legal documents and other legal services (if needed) – price varies
How long will it take to buy a property in Uruguay?
The entire transaction from start to finish should take no more than two months. There are sometimes delays, but two months is a good estimate.
Are there any restrictions on short-term rentals in Uruguay?
At the time of this writing (spring 2021), there are no short-term rental restrictions. Many property owners who do not live in Uruguay full-time decide to offer their properties on short-term rental websites such as Airbnb.
Where can I search available property listings in Uruguay?
We have a list of properties for sale in Uruguay that is regularly updated here.