Property Taxation in Peru

Non-resident individuals are generally taxed in Peru only on Peruvian-source income, including income and taxable gains arising from real estate situated in Peru.

Income Tax

Peruvian individual income is divided into five principal categories:

1. First Category: Rental and leasing income

2. Second Category: Investment income and certain capital gains

3. Third Category: Business income

4. Fourth Category: Independent professional income

5. Fifth Category: Employment income

The tax treatment depends on the category of income and the taxpayer's domicile status. For 2026, Peru's official Tax Unit (Unidad Impositiva Tributaria or UIT) is PEN 5,500.

Rental Income

Income from leasing Peruvian real estate constitutes First Category income.

The standard calculation provides a 20% statutory deduction from gross rental income, with a 6.25% tax applied to the resulting net amount. This produces an effective income-tax rate of 5% of gross rental income.

Therefore:

Gross rental income × 80% × 6.25% = 5% of gross rental income.

From 1 January 2026, First Category rental income is generally recognized for tax purposes when the rent is actually received rather than when it accrues.

A deemed rental-income rule can also apply to property provided free of charge or at an undetermined rent, generally based on 6% of the property's value declared for property-tax purposes.

Capital Gains Tax

Capital gains derived by an individual from the disposal of Peruvian real estate are generally subject to an effective income-tax rate of 5%.

The taxable gain is broadly determined by reference to the disposal proceeds less the property's allowable tax basis and applicable adjustments.

The 5% tax applies to the taxable capital gain, rather than the property's entire selling price.

Municipal Sales Tax (Impuesto de Promoción Municipal)

The rules regarding transactions subject to VAT also apply to municipal sales tax, which is levied at a flat 2% rate.

Corporate Taxation

Companies incorporated in Peru are generally subject to 29.5% corporate income tax on net taxable income.

Expenses necessary to generate taxable income or maintain its source are generally deductible, subject to statutory requirements, restrictions and limitations.

Rental income earned by a Peruvian company is generally included in its taxable business income and is therefore ordinarily subject to the 29.5% corporate income tax rate on net taxable profit, rather than a separate 30% rental-income tax.

Taxable gains from the disposal of real estate by a Peruvian company are likewise generally included in corporate taxable income and subject to the ordinary 29.5% corporate income tax rate. The separate 10% capital-gains rate and 5% withholding mechanism described in the original text should not be used as the general rule for Peruvian corporate real-estate gains.

Property Buying and Selling Costs/Taxes

Property Tax

Peru levies an annual Real Estate Tax (Impuesto Predial) on the value of real estate. The tax is administered by the municipality in which the property is located, and the person who owns the property on 1 January of each year is generally liable for that year's tax.

The taxable base is determined using the property's municipal assessed value, taking into account the value of the land, buildings and other taxable improvements.

Peru uses the Unidad Impositiva Tributaria (UIT) to establish the applicable property-tax brackets. For 2026, one UIT is PEN 5,500.

Real Estate Tax

Real estate tax is deductible for business income tax purposes.