Inheritance tax and inheritance law in Paraguay

Taxation Researcher | June 30, 2022

The Global Property Guide looks at inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Paraguay: what restrictions there are and whether making a will is advisable.


Inheritance and gifts are not taxed in Paraguay.


What inheritance laws apply in Paraguay?

Which inheritance law applies?

The main laws governing inheritance in Paraguay are The Civil Code, and the Civil and Commercial Procedure Code. If a minor is involved, the Child and Teenage Code also applies.

The inheritance laws of Paraguay affect everyone who owns property in Paraguay. The Paraguayan legal system does not make any distinctions based on nationality, race, religion or gender. Foreigners have the same rights, and are treated in the same way as any other citizen.

The general principle in inheritance matters (real property excepted) is that the law of the deceased´s permanent residence applies. It makes no difference if one spouse belongs to one nationality (or religion) and the other spouse to another. However inheritance of real property located in Paraguay is governed by the law of Paraguay, regardless of the nationality and place of residence of the deceased.

The Civil and Commercial Court of the deceased´s permanent residence deals with inheritance issues. Decisions about non-resident foreigners´ property are made primarily in this court.

Inheritance cases which are not contested take approximately 4 to 6 months.

Reserved Portion.

A certain portion of the estate (the ´reserved portion´) must be distributed to certain persons, and is not available for division in accordance with the will (if any). What portion is reserved, depends on what inheritors are available.

  • If descendants are alive, 4/5th of the estate goes to them
  • If descendants are not alive, but ascendants are, 2/3rds goes to them
  • If a spouse owns property jointly with the deceased, s/he inherits ½ of the reserved portion. If not, s/he inherits the same proportion as the descendants, or 1/3 part if there are only ascendants.
  • When there are no descendants or ascendants, ½ is reserved for the spouse
  • For adopted persons, the reserved portion is ½ of that applicable to other descendants

These rules apply equally to foreigners and members of different religions. The residue of the property, i.e., that portion outside the reserved portion, can be freely willed, with no restrictions.

If there is no will, the deceased´s ascendants, descendants and spouse inherit the estate in the above mentioned proportions. If the deceased has no heirs and does not leave a will, the Government inherits the estate.

The will.

It is normal to formally make a will in Paraguay. It advisable for a foreigner to make a local will because the inheritance process is easier and faster in local courts, especially if the property is located in Paraguay.

There are four types of will, with different formalities:

Holographic will:

  • Must be written, dated and signed by the testator, in his own handwriting, on all pages.
  • Can be made in any language.

Public instrument will:

  • Must be performed before a public notary and three local witnesses.
  • The testator must manifest the will orally in front of the notary and witnesses, or read a written version in front of them. If s/he can not talk, s/he can sign the will in front of witnesses.
  • Must contain the place and date when signed, the name, ages and addresses of the witnesses, and whether oral or written.
  • If the testator cannot speak Spanish, the will must be performed before two translators, in two languages, both of which the witnesses must understand.
  • The fulfillment of these requirements must be written in the will for its validity.
  • Those who sign the act cannot be beneficiaries.

Closed will:

  • Can be handwritten or typed, and must be signed on all pages by the testator.
  • The testator must give the will to the notary in a closed envelope in the presence of five local witnesses and manifest that it contains his will.
  • The notary records the circumstances, in the front part of the enclosed will, and the notes are signed by him/her, the testator and the witnesses.
  • The testator must declare if the will is written and signed by him/her, in handwriting or typing, or written and signed by another person at his/her request. The notary must record all these circumstances.
  • The notary must seal the enclosed will so that it can not be opened without breaking. S/he must also register what was written in the front of the sealed envelope. It must be signed by the notary, the testator and the witnesses.
  • The enclosed will remains with the notary for its conservation.

The special will:

  • Members of the military who are far from the general population must make their will before an officer with rank not inferior to captain. But if there is no superior officer, they can make the will before an inferior rank officer, or the person in charge. If the testator is sick or wounded, he can give his will to the doctor who assists him. The will must be written in the presence of two witnesses and include the place, date, and names of the testator and witnesses. The will expires in 90 days if the testator survives. If he dies, the will is sent to the Defense Minister, who sends it to the judge of the last address of the testator, for its validation

A will can be made abroad, but it must be done personally by the testator, not by a representative.

An owner can freely donate property to anyone, prior to his/her death. However after an inventory of the estate is done, if such a donation includes a part of the "reserved portion", the affected heir can challenge the transaction and bring it back into the estate.

Problems of inheritance.

The law looks primarily at the title deeds to determine the owner of property. Married partners can own property jointly or separately, but if the property is not located in Paraguay, the court applies the law of the country where the married partners were living at the time of death.

Property (or part of it) may be inherited by a child or children not of legal age, or to others not legally adult. If one parents dies, the other acts as the legal guardian. A legal guardian can be appointed in the will if the minor has no parents. The court might also appoint a guardian, if necessary, who can be one of the parents, an older brother, an uncle, or another responsible person outside the family.