Buying Real Estate in Uruguay (Guide)

Taxation Researcher | January 12, 2023

How to buy a property in Uruguay? What is the purchase process like? How high are realtors´ and lawyers´ fees in Uruguay? What about other property purchase costs?

In this article we will cover an overview of what you can expect when purchasing real estate in Uruguay. We cover the costs, taxes, process and some of the legal aspects.

How difficult is the property purchase process in Uruguay?

Except for areas considered part of the national security domain, there are no restrictions on the ownership of private property or the establishment of any business. Corruption is not a serious problem in Uruguay.

Before the sale, four different non-encumbrance certificates must be presented as guarantee to the buyer. The first one from the "Banco de Provision Social" ascertains that the owner is free of any social security debt. The others are acquired at the Real Estate Office, the "Registro de Actos Personales", and the Municipality. There must be no transaction without these certificates. This process ensures that there is no pending mortgage, lien, or any other encumbrance on the property.

Transfer of title is executed before a public notary. In order for the transfer of property to occur, it must be registered in the appropriate area where the property is located. A notary is very important in the transaction as the deed will be rendered invalid without it.

Value Added Tax (VAT) does not apply to the transfer of real property

Loans are generally 30 years, and the government establishes maximum interest rates. The Mortgage Bank of Uruguay (Banco Hipotecario del Uruguay) is the only mortgage bank in Uruguay and the principal intermediary of medium and long-term funds for housing in the country.

The whole process of registering a property can be completed in around 66 days.

What are the costs like when purchasing a property in Uruguay?

Transaction Costs

Who Pays?
Notary Fee 3% buyer
Registration Tax 1% buyer
Real Estate Transfer Tax 2%
2%
buyer
seller
Real Estate Agent´s Fee 3%
3%
buyer
seller
Costs paid by buyer 9%
Costs paid by seller 5%
ROUNDTRIP TRANSACTION COSTS 14%
See Footnotes
Source: Global Property Guide



Footnotes to Transaction Costs Table


The round trip transaction costs include all costs of buying and then re-selling a property - lawyers´ fees, notaries´ fees, registration fees, taxes, agents´ fees, etc.

Notary Fee
Notary fees are around 3% of the property value. The notary fees are regulated by the Asociación de Escribanos del Uruguay, or Uruguayan Notary Association, and they set the official notary fees. Some notaries might charge less than the official rates.

Registration Tax
Registration tax is around 1% of the property value.

Real Estate Transfer Tax (Impuesto a las trasmisiones patrimoniales)
Real estate transfer tax is around 4% of the property value. The buyer and seller each pay 2% of the real estate transfer tax.