Who can buy property in Peru?
Foreigners have the right to purchase and own property in Peru, and they share the same status as Peruvian citizens in terms of property ownership, as outlined in Article 71 of the Constitution of Peru.
If you reside outside of Peru, you can acquire real estate in the country by granting power of attorney to your lawyer or another representative at the Peruvian Consulate in your country or through a foreign Notary. For those present in Peru as tourists, it is essential to obtain permission from “Migraciones” before entering into any sales and purchase agreements.
Do the research
Peru is known for its rich cultural heritage, including the ancient Inca civilization and the iconic Machu Picchu, a UNESCO World Heritage site. The country has diverse geography, encompassing the Andes Mountains, the Amazon Rainforest, and the Pacific coastline.
Here are several desirable locations for real estate investments:
- Lima - As the capital and largest city, Lima is a major hub for business, culture, and government. Different districts within Lima, such as Miraflores, San Isidro, and Barranco, have been known for their attractiveness to real estate investors due to amenities, safety, and proximity to the ocean.
- Arequipa - This city is Peru´s second-most populous and is known for its historical architecture and vibrant culture. Areas like Yanahuara and Cayma have been popular for real estate investment.
- Cusco - Cusco, a UNESCO World Heritage Site, is a major tourist destination, especially with the iconic Machu Picchu nearby. The city´s historic charm and tourist appeal contribute to the attractiveness of its real estate market.
- Trujillo - Located in northern Peru, Trujillo is known for its archaeological sites and colonial architecture. The city has experienced economic growth, and its real estate market has reflected this development.
Where to find properties online:
Foreigners have the opportunity to secure property loans in Peru, as the Peruvian banking system permits non-residents to apply for such loans, provided they meet certain conditions and requirements.
To qualify for a property loan in Peru as a foreigner typically involves having a valid residence permit, providing proof of income or employment, and meeting the specific criteria set by lending institutions.
Several banks in Peru, including Banco de Crédito del Perú (BCP) and Interbank, are known to extend mortgages to foreigners.
Property Visits and Preliminary Contract
In Peru, a crucial step in the property purchase process is the requirement for a preliminary contract known as "Minuta de Compra-Venta." This formal document serves as a legally binding agreement that outlines the terms and conditions between the buyer and the seller. Its significance lies in ensuring the legitimacy and fairness of the transaction.
The Minuta de Compra-Venta generally encompasses key details such as a description of the property, the agreed-upon price, payment terms, and the respective obligations of both parties involved in the transaction.
Due Diligence and Sales Contract
Conducting comprehensive due diligence on the property is essential, given the potential existence of irregular real estate issues. This involves examining the property´s registration in the Public Registry, confirming the clarity of property boundaries that align with official records, and verifying the presence of all required permits and approvals.
Due to the complexity of this process in Peru, it is recommended to engage the services of a local lawyer with expertise in real estate transactions.
Property Buying Costs and Taxes in Peru
|Transfer Tax (Alcabala)
|0.10% - 0.25%
|Real Estate Agent´s Fee
|3.00% - 5.00%
|Costs paid by buyer
|3.91% - 4.06%
|Costs paid by seller
|3.00% - 5.00%
|ROUNDTRIP TRANSACTION COSTS
|6.91% - 9.06%
|Source: Global Property Guide