How to Buy Property in Uruguay as a Foreigner
Who can buy property in Uruguay?
There are no limitations on the types of properties foreign buyers can purchase in Uruguay. Foreign nationals enjoy the same property rights as Uruguayan citizens and are free to engage in any economic activities they choose.
Do the research
Investing in Uruguay real estate offers several advantages. The country has a stable political and economic environment, making it one of the safest investment destinations in Latin America. Uruguay’s real estate market provides solid long-term growth potential, particularly in cities like Montevideo and popular coastal areas such as Punta del Este. Property prices are relatively affordable compared to other regions, with opportunities for appreciation as demand continues to rise, especially from foreign investors. Uruguay’s strong legal framework guarantees property rights for locals and foreigners alike, and there are no restrictions on foreign ownership. Additionally, the country’s attractive tax policies further enhance the appeal of investing in its real estate market.
Here are some sought-after destinations for real estate investment in Uruguay:
- Montevideo - As the capital city and economic center of Uruguay, Montevideo is a prime location for residential and commercial real estate. Key areas like Pocitos, Carrasco, and Punta Carretas are particularly popular for their vibrant lifestyle, modern amenities, and proximity to the beach. Montevideo offers a range of luxury apartments and homes, making it a top choice for investors.
- Punta del Este - This renowned beach resort city is famous for its stunning beaches, high-end real estate, and vibrant nightlife. Areas like La Barra, José Ignacio, and Punta Ballena are ideal for luxury villas, holiday homes, and investment properties. Punta del Este attracts both tourists and investors due to its thriving tourism industry and strong rental market.
- Colonia del Sacramento - Known for its historic charm and colonial architecture, Colonia is a UNESCO World Heritage site and a popular destination for those seeking a quieter, more cultural investment. The Old Town and riverside areas offer unique real estate opportunities, including traditional houses and boutique hotels.
- Maldonado - Located near Punta del Este, Maldonado is growing in popularity for its more affordable real estate options compared to its glamorous neighbor. It offers a balance of residential, commercial, and investment properties, attracting both locals and international buyers seeking a quieter coastal lifestyle.
- La Paloma - A laid-back beach town on Uruguay’s Atlantic coast, La Paloma is popular among those looking for a relaxed atmosphere and natural beauty. It’s an emerging market for real estate investment, particularly in eco-friendly homes and beachside properties, appealing to those interested in sustainable living.
Where to find properties online:
- https://listado.mercadolibre.com.uy/inmuebles/
- https://www.infocasas.com.uy/
- https://www.gallito.com.uy/
Financing
While the Uruguayan banking system allows non-residents to apply for property loans, there are some challenges to consider. Not all banks offer mortgage options for foreign buyers, and the interest rates can be higher compared to other countries in the region. Additionally, foreign applicants may face stricter requirements, such as needing to provide a larger down payment, even up to 50% of the property's value.
Foreigners should also be prepared to provide extensive documentation, including proof of income, credit history, and residency status. Consulting with a local mortgage broker can help navigate the lending landscape, as they can identify banks that cater to international buyers and help secure favorable terms. Moreover, some financial institutions may require the borrower to open a local bank account and maintain it for the duration of the loan.
Due Diligence and Sales Contract
In Uruguay, while the due diligence process is not legally mandated, it is highly advisable, particularly for foreign buyers. This process typically includes verifying the legal status of the property, confirming that there are no outstanding debts or liens against it, checking the property's boundaries and dimensions, and ensuring that the seller possesses the legal authority to sell the property. Conducting thorough due diligence helps mitigate potential risks and ensures a smoother transaction for all parties involved.
In Uruguay, the property sales contract is known as the "Boleto de Reserva." This document details the terms and conditions of the property sale, including aspects such as the sale price, the legality of the property, and any other mutually agreed-upon conditions. Once signed, the Boleto de Reserva becomes a legally binding contract, committing both the buyer and the seller to the transaction. The process for non-resident buyers is the same as for residents.
Property Buying Costs and Taxes in Uruguay
Transaction Costs | ||
Who Pays? | ||
Transfer Fee | 2.00% | buyer |
Notary Fees | 3.00% | buyer/seller split |
Real Estate Agent Fee | 3.00% 3.00% |
buyer seller |
Costs paid by Buyer | 8.00% | |
Costs paid by Seller | 3.00% | |
ROUNDTRIP TRANSACTION COSTS | 11.00% | |
Source: Global Property Guide, PWC |
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.
Transfer Tax
Transfer tax is 2% of the property value.