Guide to Property Taxes in Uruguay

Nonresident individuals are generally subject to Uruguayan tax on Uruguay-source income, including income derived from real estate located in Uruguay.

Nonresidents carrying on business through a permanent establishment in Uruguay are generally subject to the business income-tax regime. Nonresidents without a permanent establishment are generally subject to the Non-Resident Income Tax (IRNR) on qualifying Uruguay-source income.

Rental Income Tax

Rental income earned by a nonresident individual from real estate located in Uruguay is subject to IRNR.

For an ordinary nonresident individual landlord, rental income is generally subject to tax at 12% on the applicable net taxable base. Under the simplified withholding/advance mechanism used for property rentals, tax is generally collected at 10.5% of gross rental income.

Where the property is rented through a withholding agent, such as a qualifying real-estate agency, the agent generally withholds the tax and pays it to the tax authorities. Where no withholding agent is involved, the nonresident landlord can be required to make the corresponding payments directly.

The nonresident landlord may generally elect to treat the applicable rental withholding payments as final, avoiding the need for an annual IRNR return in respect of that income where the relevant requirements are satisfied.

For standardized investment comparisons, 10.5% of gross rental income is therefore an appropriate general effective income-tax assumption for an ordinary nonresident individual landlord.

Different and potentially higher rates can apply to income obtained through entities resident, domiciled or located in jurisdictions classified under Uruguay's low- or no-taxation rules.

For an ordinary nonresident individual earning rental income from Uruguayan real estate, a practical simplified tax assumption is 10.5% of gross rental income. This corresponds to the IRNR withholding or monthly advance applicable to property rentals, which the taxpayer can generally elect to treat as final.

Annual gross rental income of $18,000, $72,000 and $144,000 therefore results in estimated annual rental taxes of $1,890, $7,560 and $15,120, respectively.

The effective tax burden is consequently 10.5% of gross rental income at all three levels, leaving approximately $16,110, $64,440 and $128,880 after rental income tax, respectively.

Capital Gains Tax

Capital gains earned by a nonresident individual from the disposal of Uruguayan real estate are generally subject to IRNR at 12% of the taxable gain.

For real estate acquired after 1 July 2007, the taxable gain is generally determined under the real-gain method. Broadly, this involves deducting the property's qualifying acquisition cost, adjusted in accordance with the applicable rules, together with qualifying acquisition and improvement costs, from the relevant disposal value.

Special rules apply to properties acquired before 1 July 2007, including circumstances in which a deemed-gain method may be available.

Accordingly, the 12% rate is imposed on the taxable capital gain, not generally on the property's entire selling price.

Corporate Taxation

Corporate Income Tax – IRAE

Companies carrying on taxable business activities in Uruguay are generally subject to Corporate Income Tax (IRAE) at 25% on net taxable income.

Taxable business income can include rental income and taxable gains from real estate.

Qualifying expenses incurred in generating taxable income are generally deductible, subject to Uruguay's tax rules and the applicable limitations and requirements.

Business Net Worth Tax

Companies can also be subject to Uruguay's Net Worth Tax on their taxable net assets.

The general rate applicable to business entities is 1.5% of taxable net worth, subject to the applicable valuation, exemption and liability-deduction rules.

The taxable base generally consists of taxable assets less qualifying deductible liabilities, rather than simply the company's gross property value.

Buying and Selling Costs/Taxes

Property Holding Tax

Owners of real estate in Uruguay are generally subject to an annual Property Tax (Contribución Inmobiliaria).

The tax is administered by the departmental governments, rather than being imposed at a single uniform national rate. The taxable base is generally determined by reference to the property's official cadastral value, with the applicable rates and calculation method depending on the department in which the property is located.

In Montevideo, for example, urban and suburban properties are subject to a progressive Contribución Inmobiliaria schedule based on cadastral value. As a result, the effective annual tax burden must be calculated using the applicable departmental rules rather than applying a uniform percentage to the property's market value.

Primary Education Tax

Uruguayan real estate can also be subject to the annual Primary Education Tax (Impuesto de Enseñanza Primaria).

For 2026, the tax is calculated on the applicable cadastral taxable value using progressive rates ranging from 0.15% to 0.30%.

This tax is separate from the Net Worth Tax and therefore represents an additional annual property-related charge.

Wealth Tax (Impuesto al Patrimonio)

Nonresident individuals owning assets located in Uruguay, including real estate, can be subject to the annual Wealth Tax (Impuesto al Patrimonio).

For the 2025 assessment, the individual tax-free threshold is UYU 6,653,000, while a qualifying family unit has a threshold of UYU 13,306,000.

Under the general regime, taxable net wealth exceeding the applicable threshold is subject to a 0.10% wealth-tax rate.

Special progressive rates apply to certain nonresident individuals who are not subject to Non-Resident Income Tax (IRNR). These rates range from 0.70% to 1.50%, depending on the amount of taxable net wealth.

The taxable base is determined according to Uruguay's specific valuation rules and permitted liabilities. Therefore, the tax should not simply be calculated by applying the rate to the property's current market value.

For a typical nonresident individual who owns and rents out Uruguayan real estate and is consequently subject to IRNR, the general 0.10% wealth-tax regime above the applicable tax-free threshold is the more relevant benchmark, subject to the taxpayer's particular circumstances.