Buying property in Uruguay

Moving to Uruguay? Lawyer Mark Teuten goes through legal requirements, taxes and most importantly the costs of buying a house or apartment in Uruguay.
By Mark Teuten
Last updated on March 15, 2018

Over the last ten years a growing number of Europeans and North Americans have been buying real estate in Uruguay. This is partly down global factors, increases in the value of farmland and the stability of Uruguay’s economy and laws. The latter is an open secret in South America with Uruguay regarded as a safe haven for Latin American investors particularly those from Argentina for decades.

Buying property in Uruguay Photo: Jimmy Baikovicius

Who can buy real estate in Uruguay?

Anyone. It makes no difference if the person–physical or legal–is Uruguayan or not, resident or not. All are treated the same.

Two minor restrictions exist in the case of rural properties. Firstly, rural properties must be bought in the name of a physical person (national or foreign, resident or not) or by a company with named partners or limited companies with named shareholders. Secondly, any rural property of over 500 hectares in size must first be offered to the Instituto Nacional de Colonización. The INC is a public body tasked with encouraging the growth of the rural population. It has the option of purchasing the land at the same price.

Buying property in Uruguay Photo: Jimmy Baikovicius

What are the legal requirements and fees involved?

There are no restrictions on who can purchase property–except for those affecting rural property—but you must use a public notary to prepare the legal documents. The notary will advise you on the nature of the transaction and ensure the title deeds are all in order. For example, that there are no outstanding debts on the property.

The standard fee for a notary is 3% plus VAT (plus taxes and expenses) if you are buying and 1% plus VAT if you are selling a property.

Property can be purchased directly or through a real estate agent known in Spanish as an inmobiliaria. The standard fee of a real estate agent is 3% plus VAT. VAT is currently twenty-two per cent.

You should calculate that between estate agents fees, all expenses and taxes, transaction costs on a purchase will be around 8% of the purchase price of your property in Uruguay.

How does the real estate purchase process work?

The process starts with the signing of a reservation contract – a boleto de reserva in Spanish. This is the formal acceptance of an offer to purchase and binds both parties to go ahead with the transaction. However unlike in other parts of the world the title investigation is only carried out after the signing of the contract. So if any defects in title are found then the contract can be rescinded without penalty.

A 10% deposit is normally paid on the signing of the contract and if one party defaults then it is usual to include a penalty clause equivalent to the deposit to be paid by the defaulting party. The deposit is held by the notary in an escrow account.

It is normal for the reservation contract to establish a period of between 30-60 days to proceed to closing.

Buying property in Uruguay Photo: Jimmy Baikovicius

Currency for transactions

Uruguay has a legal regime which provides for the free entry and exit of foreign currency and also permits it to be freely converted into the local currency.

All real estate transactions are carried out in US dollars. As will be seen below, for certain tax aspects the value is recalculated in Uruguayan pesos and taxes are paid in pesos, but the transaction itself will always be in US dollars.

Buying property in Uruguay Photo: Jimmy Baikovicius

What taxes are applicable on a transfer of property?

Find out

Mark Teuten is a British lawyer based in Montevideo since the 1990s. He has law degrees from both the UK and Uruguay. He can help you with your residency applications, setting up a registered company and other legal matters. Guru’Guay has recommended him to our readers who have praised his trustworthiness, clarity, prompt communication even over great distances and careful advice regarding courses of action.




24 Responses

  1. Ola! Gostaria de tirar uma duvida.
    É possivel financiar um imovel a longo prazo no uruguai? Digamos 20 anos, 30 anos como é no Brasil. E se sim, as taxas sao parecidas? Em torno de 1% ao mes? Muito grato

    1. Hola Samuel. Algunos bancos de plaza (Por ej HSBC) estan dando hipotecas por 20/30 años a tasas que entiendo son bastante competitivas aun a nivel internacional. Algo menos que 1% mensual.
      Igualmente habra que pagar una porcion importante del precio. Es decir no hay hipotecas de 100% del precio.

  2. Hallo Guru Guay,
    Ich muß das Land wieder verlassen und gehe zurück nach Österreich.
    Jetzt müsste ich meine Wohnung nach nur 19 Monaten wieder verkaufen. Was muß ich beachten, worauf sollte ich achten?
    Auch wegen der Steuern?
    Danke für die Antwort

    Gruß Gustav

    1. Hi Gustav,
      Sorry to hear you have to leave Uruguay. If you are selling property here I suggest you contact the notary who dealt with the purchase for you so they can advise you on the sale. There is a tax payable on any profit made on a sale. The notary can advise you whether you have to pay and if so how much (in general it is not a significant amount).

      1. Hi together,
        if i want to buy a property as a foreigner do i need an Uruguayan bank account to pay for it? and how can i get an uruguayan Bank account without cedula? or is there any other way for european to pay for the property?

        1. Hi Oxana, foreigners can open bank accounts in Uruguay, so you have no problem there. Best wishes, Karen

  3. Dear Sir,
    As to property prices of rural land you will need to check with a real estate agency.
    There are very few Indians living here permanently. There are a number working on short term contracts with Tata Consulting.
    Note that you will need a visa to get into the country as well.
    Good luck.

  4. Hello,
    I am from india, planning to buy agriculture land with a house in uruguay.
    I want to become a farmer in Latin America.
    Like to purchase around approximately <20 hectors, with investment of under 100,000USD.
    Could you please suggest if any available?
    Suggest me if any similar available in budget.
    Any indians settled in Uruguay?

  5. When calculating the costs on the $ purchase price are the annual charges determined on a local peso valuation ? How are property valuations conducted and how often?
    Is there a South African immigrant presence in UY?
    Thank you.

    1. Hi Ivan, greetings from Uruguay. By $ I assume you mean US dollars? Beware, because $ signifies Uruguayan pesos here. Property prices are always valued in US dollars here, to avoid fluctuations of currency. Valuations are carried out by private realtors. There’s no national standard.

      There’s a nascent South African immigrant presence. Let me invite you to come and join us in our Discover Uruguay Facebook group. We have quite a few South Africans there already. Looking forward to seeing you there – Karen

  6. CommenthHola Karen, muy linda e interesante la nota con relacion a las personas que piensan en invertir . Como escribe un colega hay varios puntos para aclarar uno el que describe el colega ,segundo cuando se trata de bienes rurales y habla de SOCIEDADES ANONIMAS las mismas debens ser nominativas y además debemos tener en cuenta LAVADO DE ACTIVOS, los escribanos, contadores,abogados e inmobiliarias estamos OBLIGADOS a efectuar el control de la PROCEDENCIA DE FONDOS.Cada parte DEBE tener su propio Escribano que lo asesore en todo momento y se recomienda que se recurra a notarios recomendados por otras personas o amigos .Con relacion a Honorarios ,gastos faltaria incluir todos los gastos previos para obtener informacion sobre el o los bienes.Saludos cordiales y ojalá muchos inviertan en nuestro pais

  7. Am I reading this right? To buy a house for say $100k I must pay 22% (or $22k) on it plus various other taxes and fees? Nothing like paying for your house twice!!

    1. Hi Virginia, no. The article says: “You should calculate that between estate agents fees, all expenses and taxes, transaction costs on a purchase will be around 8% of the purchase price of your property in Uruguay.” So 8%.

      Much better than 22%! All the best, Karen

      1. Hi and thanks for the nice article ! It seems Ms Long meant the VAT. It is really interesting to know the principle of VAT applicability for real estate transactions.

  8. I’m a UK citizen. I’m looking for a remote hovel to make into a bolt-hole. Can I live in it as I restore it. How easy is it to get residence permit? Can it all be arranged in Paraguay?

    1. Hi Tony, you’ll find the answers to your question about residency on this site, but yes, it is relatively easy and you can do it while you are in Uruguay. Though the first thing you’d need to do is tell the difference between Paraguay and Uruguay, if you are planning to live here!!! Oooopppssss!!!

  9. A very interesting article. Having had recent experience of the Argentine market I wonder if you could clarify the point about money entering the country for property purchase in Uruguay. Are you saying that the buyer can pay cash at all stages of the transaction, or is a bank involved somewhere?

    1. Cash used to be ok until a few years ago, but no longer. Now purchase funds must be paid out from a Uruguayan bank account.

  10. Congratulations! I really enjoy very much your blog and I have to say I feel thankful as an uruguayan person to have this kind of blog that is not only enjoyable but also very interesting and useful for foreign people.
    This article has very complete information but as I´m a Notary I should mark one points that it´s not strictley accurate. This is about Notary fees : the seller does not have to pay notary fee, not even 1%. The notary public acts for both parts but only the buyer pays the 3% fee. And in some cases (a contract named “Promesa de Compraventa” which is basically a contract to buy a property but paying it in installments) the fee that the buyer pays is 1.5%.
    Again: thank you very much for your contribution to the information about Uruguay. I would like to make a toast with cerveza Patricia in your honor!

    1. Thank you for your kind words, Cristina. I am always delighted when Uruguayans love Guru’Guay! The idea of the article is to keep this information as straight forward for a general reader as possible. But every grano de arena helps!! Cheers!! Karen

    2. Cristina, Thank you for reading my aticle and your comments. You are of course right that a seller is not obliged to have their own notary and under Uruguayan law the notary can act for both parties. However I personally do not think this is correct and a professional should not act for both sides. So I always tell sellers to get independent legal advice. In that case the standard fee charged by a notary is 1%. I think it is money well spent, since in most cases it involves a person selling their principal asset, or at least one of them.. As to “Promesas” you are right that the fee is 1.5%, but this still leaves the definitive “escritura” for later and then the fee is 3%, making 4.5% in total. Also I tried to keep the article simple and so was not covering all possible variations. Thanks again for your comments. Mark

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