Investment advantages

Buying a property in Uruguay

Who can purchase property in Uruguay ?

No restrictions or impediments for foreign buyers :
– Anyone can purchase property in Uruguay
– Equal treatments for resident and non-resident buyers, who can invest freely with secure land registry titles, regardless of nationality
– No limitations to ownership of property by foreigners

How can property be purchased in Uruguay?

Flexible system :
– Individual(s)
– Local Company: Uruguayan Limited Company (Sociedad Anonima)
– Foreign Company: Delaware LLC, Panama Corp. (Sociedad Panameña), BVI etc

What types of properties can be purchased in Uruguay ?

No restrictions on all types of properties :
– Beachfront properties: houses, chalets and apartments
– Rural properties: small farms, vineyards, orchards, and ranches (‘Chacras’), land and forestry
– Urban properties: luxury apartments, houses

Investment Advantages

Freely exchangeable currency :
– No currency exchange controls
– Easy to open a bank account and no additional requirements for foreigners
– Accounts can be opened in international currencies (Euros, Dollars)
– No restrictions or taxes when transferring money into or out of the country
– Strict banking secrecy regulations

Solid legal system :
– Highly reputable for its respect of contracts and private property laws
– Impartial, independent and reputable Judiciary
– Residents and non-residents are treated equally
– Constitutional rights are enforced
– Strict tax secrecy laws

Benign and transparent tax system :
– Low property taxes
– Moderate taxes for local business start-up
– Taxes are non-onerous for both residents and non-residents
– No inheritance tax
– Only certain types of foreign income are taxed (12%) for residents
– Strong system in place to ensure you are not double-taxed if you have already paid income taxes elsewhere for residents

How is the property purchase structured ?

Buyer selects a property and agrees on the price with IRIS Realty, Punta del Este. Buyer selects Notary Public (IRIS Realty can recommend a Notary Public).

Notary Public drafts Pre-exchange Contract (‘Boleto de Reserva’), which :
– Secures purchase to both the committed seller and buyer
– Sets penalty to either party breaching commitment
– Sets down-payment made concurrently to signing of ‘Boletto de Reserva’
stays in escrow with the appointed Notary
– Allows 30-60days for the property to be verified for good-standing
– Sets the deadline for the full-payment and property transfer

Purchase document (‘Escritura de Compraventa’) is signed, price is paid in full or partially in installments with a ‘Compromiso’ document, and property is subsequently transferred to the buyer.

Role of Notary Public

– Looking after the buyer’s interest in the purchase process
– Down-payment stays in escrow with Notary
– Ensuring that the property has a clean title by analyzing the ownership history
– Drafts the reservation and purchase documents
– Records the individual ‘Padron’ number of purchase at the Public Registry

Note: Power of attorney can be granted to complete the purchase process.

Transaction costs for the Buyer

The base buyer transaction costs are approximately 8% to 9% of the purchase price :
– The real estate fee: 3% of the purchase price plus VAT*
– The Notary Public’s fee: 3% of the purchase price plus VAT*.
– Property Transfer Tax (ITP): 2% of the cadastral value of the property, usually lower than market price, adjusted for inflation.

Note: There may be additional costs, such as granting a power of attorney, registry and tax certificates stamp duties, legal and accounting advice, or a property inspection by an architect.

Transaction costs for the Seller

The base seller costs are therefore approximately 4.5% to 5.5% of the sale price:
– The real estate fee: 3% of the sale price and plus VAT*.
– Property Transfer Tax (ITP): 2% of the cadastral value of the property, usually lower than market price, adjusted for inflation.

* VAT is charged at 22%.