Peru – Property Taxes

What taxes and fees apply when buying a property in Peru?

The most substantial cost a purchaser faces when acquiring real estate in Peru is the Impuesto de Alcabala — the property transfer tax. This charge falls exclusively on the buyer rather than the seller, making it a key financial consideration for anyone looking to purchase. The 2025 Alcabala rate stands at 3% of the property value in excess of the exempt threshold of 10 UIT (S/53,500). Conceptually, it resembles stamp duty land tax in the United Kingdom or land transfer tax in Canada — a one-off charge levied on the purchaser at the moment of acquisition.

The taxable base uses whichever is higher — the agreed sale price or the municipal autovalúo value — in order to prevent tax avoidance through understated transaction prices. Alcabala is not triggered by inheritance transfers or by first-time sales made directly by developers; the latter attract IGV/VAT instead. The tax likewise does not apply when the property’s commercial value falls below 10 UIT (S/53,500 for 2025), or in the case of initial sales within horizontal property (condominium) or multi-family developments.

In addition to Alcabala, purchasers must set aside funds for notary and registration costs. Notary fees (Honorarios Notariales) typically run from 0.5% to 1% of the property value, while registry fees at SUNARP (Tasas por Registro en SUNARP) come to approximately 0.3%. Further charges may include the Impuesto General a las Ventas (IGV/VAT) at 18% on first sales from developers, and the Impuesto a las Transacciones Financieras (ITF) at 0.005% on banking operations connected to property transactions.

All-in closing costs when buying property in Peru generally fall within a range of 4% to 7% of the purchase price, with the majority of transactions settling around 5% to 6%. Engaging an independent solicitor or lawyer is not legally compulsory but is strongly advisable; their fees introduce an additional variable cost. Always verify current figures directly with SAT Lima or your local municipal revenue office, and with SUNARP for registration costs.

Once the purchase is concluded, the new owner must attend the corresponding municipality and declare the transfer in order to update both the property tax (Impuesto Predial) and municipal service fees (Arbitrios) in their name. This procedure is referred to as “Alta Municipal” and requires a copy of the public deed, the SUNARP registration certificate, a copy of the buyer’s identification document, and a certificate of no outstanding debts provided by the seller.

Worked example: buying a property at S/400,000

These are estimates as of 2025. Always confirm current rates with your notary, SUNARP, and your local municipal authority before exchange of contracts.

What taxes and fees apply when selling a property in Peru?

Compared to buyers, sellers in a Peruvian property transaction generally carry a lighter tax burden. The principal fiscal obligation on the seller’s side is capital gains tax (addressed in the following section). Nevertheless, there are several practical and administrative costs that sellers should account for.

Before a notary will proceed with the deed of transfer, the seller is typically required to produce a “certificate of no municipal debts” obtained from the municipality in which the property is situated. This document confirms that property taxes (predial) and municipal service charges (arbitrios) have been fully settled.

When a sale completes, the seller must also carry out the process known as “Baja Municipal,” formally notifying the municipality so that tax obligations pass to the new owner, and ensuring the seller’s liability ceases on 31 December of the year in which the transaction took place.

Estate agent (corredor) commissions in Peru are not regulated by law and are negotiated between the parties; in practice they tend to range from 3% to 5% of the sale price. Legal and notarial costs associated with the transaction are generally shared between buyer and seller, though the precise allocation is subject to negotiation. Sellers should also be aware that a 5% withholding may be deducted from the transaction proceeds as a prepayment against their capital gains tax liability, which is subsequently credited when the final tax calculation is made. Always verify prevailing agent commission levels and legal fee structures with a locally registered property professional or lawyer.

Is capital gains tax payable on property sales in Peru?

Yes — Peru does tax gains arising from the disposal of real estate, but at a notably competitive flat rate. Both resident and non-resident individuals are subject to an effective income tax rate of 5% on capital gains from property sales. This rate is considerably lower than equivalent charges in many other countries — CGT on residential property in the United Kingdom can reach 24%, while France applies a standard rate of 19% for non-residents (plus social charges).

The 5% rate applies to net gains and makes no distinction based on the seller’s residency status. Net gain is calculated as the sale price minus the adjusted acquisition cost, which encompasses the original purchase price, documented capital improvements, transaction expenses, and inflation adjustments for assets held over several years.

A primary residence exemption is available where the property has served as the seller’s sole home and the relevant conditions concerning value and use are satisfied. This exemption can eliminate the capital gains liability for qualifying homeowners, though it comes with strict documentation and eligibility requirements, including minimum residency duration and property value thresholds. Always verify current exemption criteria with SUNAT (Peru’s national tax authority) or a locally qualified tax adviser.

For non-residents, there is a significant administrative prerequisite: prior to receiving the sale proceeds, non-residents must obtain certification of their cost basis from SUNAT. This step ensures that the taxable gain is correctly established and the appropriate withholding applied. Where a property was acquired gratuitously — through donation or inheritance, for instance — the cost basis is ordinarily treated as zero, unless the transferor’s original documented cost can be reliably substantiated.

Practical example

If you acquired a property for S/300,000 and subsequently sell it for S/500,000, the net gain is S/200,000. The resulting capital gains tax would be: S/200,000 × 5% = S/10,000. Should the property qualify as your principal residence and all relevant conditions be met, this liability may be extinguished — confirm eligibility with SUNAT before finalising the sale.

Are there annual property taxes in Peru?

Yes. Every property owner in Peru is subject to the Impuesto Predial, an annual municipal property tax administered by local municipalities. All real estate in the country is covered by this obligation, which is calculated on the basis of the property’s assessed value. The concept resembles council tax in the United Kingdom or rates in Australia and New Zealand, though Peru’s system ties the charge to assessed property values rather than fixed categorical bands.

Peru’s Impuesto Predial operates through a progressive three-tier structure founded on self-assessed values known as “autovalúo,” which municipalities publish each year. Properties valued up to 15 UIT (S/80,250 in 2025) attract a rate of 0.2% annually; properties in the range of 15 to 60 UIT (S/80,250 to S/321,000) are charged 0.6% on the excess; and properties exceeding 60 UIT (above S/321,000) incur a rate of 1.0% on amounts beyond the S/321,000 threshold.

Municipalities establish property values through their autovalúo system, which is generally based on assessed or cadastral values rather than current open-market prices. These autovalúo valuations typically run 20%–40% below actual market values, providing a degree of inherent tax relief for property owners.

The Impuesto Predial is owed by whoever appears in municipal records as the property owner on 1 January of each year. Residency status, nationality, or whether the owner is an individual or a company has no bearing on the obligation — all owners pay at the same rates.

Alongside the Impuesto Predial, property owners are also required to pay Arbitrios Municipales — charges for municipal services. These cover three mandatory areas: street cleaning and waste collection (Limpieza Pública), maintenance of parks and green spaces (Parques y Jardines), and neighbourhood security services (Serenazgo). Arbitrios are assessed annually but settled in quarterly instalments.

What does a typical owner pay?

For a S/200,000 property, the Impuesto Predial works out as follows: S/80,250 × 0.2% + (S/200,000 − S/80,250) × 0.6% = S/161 + S/718 = S/879 in total, representing an effective rate of 0.44%. A S/500,000 property pays: S/80,250 × 0.2% + S/240,750 × 0.6% + (S/500,000 − S/321,000) × 1.0% = S/161 + S/1,445 + S/1,790 = S/3,396 in total, with an effective rate of 0.68%. When Arbitrios are included, total annual ownership costs for properties valued between S/200,000 and S/1,000,000 fall in the approximate range of S/3,000 to S/11,000. These figures reflect 2025 values — always verify current assessed values and applicable rates with your local municipal authority or SAT Lima.

The 2025 Impuesto Predial deadline for payment in full is 28 February 2025. Owners may alternatively pay in quarterly instalments, due on the last business days of February, May, August, and November. Overdue amounts attract monthly interest of 0.9%, calculated from the original due date.

How is rental income from property taxed in Peru?

Rental income in Peru falls under the Impuesto a la Renta de Primera Categoría (First Category Income Tax). The applicable rate — and the rules governing it — differ materially depending on whether the landlord qualifies as a Peruvian tax resident or is considered a non-resident, so establishing your status before letting a property is essential.

Peruvian tax residents pay 5% on net rental income after allowable deductions, while non-residents are subject to a flat 30% withholding tax levied on gross rental income with no deductions permitted. The 5% resident rate compares very favourably with many other markets — rental income is taxed as ordinary income in Germany (up to 45%) and at 20% for basic-rate taxpayers in the United Kingdom. A minimum deemed rent rule also applies: annual rental income from a leased property may not be declared at less than 6% of the property’s municipal cadastral value, a safeguard designed to deter under-reporting of rents.

Where a property is rented by a non-resident landlord, the tenant bears a legal obligation to withhold the appropriate tax and remit it to SUNAT on the landlord’s behalf. Landlords living abroad should therefore confirm that their tenants are registered for this obligation and are meeting it. Non-compliance by the tenant does not extinguish the underlying tax liability.

Regarding VAT: the leasing of property in Peru is generally subject to VAT at 18%; however, where a lease is not effectively connected with a trade or business, the transaction falls outside the scope of this tax. In practice, most individual landlords letting residential accommodation are not conducting a commercial enterprise and VAT does not arise. That said, landlords operating short-term rentals at scale — for example through platforms such as Airbnb as a business activity — should obtain specific advice from a Peruvian tax professional, since commercial classifications may attract VAT and additional reporting obligations. Always verify current thresholds and registration requirements with SUNAT.

Tax residency in Peru is determined by physical presence: anyone who spends more than 183 days in the country within any 12-month period is treated as a resident. Expats who divide their time between Peru and another country should monitor their day count carefully, as crossing this threshold determines whether the favourable 5% resident rate or the substantially higher 30% non-resident rate applies to their rental receipts.

Does inheritance tax apply to property in Peru?

Peru does not impose a standalone inheritance tax. Real estate passing on death is not subject to any specific death duty or estate tax, which simplifies succession planning considerably compared to many other jurisdictions — France, for instance, charges rates of up to 45% for non-relatives, while Spain applies succession tax at the regional level.

Alcabala does not apply to transfers by inheritance, meaning heirs avoid the 3% property transfer tax solely by virtue of receiving property through an estate. However, there is an important capital gains consideration: where property is acquired gratuitously — including through inheritance — the cost basis is ordinarily treated as zero, unless the transferor’s original documented cost can be substantiated. This matters because when the heir eventually disposes of the inherited property, the capital gain calculation begins from a very low base, potentially generating a considerably larger taxable gain than would arise from a commercially purchased asset.

For cross-border estate planning, it is worth noting that Peru has concluded double taxation treaties (DTTs) with a number of countries, including Canada, Chile, Brazil, Mexico, Korea, Switzerland, Portugal, and Japan, and participates in the Andean Community’s Decision 578/2004 alongside Colombia, Ecuador, and Bolivia. These agreements allocate taxing rights between signatory states and provide mechanisms for avoiding double taxation. The interaction between Peruvian inheritance law and the tax rules of your home country can, however, be complex — specialist cross-border tax advice is essential if your estate spans multiple jurisdictions.

Trusts under Peruvian law (fideicomisos) can be deployed for succession planning, and the transfer of assets into such a structure may be achievable without triggering an income tax liability, provided certain conditions are satisfied. This is a highly specialised area where professional legal and tax guidance is indispensable.

Does gift tax apply to property transfers in Peru?

Peru does not impose a specific gift tax. Gifts of property, as well as advancements of inheritance (anticipos de legítima), are not subject to income tax when transferred to individuals. This means such arrangements can be used to pass real estate wealth to the next generation without triggering an income tax charge at the point of transfer.

However, Alcabala — the transfer tax — may still be relevant in the context of lifetime property gifts. Although these transfers are exempt from income tax, they may remain subject to Alcabala if they involve real estate. The key distinction is between a straightforward outright gift, which may attract Alcabala, and a formal advance on a legal inheritance share (anticipio de legítima), which is exempted from Alcabala. The nature of the transfer is therefore determinative, and you should clarify the position with a Peruvian notary or property lawyer before proceeding.

The same cost-basis issue described in relation to inherited property applies equally here: if the recipient subsequently sells a gifted property, the base cost for CGT purposes may be zero unless the original owner’s documented acquisition cost can be established. This can give rise to a meaningful CGT liability on eventual sale, even though no tax arose at the time of the gift itself.

Are there any tax advantages or incentives for buying property in Peru?

Peru’s property tax framework does not feature an extensive menu of targeted relief programmes in the manner of some other countries — there is, for example, no equivalent to the United Kingdom’s Help to Buy scheme or Australia’s first home buyer grants. Nevertheless, a number of structural characteristics make property ownership in Peru broadly tax-efficient.

The low flat rates for both rental income (5% for residents) and capital gains (5%) compare very well with most other markets globally. The primary residence exemption is a particularly attractive feature for those relocating to Peru on a permanent basis, as it can eliminate capital gains tax entirely when the home is eventually sold — provided the relevant qualifying conditions set by SUNAT are met.

For corporate and institutional investors, Peru offers two dedicated tax-efficient real estate investment vehicles. FIRBI (Real Estate Income Investment Fund) and FIBRA (Real Estate Income Securitization Trust) are both structured to generate regular rental income and offer the prospect of capital appreciation. Depending on how they are established, these structures may offer tax deferrals or reduced rates. This is a specialist area in which professional advice is essential.

Impuesto Predial (annual property tax) is deductible for business income tax purposes, which is pertinent for real estate held through a company or deployed in a commercial context. Investors using a corporate structure to hold Peruvian property should incorporate this deductibility into their overall tax planning.

For larger-scale investors, Peru also operates an Early VAT Recovery scheme and additional investment incentive frameworks — though these are generally accessible only to qualifying projects above significant minimum investment thresholds and are not typically relevant to individual residential purchasers. For current programmes, consult Peru’s investment promotion agency, ProInversión, and the Ministry of Economy and Finance (MEF).

Do different rules apply to foreign buyers or non-residents purchasing property in Peru?

Peru takes a notably open approach to foreign property ownership. Peruvian law permits foreign nationals to buy real estate in the country, even while present as tourists. Neither residency nor an immigration card (Carné de Extranjería) is required, except for properties situated in border areas, where special state authorisation is necessary.

There is no minimum investment amount imposed on foreign buyers acquiring residential property in Peru. Transfer taxes and fees apply equally to domestic and overseas purchasers, meaning there is no additional surcharge directed at foreigners. Alcabala is paid exclusively by the buyer at the point of purchase, and whether that buyer is a Peruvian citizen, a foreign resident, a non-resident, or a company has no bearing on the 3% rate or the method of calculation.

One important geographic restriction is worth emphasising: Article 71 of the Peruvian Constitution expressly prohibits “indirect” foreign ownership of properties lying within 50 kilometres of a national border. Attempting to circumvent this by registering a purchase in a Peruvian spouse’s name carries real legal risk. Properties in Lima and other major urban centres are entirely unaffected by this restriction.

Foreign buyers travelling on a tourist visa face an additional administrative requirement: they typically need a special “permiso especial para firmar documentos” from Migraciones before they can sign the purchase deed before a notary. This permit should be factored into your planning timeline and transaction budget.

The most significant differences for non-residents relate not to the act of purchasing but to ongoing ownership and eventual disposal. Non-residents face a flat 30% withholding tax on gross rental income with no deductions permitted — compared to 5% for residents. Capital gains tax is levied at 5% on both residents and non-residents, but non-residents must pre-certify their cost basis with SUNAT before receiving sale proceeds. Property registration with SUNARP is what establishes legal ownership in Peru — contract signature alone is insufficient — so this step must never be omitted, and full payment should not be made prior to registration. For compliance queries, contact SUNAT directly or engage a locally qualified tax adviser.

Step-by-step: how to buy property in Peru as a foreign buyer

1. Obtain a tax identification number (RUC): Foreign buyers need to register with SUNAT to obtain a RUC number, which is required for any property transaction in Peru.
2. Verify the property at SUNARP: SUNARP, Peru’s national property registry, is the only reliable way to verify ownership and check for liens — never rely on documents shown by the seller alone. Request a Certificado Registral Inmobiliario (CRI).
3. Check for border restrictions: Confirm the property is not within the 50-kilometre border exclusion zone, which restricts foreign ownership.
4. Obtain a signing permit if on a tourist visa: If you are not a Peruvian resident, apply for the “permiso especial para firmar documentos” from Migraciones before the notarial signing date.
5. Sign the public deed (escritura pública) before a notary: The key document you will sign is the public deed (escritura pública) executed before a notary, which is then submitted to SUNARP for registration.
6. Pay Alcabala and other transaction taxes: The Alcabala tax must be paid before completing the property transfer and registration process. Present the payment receipt to the notary.
7. Register the purchase with SUNARP: The notary submits the parte notarial (official deed copy) to SUNARP. A clean, already-registered property purchase in Peru typically takes 2 to 6 weeks from initial due diligence to final registration.
8. Complete Alta Municipal with your local municipality: Notify the municipality of the ownership change to begin paying Impuesto Predial in your name from 1 January of the following year.

Frequently asked questions about property taxes in Peru

Does Peru have a wealth tax that applies to property?

Peru does not levy a personal wealth tax on residential real estate. The annual Impuesto Predial is a municipal charge on the property itself rather than a surcharge on the owner’s overall net worth. A Temporary Net Assets Tax (TNAT) does exist for companies whose assets exceed PEN 1 million, but this has no bearing on individual homeowners. Verify the current position with SUNAT or a local tax adviser.

Do I need a Peruvian tax number to buy property?

Yes. Foreign purchasers must register with Peru’s national tax authority, SUNAT, to obtain a RUC (Registro Único de Contribuyentes) number before they can complete a property acquisition. The RUC is also required for paying Alcabala and for filing any subsequent tax returns relating to rental income or capital gains. Visit sunat.gob.pe for current registration procedures.

Is there any capital gains relief for long-term property ownership in Peru?

Inflation adjustments for assets held over multiple years are incorporated into the net gain calculation, which reduces the taxable amount in real terms. Peru does not, however, offer a length-of-ownership taper relief of the kind found in some other countries, such as France’s abattement system for long-term holdings. The main relief available is the principal residence exemption. Confirm the current rules with SUNAT or a Peruvian tax professional, as the detail of exemption conditions can change.

How do I pay Impuesto Predial, and what happens if I miss the deadline?

The Impuesto Predial deadline for full annual payment is 28 February, with quarterly instalment payments due on the last business days of February, May, August, and November. Overdue amounts accumulate monthly interest at 0.9% calculated from the original due date, compounding monthly. For properties in Lima, payments can be made through SAT Lima at sat.gob.pe; other municipalities maintain their own payment channels.

Is Airbnb rental income taxed differently from long-term rental income in Peru?

The Impuesto a la Renta de Primera Categoría applies to rental income in general, whether the letting is long-term or short-term. If a short-term rental operation is determined to constitute a trade or business, however, VAT at 18% may also be applicable — whereas conventional residential lettings fall outside the scope of VAT. The classification turns on the scale and character of the activity. Owners running a substantial short-term rental portfolio should seek advice from a Peruvian tax professional to establish their correct VAT and income tax position.

Can I inherit or be gifted property in Peru without paying tax?

Yes, in most circumstances. Peru levies neither inheritance tax nor gift tax. Property transferred to heirs on death generates no death duty, and outright gifts of real estate are exempt from income tax. Note, however, that Alcabala may apply to certain gift transfers (though not to formal anticipos de legítima). The principal risk to be aware of is that inherited or gifted property typically carries a zero cost base, which can create a considerably larger capital gains liability when the property is eventually sold. Always take legal advice from a Peruvian notary or lawyer before structuring any property transfer.

Does buying property in Peru qualify me for a visa or residency?

Purchasing property in Peru does not automatically confer residency or citizenship, since the investor visa route requires active business investment rather than mere ownership of real estate. Separate visa and immigration applications are necessary. For current residency pathways and requirements, consult Peru’s immigration authority, Migraciones.

Where can I get official guidance on property taxes in Peru?

The principal official sources are: SUNAT (Superintendencia Nacional de Aduanas y de Administración Tributaria) for income tax, capital gains, and rental income rules; SAT Lima for Impuesto Predial and Alcabala in Lima; SUNARP for property registration; and the Ministry of Economy and Finance (MEF) for annual tax unit (UIT) updates. For properties outside Lima, contact the relevant district municipality directly. Tax rates and thresholds are revised annually, so always check for the most up-to-date figures.