Real Estate Tax in Paraguay
Real estate tax in Paraguay encompasses the annual property tax (Impuesto Inmobiliario), the tax on property transfers, and income tax on rental income or capital gains from property sales. These taxes are administered at both municipal and national levels.
How It Works in Paraguay
Paraguay levies an annual property tax (Impuesto Inmobiliario) of 1% on the fiscal value of the property, which is typically much lower than market value. The fiscal value is determined by the National Cadastral Service (SNC). An additional municipal surcharge of 0.3% may apply. When property changes hands, a transfer tax of approximately 1.5-3% of the transaction value applies. Rental income from Paraguayan property is subject to income tax under IRP or IRACIS. Foreigners can own property in Paraguay with the same rights as nationals, except within 50km of international borders.
Global Comparison
Paraguay's property tax burden is minimal compared to most countries. Annual property taxes in the US typically range from 0.5-2.5% of market value, not fiscal value. The UK charges council tax plus stamp duty of up to 12% on transfers. Paraguay's combination of low annual tax and reasonable transfer tax makes it attractive for real estate investment.
Frequently Asked Questions
Can foreigners buy property in Paraguay?
Yes. Foreigners have the same property rights as Paraguayan citizens in most of the country. The only restriction is that foreign nationals cannot own rural land within 50 kilometers of Paraguay's international borders (the security zone). Urban property within this zone is permitted. No special permits or residency are required to purchase property.
How is the fiscal value of property determined?
The fiscal value (valor fiscal) is set by the National Cadastral Service (Servicio Nacional de Catastro) and is typically 20-50% below actual market value. It is based on factors including location, size, construction type, and improvements. Property owners can request a reassessment, and the government periodically updates fiscal values, though they tend to lag significantly behind market prices.
Is rental income from Paraguayan property taxable?
Yes. Rental income from property located in Paraguay is considered Paraguayan-source income and is subject to income tax. Individuals pay IRP (8-10%) on the net rental income. Deductible expenses include maintenance, repairs, property management fees, and depreciation. The property tax itself is also deductible from rental income.
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Last reviewed: February 2026