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RESIDENTIAL REAL ESTATE - RENTALS & SALES 

 

 

VALUE FOR MONEY

 

Uruguay has no restrictions on foreign ownership of any types or real estate, and there are all types in all price ranges, from apartments to houses to farm land to commercial properties. 

 

Generally speaking, renting or buying real estate is one aspect of the cost of living that is lower in Uruguay than in more developed countries.  As noted in the COST OF LIVING section, there are two main reasons for this:  1) Uruguay is slightly larger than Portugal, but with only around 3.5 million people, so land is affordable.  2)  Labor costs in the construction industry are low.

 

THE BEST TIME TO SHOP

 

Whether you are planning to rent or buy, the worst time to look at real estate in Uruguay is during “the season,” from mid-December through about the end of February when the coastal areas in particular are packed with tourists.  Far fewer properties are vacant for easier viewing during the season, many realtors are exclusively in vacation rental management mode during this period, and many other realtors are on vacation themselves. 

 

Additionally, everything is more expensive during the season, including hotels, rental cars and restaurants, which would drive up the cost of any real estate shopping expeditions during this period.

 

The best time to look at real estate is right after the tourist season starts to fade in early March, and the industry is at the front end of nine months or so of relative quiet.  On top of the less busy market, the southern autumn weather is generally nice and travel costs are lower.

 

The mid-year southern winter period is also good for real estate shopping, with a quiet market and the lowest travel costs, but the weather is colder.  The southern springtime is also okay, but the closer you get to the Christmas and New Year’s season, the more that owner thinking is influenced by the approaching peak season when they can extract exorbitant rents from the crush of incoming tourists.

 

 

ON-LINE RESEARCH

 

The best place to start when looking at real estate listings on the internet is the InfoCasas website , which your browser can translate into English.  It lists all types of property for sale or rent in all areas of Uruguay.  You can filter by sale or rental, property type, towns, neighborhoods, and features such as size, price range, number of bedrooms, etc.

 

As you view properties on InfoCasas you will also see which realtors are active in the areas you are interested in, and you can go to their websites as well.

 

In general, real estate ads in Uruguay are not as informative as one would wish, and are often misleading.  Old listings never seem to go away, so advertised properties are frequently not on the market.  Ad photos can be very basic and the information can be very limited.  When you see a low price and look closer, it often says “+ Gastos Comunes” (Common Expenses) that can themselves be hundreds of dollars per month.  Most listings include the Gastos Comunes in the total monthly rental price that is shown, but not all.  Or on closer inspection a low monthly price may also be for the off season only, generally around March through November. 

 

In resort areas, rental listings often show prices for the Christmas-New Year’s week, and for the half and full months of January and February, as well as annual (full year) and winter only prices.

RENTING RESIDENTIAL PROPERTY

Uruguay has both short and long term rentals, ranging from one-night Airbnb type accommodations, to leases of 1-2 years or longer.  In resort areas, where there are short term peak rental periods between mid-December and into March, prices can be several multiples of the off-season or “winter” period rents.

If you are bringing household goods with you, be aware that in the resort towns almost everything is rented fully furnished, including linens and dishes.  You will have very limited selection of unfurnished places, which usually require the owner’s agreement to remove furniture – at a price.  You also have the alternative of storing your personal household goods, if for example, you are renting while looking for a place to buy.  There are self-storage facilities in Montevideo and Maldonado, but they are fairly limited and often at full capacity during the peak tourist season, especially in Maldonado / Punta del Este.

For the most part, a rental lease in Uruguay is similar to what you would find anywhere else.  They specify the parties involved, the time period, the monthly rental amount, what utilities if any are included in the rent, etc. 

Typically an Uruguay rental agreement will require a security deposit and / or an insurance policy, to protect the landlord from defaults or damage done to the property.  Deposits can be one or two months to as much as six months, and most often are paid directly to the landlord.  Many rental agreements require insurance policies, which generally means much lower deposit amounts, such as one month of rent paid as a "warranty" or "guarantee" to offset damages, with the insurance being more for rent defaults.

Rental insurance policies can be difficult for foreigners to obtain, with some agents completely unable to secure them for expat clients.  With adequate proof of income and a good agent, however, it is possible for expats to obtain rental insurance coverage.

For those who are unable to obtain insurance or make large deposits, or just wish to avoid both, there is an option of looking for properties offered by landlords who are willing to rent with a “Contrato de Arrendamiento de la Ley de Urgente Consideración” (Law of Urgent Consideration) or “LUC” agreement for short.    Any landlord can offer a property with an LUC lease, where they give up the protection of a large deposit or insurance policy.  Their incentive to do so is that they can possibly rent their property quicker (and perhaps at a higher monthly price).  With an LUC rental agreement it is also easier for a landlord to evict a tenant who is behind on rent payments.  Real estate agents can search for properties that are available for rent under the LUC statute.  Generally, though, most realtors prefer to stay away from LUC agreements because they can be more problematic.

Utility payments are generally the responsibility of the tenant, particularly electricity, WiFi and cable, with water and sewage generally included in the Gastos Comunes (common expenses) for apartment rentals.

Landlords usually pay the Gastos Comunes, although they are often listed as a separate item from rent in the total amount of the monthly lease payments.  And sometimes in listings they are shown in the fine print as to what the total monthly lease price is.

Under Uruguayan law, a tenant who has been paying their rent on time has the right to extend their lease for an additional year.  To preempt that, landlords will often include a sharp price increase in the lease agreement for an additional year.  As the end of a lease approaches, the monthly cost of a renewal can be negotiated.

 

BUYING RESIDENTIAL PROPERTY


In Uruguay, buying residential property involves several steps overseen by an "escribano" (or ecribana), a conveyance attorney who provides services that notaries and title companies provide in the USA.  Here's a summary of the process along with the names of the documents prepared by the escribano and their purposes:

 

  1. Oferta de Compra (Offer to Purchase):  Initially, negotiations are done verbally, directly between the buyer and seller or via their real estate agent(s).  This is the initial written agreement between the buyer and the seller outlining the terms and conditions of the property sale, including the price, payment method, and any conditions or contingencies. 

  2. Boleto de Reserva (Promise of Sale): Sometimes the Offer to Purchase is skipped and this the first written document in the process.  It formalizes the buyer's commitment to purchase the property and may require a deposit or earnest money (10% is typical, and best paid to the escribano for holding). It generally includes details such as the agreed purchase price, real estate commissions, a deadline for completing the sale, etc.  If the buyer does not speak Spanish, the Promise of Sale is read in English by a translator, or an English language translation is provided.  Both the Oferta de Compra and the Boleto de Reserva can legally be prepared by a realtor, without the involvement of an escribano.  They sometimes are, in instances for example where an offer must be prepared with some urgency.  Overall, though, it is wise to have an escribano prepare these documents whenever possible.

  3. Informe de Títulos (Title Search): The escribano conducts a thorough investigation of the property's title history going back 30 years to ensure there are no legal issues or encumbrances that could affect the sale. This helps verify the seller's ownership rights and ensures the property can be legally transferred to the buyer.

  4. Contrato de Compra Venta (Purchase Agreement): This is the final contract between the buyer and the seller, detailing all aspects of the property sale, including the agreed-upon price, payment terms, closing date, and any additional conditions or agreements.

  5. Escritura de Compra Venta (Deed of Sale):  This is the official legal document that transfers ownership of the property from the seller to the buyer, and the point in time when payment for the property takes place, and also when the escribano and the buyer’s real estate agent are paid.  The Deed of Sale is signed before the escribano who then provides a certified copy to the Real Estate Registro de la Propiedad Inmueble (Property Registry) to formalize the transaction.  The escribano holds the original Deed of Sale and a photocopy, or if necessary a certified copy, is provided to the buyer.  If there are no issues with liens on the property, etc., the closing is usually finalized within about four to six weeks from the Boleto de Reserva, and it takes about another three weeks for the Deed of Sale to be recorded.

  6. Declaración de Impuesto de Transmisión Patrimonial (Property Transfer Tax Declaration): This document declares the sale of the property to the tax authorities and ensures that any applicable transfer taxes are paid in accordance with Uruguayan law.  If the seller has made a capital gain, they will pay taxes of 12% on the gain (calculated and paid in pesos), after inflation has been factored in.  Because of the capital gains tax, if a property is sold furnished, as they generally are in resort towns, the seller will often want to overstate the value of the furniture in the transaction, to minimize the capital gains tax.  This is negotiable and if the buyer agrees to a higher value for any furnishings, it will mean that if they eventually sell the property, their own capital gains will be calculated on a lower purchase price.

  7. Certificado Municipal (Municipal Certificate): This certificate confirms that the property is in compliance with local zoning regulations and that all municipal taxes and fees are up to date.

  8. Certificado de No Adeudos (Certificate of No Debts):  This document verifies that the property is free of any outstanding debts or liabilities, ensuring that the buyer assumes ownership without inheriting any financial burdens from the seller.

  9. Compromiso (Compromise - an agreement extension):  If for some reason the Deed of Sale cannot be finalized by the agreed closing date, the escribano can prepare Compromiso , which is a stop-gap document that would typically acknowledge the delay due to unforeseen circumstances, provide a revised closing date and define the continued obligations of the buyer and seller during the period of the extension.

 

When the sale if finally completed, the buyer will receive files that include the entire history of the property including any relevant blueprints.  They buyer can retain these files or leave them with the escribano for safe keeping.

Overall, the escribano plays a crucial role in overseeing the legal aspects of the property transaction, ensuring that all necessary documents are prepared correctly and that the buyer's interests are protected throughout the process.

If you are not able to be in Uruguay during the purchase of a property, you can have a Poder de Representación (a limited power of attorney) prepared by an escribano, giving an attorney or other trusted individual the authority to act on your behalf in the purchasing process.  The Poder de Representación can include a fixed expiration date so that an additional document to cancel it later is not needed, and fees to prepare a cancelation document are avoided.

PURCHASE & SALE TRANSACTION FEES

The fees you can expect to pay as a buyer total around 7-8% of the transaction cost, or about 3% less if going direct without a realtor involved.  The major costs are these:

  1. Real Estate Agent Commission: Buyers usually pay a commission rate of around 3% of the sale price, plus 22% ITP tax.

  2. Escribano Fees:  They usually can range from 2% to 3% of the property's sale price, plus 22% ITP tax, and are paid by the buyer, who also chooses the escribano.  In some instances, such as when an escribano has a close relationship with the real estate company, the fees can be lower.

  3. Impuesto de Transmisión Patrimonial - ITP (Transfer Taxes): The ITP is a value added tax levied on the sale of real estate in Uruguay.  It is 4% of the property's assessed “cadastral”(or catastral) value with the buyer and the seller each paying 2% at the time of the property transfer.  The "cadastral" value is NOT the same as the market value of the property.  The Uruguayan government maintains a National Registry that assigns a fiscal cadastral value to each property. This value is based on factors like location, size, and overall condition, and is generally much lower than the actual market value of the property.

 

There are also lesser fees that can total a few hundred dollars, including deed registration and stamp duty.  At the Oferta de Compra or Boleto de Reserva stage, your real estate agent or escribano can give you an accurate tally of the major fees, and a close estimate of the balance of lesser fees.

 

Once you are the owner of a property you will be liable for Contribución Inmobiliaria (Property taxes) that vary considerably from municipality to municipality.  They are generally in the range of 0.2 to 1.0 % of the cadastral value and levied annually.  In most municipalities an early payment discount is offered that can range from 5 to 20%.

 

There is also an annual Impuesto de Enseñanza Primaria (Primary Education Tax) levied by the National Administration of Public Education.  It ranges between 0.15 and 0.30% of the cadastral and also offers a discount for early payment.  This tax is not levied in some rural areas.

Some municipalities, including Montevideo, have additional fees / taxes.

 

The seller in a real estate transaction also pays a real estate brokerage fee if applicable, their 2% half of the 4% transfer tax, plus any applicable capital gains tax.  For the sale of properties that the owner purchased on 1 July 2007, or more recently, the capital gains tax is 12%, calculated and paid in pesos, but adjusted for inflation.  For the sale of properties that the owner purchased prior to 1 July 2007, the seller has the option of choosing the 12% capital gains calculation as shown above, or paying 1.8% of the total sale amount.

 

FINANCING

 

Developers and property owners often can provide financing, but generally short term.  In particular, owners might agree to more than one lump sum payment over a couple years.

 

Bank financing for foreigners is rare, and almost non-existent for non-residents.

 

Uruguayan Spanish Real Estate Glossary

Sale & Rental General Terms

  • Inmobiliaria:  Real Estate Agency

  • Propietario:  Owner

  • Inquilino:  Tenant

  • Oferta:  Offer

  • Negociación:  Negotiation

  • Reserva:  Reservation (holding the property with a deposit)

  • Seña:  Deposit (earnest money to secure a deal)

  • Entrega:  Delivery (handover of keys upon purchase/rental)

  • Plazo:  Term (duration of lease agreement)

  • Garantía:  Guarantee

  • Ley de Alquileres:  Rental Law

Property Description:

  • Casa Quinta:  Country House (house with significant surrounding land)

  • Dúplex:  Duplex (two-unit dwelling with separate entrances)

  • Triplex: Triplex (three-unit dwelling with separate entrances)

  • Monoambiente:  Studio Apartment (single room with combined living and sleeping area)

  • Planta Baja:  Ground Floor

  • Planta Alta:  Upper Floor

  • Superficie Cubierta:  Covered Area (including balconies and patios)

  • Superficie Total:  Total Area (land and covered area)

  • Amenities:  Amenities (building features like a pool, gym, or laundry room)

  • Antigüedad:  Age (of the property)

  • Año de Construcción:  Year of construction

  • Orientación:  Orientation (cardinal direction the property faces)

  • Luminosidad:  Brightness

  • Vista:  View

  • Barbacoa:  Barbecue Area

  • Parrillero:  Grill

  • M² edificados:  Built-up Area (indoor living space)

  • M² del terreno:  Land Area (total property size including outdoors)

  • Plantas:  Floors (number of levels in the property)

  • Barrio Privado:  Gated Community

  • Cantidad de Pesos:  Price (in Uruguayan pesos)

  • Contrato Minimo:  Minimum Lease Term (shortest period allowed for the rental)

  • Título de Propiedad:  Property Title (official document proving ownership)

  • Estado:  Condition (of the property)

  • M² de terraza:  Terrace Area (outdoor space on the roof or upper floor)

  • Año de Construcción:  Construction Year (when the property was built)

  • Sobre:  About or "on top of" or more than (used in descriptions, e.g., "Sobre 100 m²")

  • Vivienda Social:  Social Housing (government-subsidized housing)

  • Dormitorio de servicio:  Service Bedroom (small bedroom for domestic staff)

  • Lavadero:  Laundry Room

  • WiFi:  WiFi (availability of wireless internet)

Rental Specific

  • Garantía Cisnara:  A Uruguayan rental guarantee insurance product

  • Expensas Comunes:  Common Expenses (more detailed than Gastos Comunes, can include utilities, building maintenance, and security)

  • Exoneración de Alquiler:  Rental Exemption (tax benefit for landlords)

  • Garantía Propietaria:  Property Guarantee (using a property as security for the rental)

  • Aval:  Guarantor (someone who guarantees the tenant's rent payment)

  • Desalojo:  Eviction

 

Sale Specific

  • Boleto de Seña:  Deposit Agreement

  • Escritura Pública:  Public Deed (official document registered with the government)

  • Escribano:  Notary Public

  • Catastro:  Land Registry

  • Valor Catastral:  Cadastral Value (government assigned property value for tax purposes, spelled both Catastral and Cadastral)

  • Plusvalía Municipal:  Municipal Capital Gains Tax (separate from national Plusvalía)

  • Contribución Inmobiliaria:  Property Tax

  • Gastos de Escrituración:  Deed Expenses (fees associated with registering the deed)

  • Comisión Inmobiliaria:  Real Estate Agent Commission

 

Additional Terms

  • Ascensor Principal:  Main Elevator

  • Ascensor de Servicio:  Service Elevator

  • Vigilancia 24 Horas:  24-Hour Security

  • Calefacción Central:  Central Heating

  • Aire Acondicionado:  Air Conditioning

  • Gastos de Ocupación:  Occupancy Costs (may include utilities and building maintenance)

  • Expensas Extraordinarias:  Extraordinary Expenses (one-time building maintenance costs)

  • Salón de Usos Múltiples (SUM):  Multipurpose Room

  • Gastos de Publicación:  Listing Costs (costs associated with advertising the property)

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