Property Ownership Taxes at a Glance
Paraguay property tax questions for foreign owners usually include annual property tax, rental income tax, capital gains, and transfer taxes. This guide covers the main Paraguay real estate taxes to understand before you buy or rent out a property.
How to read this table
| Tax | Rate | Tax Base | Notes |
|---|---|---|---|
| Annual property tax (impuesto inmobiliario) | Set by each municipality; commonly around 1% of cadastral value for urban property | Fiscal/cadastral value | Usually much lower than market value |
| Rental income tax (resident) | 8% IRP | Rental income (capital income) | Declared through the RUC |
| Rental income tax (non-resident) | 7.5% effective (INR 15% over a presumed 50% base) | Gross rent, presumed base fixed by law | Final withholding, no filing (Ley 6380 Art. 75 num. 3) |
| Capital gains on sale (resident individual) | 8% IRP over 30% of price = 2.4% effective; real-gain election available | 30% of transfer value (presumed), or actual gain if elected | Notary withholds 100% at the escritura (RG 42/2020 Art. 2) |
| Capital gains on sale (non-resident) | IVA 1.5% + INR 4.5% effective (5% and 15% over 30% base) | 30% of transfer value | Notary withholds at the escritura (RG 42/2020 Art. 3) |
| Tax on transfer (IVA on enajenación) | 5% applied to a 30% base = about 1.5% effective | 30% of transfer value | Non-resident sellers; due at closing (RG 42/2020 Art. 8) |
| Wealth tax | None | - | No wealth tax in Paraguay |
| Inheritance tax | None | - | No inheritance tax; see the inheritance guide |
| Gift tax | None | - | No gift tax; the deferred 8% rule applies to resident recipients on later disposal |
Annual Property Tax (Impuesto Inmobiliario)
Property tax Paraguay owners pay is levied by municipal governments, not the national government. Impuesto inmobiliario Paraguay rules use fiscal/cadastral value as the base - this is usually significantly lower than market value. The rate varies by municipality (verify current rates for Asunción and other cities).
Payment schedule: typically annual, some municipalities allow quarterly installments. Unpaid property taxes accumulate and attach to the property - the buyer inherits the debt.
How to check: request the tax clearance certificate (certificado de solvencia municipal) through your escribano.
Fiscal Value vs Market Value
The tax base is the fiscal/cadastral value assigned by the municipality, not the market price you paid. Fiscal values are often 30-50% of market value (this is a general estimate, not a rule - verify locally). Municipalities periodically reassess fiscal values, especially in developing areas.
You cannot negotiate fiscal value at purchase - it is set by the municipality.
Rental Income Tax
Rental income tax Paraguay owners need to consider starts from a simple rule: rental income from Paraguayan property is Paraguayan-source income, taxable in Paraguay regardless of where the owner lives.
Resident owners: rental income is capital income under personal income tax (IRP), taxed at the flat 8% capital rate. See the IRP rates guide for the full structure.
Non-resident owners: the INR withholding applies at a nominal 15% over a presumed net base of 50% of gross rent - a conclusive presumption set by Law 6380/2019 Art. 75 num. 3, so the effective rate is 7.5% of gross rent, withheld and final. A landlord renting an Asunción apartment for USD 1,200 a month (USD 14,400 a year) pays 7.5%: USD 1,080, with no Paraguayan return to file. The full schedule, including the treaty angle, is on our non-resident tax (INR) guide.
If you plan to rent out property, register for a RUC (tax ID). See RUC Registration. VAT (IVA) may apply to lease agreements - verify with a local tax advisor.
Capital Gains Tax on Property Sales in Paraguay
Capital gains from selling Paraguayan property are Paraguayan-source income, and the collection point is the escritura itself: under RG 42/2020, the intervening notary acts as withholding agent for 100% of the tax when a physical-person seller signs the deed (compraventa, dación en pago, permuta, or onerous cession, including hereditary shares).
Resident individuals pay IRP at 8% over a presumed base of 30% of the transfer value, an effective 2.4% of price. You may instead elect real-gain taxation in the deed: sale price minus documented purchase cost minus itemized expenses (notary fees, taxes, registration, management and advertising, intermediary fees) - worth doing when the actual gain is under 30% of price.
Non-resident sellers carry two withholdings: IVA at 5% over 30% of the price (about 1.5% effective) plus INR at 15% over 30% of the price excluding IVA (about 4.5% effective). When the stated price is IVA-inclusive, the notary divides by 1.015 first. Subdivided-lot (loteo) sales follow RG 35/2020 instead: the loteadora company withholds and notary retention is expressly excluded.
Do not assume Paraguay's territorial tax system exempts capital gains on local property - it does not. The full three-lens rate picture is in our capital gains tax guide.
Tax on Real Estate Transfer (IVA on Enajenación de Inmuebles)
For non-resident sellers, the transfer carries IVA at a 5% rate applied to a 30% base - approximately 1.5% effective - withheld at closing under RG 42/2020 Art. 8. This is confirmed regulatory text, not a competitor estimate; do not use "ITI 1-3%" figures from other sites.
This is a closing cost, not an annual cost - covered in the closing-cost breakdown on the buying guide.
Worked example: selling a USD 200,000 apartment
- Resident seller (presumed base): 30% of 200,000 = 60,000 base x 8% IRP = USD 4,800 withheld by the notary (2.4% of price).
- Resident seller (real-gain election): bought at 150,000 with 6,000 of documented costs = 44,000 gain x 8% = USD 3,520 - saves 1,280 when the deed records the actual figures.
- Non-resident seller (price IVA-inclusive): 200,000 / 1.015 = 197,044; 30% = 59,113; IVA 5% = 2,956 + INR 15% = 8,867 = USD 11,823 total (about 5.9% of price).
Property Insurance
Not mandatory but recommended. Coverage typically includes fire, theft, natural events, and liability. Annual premiums vary - verify current ranges with local insurers. If renting out, confirm coverage includes tenant-caused damage.
International insurance companies operate in Paraguay; local options also exist.
Property Management for Absentee Owners
If you live outside Paraguay, consider professional property management. Typical services: tenant screening, rent collection, maintenance coordination, periodic inspections.
Fee structure varies - verify current market rates with local providers. Some management companies also handle tax filings and utility payments.
Property management is an unregulated industry in Paraguay - vet providers through references and written contracts.
Short-Term Rentals (Airbnb)
Short-term rentals are generally legal in Paraguay, but building or condo rules may restrict them. Check the reglamento de copropiedad before purchasing an apartment if you plan to do short-term rentals.
Tax implications: short-term rental income is Paraguayan-source income and taxable. If you use platforms like Airbnb, they may collect and remit taxes directly - verify current treatment with a local tax advisor. Register for a RUC regardless. See RUC Registration.
Municipal restrictions may apply in some areas. Verify local rules before committing to a short-term rental strategy. Property management for short-term rentals is more involved than long-term - factor in cleaning, guest communication, and dynamic pricing if self-managing, or management company fees if outsourcing.
Budgeting for Ongoing Costs
- Annual property tax (based on fiscal value, usually modest)
- Insurance (if purchased)
- Property management fees (if absentee owner)
- Maintenance reserve (budget 1-2% of property value annually as a general planning figure)
- Utility costs (see the Housing Guide for detail)
- Rental income tax (if renting out)
For full budgeting context, see Cost of Living in Paraguay and the Tax Guide.
Buying property? You will likely want residency too
A cédula and proof of address smooth property registration, banking, and utilities. If you are buying, residency is usually the practical next step.
Explore Residency Options