Family house with garden, property purchase in Paraguay

Buying Property or Land in Paraguay as a Foreigner: Legal Process, Taxes and Pitfalls

Investment & Finance 5 min read

Can a foreigner own property in Paraguay?

Yes. The Paraguayan Constitution guarantees private property without distinction of nationality, and a foreigner, resident or not, can buy urban and rural real estate in their own name or through a company. There is one significant restriction: Law 2532/05 on the border security zone prohibits foreigners from neighbouring countries (Argentina, Brazil and Bolivia) and companies controlled by them from owning rural land within 50 km of the border, unless authorised by decree. For everyone else, and for urban property anywhere, there is no limitation.

Owning property does not by itself grant residency. Real estate only counts towards residency under the Investor Pass when the investment reaches USD 200,000 and the property has a commercial or rental purpose.

Due diligence: what to check before paying anything

  1. Title and ownership: request the certificado de condiciones de dominio from the Dirección General de los Registros Públicos, which shows the registered owner, liens, mortgages and embargoes.
  2. Cadastre and boundaries: compare the title’s surface and the cadastral plan with a surveyor’s measurement; boundary disputes are the most common problem in rural land.
  3. Municipal and tax debts: property tax (impuesto inmobiliario) and municipal fees follow the property, not the seller.
  4. Seller’s identity and capacity: marital status (spousal consent is required for family property), powers of attorney, company resolutions.
  5. Possession: visit the land and confirm there are no occupants; Paraguayan law protects long-standing possessors and evictions are slow.
  6. Zoning and environment: municipal use rules in cities, environmental licences (MADES) for rural projects, and the border strip rule.

Never pay a deposit against a private boleto de compraventa without these checks; that document is binding for you but does not transfer ownership.

The purchase process step by step

  1. Reservation or boleto de compraventa with the agreed price, deadlines and conditions, ideally drafted by your lawyer.
  2. Escritura pública before a Paraguayan escribano, who verifies the chain of title, tax clearances and identities. If you are abroad, a power of attorney apostilled in your country lets a representative sign.
  3. Payment, normally by bank transfer; cash purchases above the thresholds of the anti-money-laundering rules must be reported by the escribano (SEPRELAD).
  4. Registration of the deed at the Registros Públicos, which makes the transfer enforceable against third parties. Expect a few weeks.
  5. Cadastre update and municipal registration in the buyer’s name for the property tax.

A foreigner needs a passport or cédula to sign; a Paraguayan RUC is required if the property will generate rental income or if the buyer is a company.

Handing over the keys of a property

Taxes and costs when buying

  • VAT (IVA): the sale of real estate is subject to VAT at 5% on a reduced base (30% of the price), i.e. an effective 1.5%, usually included in the price of new developments and paid by the seller in resales.
  • Notarial fees: regulated scale, roughly 1%–2% of the price depending on value, plus VAT.
  • Registration fees at the Registros Públicos and municipal cadastre: small percentages and fixed amounts.
  • Legal fees for due diligence and contracts.

There is no separate transfer tax and no stamp duty. Total transaction costs typically land between 3% and 5% of the price for the buyer, lower than in most of Europe.

Taxes while you own and when you sell

Impuesto inmobiliario: an annual municipal tax of 1% of the fiscal value, which is usually far below market value, so the effective burden is low. Rental income is taxed under the personal income tax (IRP) at 8%–10% on net income, or under the corporate tax (IRE) if held through a company, and rents are subject to VAT at 5%. On a sale, individuals pay IRP capital gains on a presumed base of 30% of the price at 8%, an effective 2.4%, unless they opt to prove the real gain. Non-resident sellers are taxed at source under the non-resident regime.

Farmland and rural plots in Paraguay

Buying as an individual or through a company

Individuals enjoy simplicity and the low presumptive tax on sale. A Paraguayan EAS makes sense for portfolios, for projects that will invoice rents or developments, and for investors structuring an Investor Pass file, because the investment is documented in the company. Foreign companies can also buy directly, but must register a legal representative and obtain a RUC. We review the structure before the boleto is signed; see our real estate investment service.

Frequently Asked Questions about Buying Property in Paraguay

Can foreigners buy land in Paraguay?

Yes, with the same rights as citizens, except rural land within 50 km of the border, which nationals of neighbouring countries and companies they control cannot own without authorisation (Law 2532/05).

Does buying property give me residency?

No. Only an investment of at least USD 200,000 in real estate with commercial or rental purpose qualifies under the Investor Pass; a family home does not.

What are the closing costs?

Roughly 3%–5% of the price: notarial fees (about 1%–2% plus VAT), registration and cadastre fees, legal fees and, in new developments, VAT at an effective 1.5% usually included in the price.

How much is the annual property tax?

1% of the fiscal value assessed by the municipality, which is normally much lower than the market value.

What tax do I pay when I sell?

Individuals pay IRP on a presumed gain of 30% of the price at 8%, an effective 2.4% of the sale price, unless they prove a lower real gain. Companies pay IRE at 10% on the actual profit.

Can I buy from abroad?

Yes. With an apostilled power of attorney a representative can sign the deed in Paraguay; payment is made by bank transfer and the deed is registered in your name.

Want to review your case with a specialist?

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Legal Migration Paraguay team

Lawyers and migration specialists based in Asunción. We handle residency, citizenship, company formation and tax residency files for foreign clients, and we update our guides whenever the DNM, SUACE or the tax authority change the rules. About us →

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