URUGUAY REAL ESTATE

 

What makes Uruguay an attractive market to invest in real estate? Why are more and more foreigners seduced by him?

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URUGUAY

Uruguay is the safest country in Latin America, the best in political and economic stability, the most transparent and the least corrupt. 

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URUGUAY REAL ESTATE

Within Latin America, and perhaps beyond these borders, Uruguay is considered a safe and stable country, both politically, socially, and economically. This makes it an ideal destination to invest and, why not, to live. 

On the one hand, Uruguay is a country where lhe indicators of governance, per capita income and social development have been constant. Stability makes policies predictable despite changes in government and that gives citizens a lot of peace of mind and, even more so, investors. 

On the other hand, Uruguay continues to have a strong democracy and ranks well in global rankings for institutional quality. Uruguayan society enjoys social cohesion and political-social disputes take place in a climate of consensus without excessively destabilizing its structure. The Uruguayan is peaceful and usually reaches agreements through dialogue. 

In addition to this, for the foreign investor, in Uruguay the regime of total freedom in the exit and entry of capital and currencies is applied, as well as a free exchange system of convertibility for the Uruguayan currency, which makes it a very accessible market.

Uruguay continues to establish clear policies in relation to its economy, so the ups and downs do not greatly affect the investor and that generates security and peace of mind for those who decide to bet on the brick. In addition, policies have accompanied this explosion in the sector with laws and programs that encourage construction by granting tax benefits to investors. 

Finally, the Uruguayan real estate business shows good profitability and is in a very dynamic moment, with diverse and interesting proposals, so there is plenty to choose from. 

In other words, for the foreign investor: the risk is minimal and the return is high!

But, the world economy is not going through its best moment and the weakening of the dollar against the national peso is turning on some alarm lights. Why? Because the dollar is at a lower price, businessmen raise their prices to cover costs since the projects cannot be done with the same amount of money. 

However, experts say that the Uruguayan real estate market has a particular behavior in times of crisis, for example, in full collapse due to the coronavirus it exploded, achieving record purchases and inquiries from both Uruguayan and foreign investors. Not only that, the pandemic also opened a new door because homes became the nerve center of family, work, and social activity. In this way, new habits were installed, new ways of rethinking how to live and enjoy the home and the immediate surroundings, and this triggered new ideas with more creative proposals. 

The president of the Uruguayan Real Estate Chamber, Beatriz Carámbula, expects 2023 with "dynamic and constant activity in the real estate market because investment in this area continues to be one of the most accessible, as well as attractive and stable, compared to others" .

The Uruguayan market is also expected to continue deepening the diversity of constructions, ranging from promoted housing to buildings with amenities and private neighborhoods. These trends represent very tempting options both to invest and to reside. Beatriz Carámbula is confident that mortgage loans will grow, both in number of operations and in amount, due to the good signs shown by the Uruguayan economy. A stable demand is expected for next year, which will be reflected not only in the rental of homes but also in commercial premises. On the other hand, the demand for rentals also increases, which continues to be a very attractive option for investors.

It is true that the world is very unstable and investing may generate some misgivings, but real estate developers have high expectations for the Uruguayan economy in general and the real estate sector in particular. 

Many times an unstable global economic situation causes a brake on investment due to fear, but the option to anticipate and be able to buy today is intelligent and valuable. Without a doubt, investing in real estate in Uruguay is safe and profitable.

If you are thinking of investing in real estate in Uruguay, you probably have some questions. We will try to answer the most frequent ones.

FREQUENT QUESTIONS:

WHAT CAN A FOREIGNER BUY IN URUGUAY? URUGUAY REAL ESTATE
There are no restrictions on any type of property for foreign buyers. All you need to buy a property in Uruguay is a valid passport and proof of funds. The government protects foreign investment through the laws of the country. and foreigners have the same property rights as Uruguayans so they can carry out any economic activity they want.

DO I NEED TO BE A PERMANENT RESIDENT TO HAVE A HOUSE OR DO BUSINESS IN URUGUAY?
No, it is not necessary to be a resident to own a property or do business, as long as the maximum stay of 180 days per year is not exceeded.

WHAT DOES A PUBLIC NOTARY CALLED "SCRIBANO" OR "SCRIBAN" DO IN URUGUAY? URUGUAY REAL ESTATE
Protects the buyer's interests in the buying process, much like an escrow/title agent in the United States. Check the history of the deed/title in the last 30 years and draft the pre-sale agreement and the final sale contract. Likewise, it structures the purchase and is in charge of the initial payment or deposit and the final payment, and registers the purchase in the Public Registry.

HOW DOES THE PUBLIC REGISTRY WORK IN URUGUAY?
Each property is identified with a number called "Padrón" and is registered by its Padrón number in the Public Registry, which is subdivided into geographical sections. The registry has all the property history, liens and mortgage information to ensure that the buyer receives a clean title.

HOW DOES THE PURCHASE PROCESS WORK IN URUGUAY? URUGUAY REAL ESTATE
The buyer selects a property with their real estate agent, and the buyer and seller verbally agree on a price through their agents. The buyer selects his notary public who contacts the seller's notary public. The notary is the one who draws up a "Reservation Ticket" based on the verbal agreement of the buyer and the seller to ensure the purchase conditions. At that time, the buyer has to deposit 10% of the sale price with his notary public and this deposit remains in the "Escrow" trust account. In the event that any of the parties breaches the purchase contract, a fine is established that is usually 10% of the purchase price, called the "Deed of Sale". The seller, for his part, delivers all the documents related to the property, including the deed, which rules out any possibility of selling the property in question to a third party. Next, it takes 30-45 days to study the title, the chain of records and the tax situation. Afterwards, a closing date is set for the payment of the balance, the signing of the final documents, the transfer of ownership and the public registry.

WHAT ARE THE COSTS OF THE PURCHASE TRANSACTION FOR THE BUYER IN URUGUAY?
The real estate agent's fees amount to 3% plus VAT (22%) and those of the notary public, to 1,5% plus VAT (22%) (if the notary/lawyer we recommend is used, since it is usually the 3 % plus VAT). To that must be added the Notarial taxes (“Montepíos”) which are 0,55%, plus USD 600 – 800 from obtaining all certificates, stamp duty for registration of the deed and all payments to government agencies.
The Real Estate Transfer Tax (ITP) is 2% of the Fiscal Cadastral Value of the Property (which is usually substantially less than the market value. This amount may vary slightly due to the fluctuation of the exchange rate and will be determined in the time of closing date).
In total, the transaction costs for the Buyer are approximately 7% in Uruguay.

DO I HAVE TO BE IN THE COUNTRY TO COMPLETE THE PURCHASE? URUGUAY REAL ESTATE
You do not need to be in the country to close the purchase. Through a "power of attorney", you can designate someone you trust to handle the signing of the contract for any purchase. The cost of a power of attorney is approximately $400.

DOES HAVING A PROPERTY ALLOW ME TO GET A RESIDENCE?
Not automatically. Many other aspects must be met, such as proof of income, etc. We can recommend immigration specialists who speak English and German. Please see our Residency/Immigration page.

CAN I HAVE A HEALTH SYSTEM? URUGUAY REAL ESTATE Until the age of 65, entering the health system is not usually a problem, and contributions are the same regardless of age, around 120 or 180 dollars a month. 

Medical care is much cheaper than in the United States or Europe. A good comprehensive health plan offers a choice of different hospitals for a monthly fee of $100-120. In general, the medical level is quite high in Uruguay.

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