If you've been following the Uruguayan market for a few years, you probably know the classic argument for investing in Punta del Este: legal stability, the dollar as the currency of transactions, property rights for foreigners identical to those of nationals, and an accessible path to tax residency through real estate investment.
That argument still holds true. But the rules changed on January 1, 2026, and many investors are still using outdated data. It's worth updating it.
The key change: the new threshold for real estate investment
Until 2025, the most common way to obtain tax residency through investment was to purchase a property for approximately USD 550.000 (3.500.000 UI) and maintain a minimum presence of 60 days per year in Uruguay. This threshold was widely accessible and explained a significant portion of the influx of Argentine and European investors to eastern Uruguay.
With the 2025-2029 National Budget Law, the system was updated. For those who acquire tax residency status from January 1, 2026, and wish to access the tax holiday through real estate, the minimum investment became UI 12.500.000, equivalent to approximately USD 2.000.000, while maintaining the requirement of a minimum presence of 60 days per year.
There is also an alternative designed for different profiles: an annual investment of UI 625.000 (around USD 100.000) in investment funds intended to finance productive projects, research or innovation.
What remains the same and what has improved
In exchange for the new thresholds, the main benefit was extended. The tax holiday went from 5-6 years (original regime) or 10 years (extension) to a full 11 years—the year of the change plus the following 10—during which the new tax resident is exempt from taxing income from movable and immovable capital and capital gains obtained abroad.
Once that period has elapsed, the taxpayer can choose to pay personal income tax at 50% of the corresponding rate for the following 5 years, which extends the effective benefit to 16 years.
The other ways of establishing tax residency —staying for more than 183 days a year, center of vital interests, center of economic interests— remain unchanged and continue to be valid options depending on the taxpayer's profile.
How to interpret this change if you're evaluating an investment
The new threshold of USD 2 million may sound high, but it's worth putting it into context:
For those already planning to purchase a high-end property in Punta del Este, the change has virtually no impact. Units in projects like SLS, THE ROCK, or Le Parc IV, priced in that range, are already within the natural target market of international buyers evaluating the destination. For this profile, the tax regime remains competitive compared to alternatives like Portugal, Spain, or the United States.
For those aiming for a more affordable property (USD 400.000-700.000) and for whom tax residency was the primary driver, the landscape has changed. Today, such a purchase remains an excellent investment due to its potential for appreciation and rental income, but it no longer automatically qualifies for the tax holiday through real estate transactions. The alternative may be to combine the investment with the 183-day tax holiday option, or to explore investment funds.
If you were already a tax resident before 2026 or exercised the original tax holiday option, you retain the conditions of the previous regime. It is important not to confuse the two schemes.
Why Uruguay continues to compete well internationally
Beyond the specific tax holiday regime, there are structural variables that contribute to the country's attractiveness and that have not changed:
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No restrictions on foreign ownership. International investors have exactly the same rights as nationals, without additional procedures or prior authorizations.
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No capital gains tax on sales of real estate abroad for tax residents under the new regime.
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There are no exchange controls or currency restrictions. The market operates normally in dollars.
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Recognized institutional stability. Uruguay consistently ranks among the least corrupt countries in the Americas and among the highest in economic freedom.
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A solid, transparent banking system open to foreign investors.
For a buyer with international assets, these factors carry as much or even more weight than the specific tax regime. They explain why the flow of investment continues unabated.
What to do before making the decision
Three things we always recommend, without exception:
First, tax advice in both the country of origin and the destination country. The tax regimes interact. What is optimal in Uruguay may have unintended consequences in the country of origin, especially for Spanish residents, Argentinians (given recent reforms), or US citizens due to their universal taxation.
Second, complete due diligence of the property. Beyond the standard notary review, it is advisable to check the developer's background, specific conditions of the construction trust when applicable, and delivery clauses.
Third, planning the ownership structure. Buying in your own name, through a Uruguayan company, or through a foreign structure—each option has different tax and inheritance implications. The right decision depends on each investor's profile.
Are you considering structuring an investment in Uruguay? At Luxury Punta, we work with a team of legal and tax advisors specializing in international clients. We coordinate the real estate transaction and connect you with the right professionals to ensure your investment is well-structured from day one.
(I.e. luxurypunta.com
Note: This article is for general informational purposes. Indexed unit (UI) figures vary depending on the current exchange rate. For a specific assessment of your situation, consult a qualified tax advisor.
