Peru Real Estate: A Guide to Renting or Buying Property as a Foreigner

Renting Property in Peru

Finding a Rental Property

Foreigners looking to rent in Peru can find properties through online platforms such as Urbania, Adondevivir, and OLX Peru. Working with a licensed real estate agent can help navigate local rental laws and negotiations. Many landlords also advertise properties through local newspapers, social media, and expat communities.

Rental Agreements and Requirements

Most lease agreements in Peru are for six to twelve months, though short-term rentals are available in major cities. A security deposit equivalent to one or two months’ rent is typically required. Some landlords may ask for a Peruvian guarantor (aval or fiador), but alternatives such as prepaid rent or rental insurance may be accepted instead. Rent is usually paid monthly, and tenants are responsible for utilities such as electricity, water, gas, and internet. A notarized lease agreement is recommended for legal protection.

Average Rental Prices in 2024

Buying Property in Peru as a Foreigner

Can Foreigners Buy Property in Peru

Foreigners can buy property in Peru without restrictions, except for properties located within 50 kilometers of the national borders, which require government approval. Foreign buyers have the same legal rights as Peruvian citizens when purchasing real estate. Property ownership is secure, with a well-established property registry system.

Legal Requirements for Foreign Buyers

Foreign buyers must obtain a Peruvian tax identification number (RUC or DNI extranjero) from the Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT). This number is required for all real estate transactions. It is also advisable to hire a Peruvian lawyer or notary to handle legal documents, ensure title verification, and manage property registration.

Steps to Buying Property in Peru

Finding the Right Property

Foreign buyers should work with a licensed real estate agent and conduct research on property values in different cities. Properties in Lima, Arequipa, and Cusco are among the most sought after, while beachfront and rural properties are also popular among investors.

Conducting Due Diligence

It is essential to check the property’s ownership history, debts, and legal status. Buyers should obtain a Certificado de Búsqueda Catastral (land registry certificate) and a Certificado Registral Inmobiliario (CRI), which confirm that the seller has legal ownership and that the property is free of liens or legal claims.

Signing the Purchase Agreement and Paying the Deposit

A preliminary agreement (Contrato de Arras or Promesa de Compraventa) is signed, and a deposit of 10 to 30 percent of the purchase price is typically required. This contract outlines the terms of the sale, including payment schedule and transfer conditions.

Finalizing the Transaction

Once all legal checks are completed, the final purchase contract (Escritura Pública) is signed before a Peruvian notary. The buyer then pays the remaining balance, and the property is officially registered with the Peruvian Public Registry (SUNARP).

Costs of Buying Property in Peru

Foreign buyers should budget for additional costs beyond the property price.

• Property Transfer Tax (Alcabala Tax): 3 percent of the property value
• Notary and Legal Fees: 1 to 2 percent of the purchase price
• Registration Fees: 0.3 to 0.8 percent of the property value
• Real Estate Agent Fees: 3 to 5 percent, typically paid by the seller
• Municipal Property Tax (Impuesto Predial): Varies by location and property value

Mortgage Availability for Foreigners

Foreigners can apply for a mortgage in Peru, but most local banks require applicants to have a Peruvian residency visa and a local bank account. Interest rates typically range from 7 to 12 percent annually. Many foreign buyers choose to finance their purchase through international banks or pay in cash to simplify the transaction.

Best Cities for Real Estate Investment in Peru

Lima is Peru’s economic and cultural hub, with strong rental demand and high property value appreciation. Arequipa has a growing real estate market with affordable properties and a high quality of life. Cusco is a top tourist destination with strong demand for vacation rentals and boutique hotels. Trujillo is an emerging market with lower property prices and investment potential in commercial and residential real estate. Piura is a growing coastal city with opportunities for beachfront and tourism-related investments.

Key Considerations for Foreign Buyers

Legal Restrictions

Foreigners can buy property freely in Peru, but properties within 50 kilometers of the national borders require special government approval. Buyers should ensure that the seller has clear legal ownership before proceeding with a purchase.

Investment Potential

Rental yields in Peru range from 5 to 10 percent annually, making real estate an attractive investment. However, foreign buyers should consider currency fluctuations, market trends, and potential tax implications before purchasing.

Frequently Asked Questions

Can foreigners buy land in Peru?
Yes, foreigners can buy land in Peru, but properties located within 50 kilometers of the national borders require government approval.

Can foreigners rent out property in Peru?
Yes, foreign property owners can lease their property. Rental income is subject to Peruvian tax laws, and landlords must register rental agreements with the tax authorities.

What is the minimum investment required for property in Peru?
Apartments in major cities start at approximately $50,000 – $100,000 USD, while luxury properties and beachfront homes can exceed $500,000 USD.

Do I need to be in Peru to buy property?
No, foreign buyers can purchase property remotely by granting power of attorney to a legal representative in Peru.

Does buying property in Peru grant residency?
No, property ownership does not automatically grant residency, but foreigners who invest at least $130,000 USD in real estate can apply for an Investment Visa, which may lead to permanent residency.

Are there risks in buying property in Peru?
Yes, common risks include title fraud, unpaid property taxes, and market fluctuations. Working with a lawyer and conducting due diligence can help minimize risks.

Conclusion

Peru offers strong real estate investment opportunities for foreigners, with relatively few restrictions on property ownership. However, buyers must obtain a Peruvian tax identification number, verify legal ownership, and register their property with the appropriate authorities. Working with a real estate agent and a lawyer ensures a smooth and secure property transaction.

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