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Peru Property Taxes on Investment Properties

This post is also available in: Spanish

 

Peru Property Taxes on Investment Properties

Peru Property taxes apply to all properties that were bought to be resold ( trading properties ), or properties that were built to be sold (developers ), and properties that were bought and sold after January 1st, 2004, are ALL subject to the “Impuesto a la Renta”, or profit tax ( capital gain tax ).

Transactions that involve transfers of properties that are subject to the capital gains tax, are also subject  to  tax duties to the Peruvian tax authority (Sunat) and local town halls, according to the Commerce Chamber of Lima (CCL).

“To determine the updated value of the properties to be transferred between September 6th and October 15th of 2015, buyers and sellers need to take into account the adjustment factor that was approved by the RM 277-2015 that addresses the payment of the capital gains tax,” said Victor Zavala, manager of the Legal Center of the CCL.

Tax Duties

According to the CCL, Properties that were bought to be resold, properties that were built to be sold, and properties that were bought and sold after January 1st, 2004, are ALL subject to the “Impuesto a la Renta”, or capital gains tax, except when the property is considered to be the seller’s only home, where the seller lives.

One should keep in mind that since 2009, the capital gains tax for the sale of a property is 5% of the profit obtained from subtracting the updated value of the property from the amount for which the property was sold. For example, if the updated value of the property is 100,000 Peruvian Soles, and the property was sold for 150,000 Peruvian Soles, the profit will be 50,000 Peruvian Soles, and the profit tax will be 5% of 50,000, which is 2,500 Peruvian Soles.

For properties that were acquired through a purchase, the updated value is obtained by using the factor that the Department of Economy and Finance (MEF) publishes on a monthly basis, taking into account the month and year of acquisition.

For example, if a property was acquired in January of 2005 for 50,000 Peruvian Soles, and it is sold between September 6th and October 15th, 2015, the adjusting factor is 1.32, and the updated value is 50,000 * 1.32 = 66,000 Peruvian soles.

For the case of properties that were inherited or donated, the acquisition cost will be zero or the amount that was paid by the previous owner, as long as this can be proved. For example, if the passed-away father paid 50,000 Peruvian Soles for the property and it is then sold by his son for 80,000 Peruvian Soles, the profit will be 30,000 Peruvian Soles, and the profit tax will be 5% of 30,000, which is 1,500 Peruvian Soles.

Information Supplied by

Jose Jesus Salinas
Inmobiliaria Virginia E.I.R.L.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

www.gatewaytosouthamerica.com

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