Uruguay’s Luxury Residential Real Estate Market
URUGUAY’S LUXURY RESIDENTIAL MARKET OVERVIEW
Uruguay’s luxury residential real estate market reached a peak in 2011, and has largely deflated since then, causing prices in the most areas to drop for all but a few the top tier of properties. The overall market has dropped by about 25 percent, but homes priced at $3 million or more have been less affected. There also has also been a large reduction in the volume of transactions making the market somewhat depressed.
The market’s softening was caused by Argentina’s and Brazils economic and political troubles with the majority of buyers in the popular high value areas such as Punta del Este coming from Argentina and Brazil.
Argentina elected a new president in December of 2015, and while that hasn’t yet affected the real estate market in Uruguay, there is “a strong overall expectation” that the positive change in the right direction will eventually lead to more investment in Uruguay and other surrounding countries.
Local sellers are already less motivated to accept discounts than they had been in the past in anticipation of this but their optimism may be premature as foreign investors will first look at the more attractively priced Argentine market which up to now has been difficult to enter due to currency restrictions ( they are now lifted ) and a non business friendly populist government ( now removed and replaced by a progressive business friendly one).
The Uruguay costal regions have a broad range of housing options, from apartment towers to trendy beach homes and expansive country estates.
Luxury homes or Country Homes tend to cost from $2 million to $5 million, with the highest reaching around $15 million.
WHO BUYS IN RESORTS LIKE PUNTA DEL ESTE
Resorts like Punta del Este has traditionally appealed to buyers from neighbouring Argentina and Brazil, with historically, three-quarters of the region’s buyers for all residential properties coming from there.
However in the past 10 years or so, buyers from the United States and Europe have been increasingly investing in high-end properties. Argentines buy homes for investments and vacations, whilst Americans and Europeans look to buy retirement homes.
There are no restrictions on foreigners purchasing property. Buyers must retain a Notary, known as an escribano, who performs notary duties and does due diligence on the property purchase and who will typically charge between 2 and 3 percent of the purchase price depending on its value. This Notary drafts the purchase document, accepts the down payment, does a title search and records the change of the deed.
Uruguay has a very solid and reliable property registry system that is said to be the equal to any other country.
The vast majority of properties are sold via real estate brokers who charge a real estate professional fee of 3.66 percent of the purchase price, which includes a Value-Added Tax ( IVA ) on that fee. The Residential Real Estate Industry in Uruguay is highly regulated to protect the buyer from fraud.
Buyers need not be present at closing. They can sign papers remotely by granting a power of attorney from their own country to a lawyer in Uruguay. Real estate transactions are done in United States dollars.
OFFICAL LANGUAGE AND CURRENCY
Spanish: Uruguayan peso (1 peso = $.034)
TAXES AND FEES
Property purchases in Uruguay are subject to several taxes. One is a property transfer tax, which is, on average, 0.5 percent of the purchase price. In addition, buyers must pay registry and stamp duties that total around 0.8 percent.
Annual property taxes vary but average around 0.5 percent.
Contacts Web: www.gtsa-uruguay.com
Contact Email: [email protected]
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Gateway to South America was established in 2006 as a single office in Buenos Aires. The company has since expanded into a vibrant regional network, servicing the Southern Cone communities of Argentina, Brazil, Chile, Paraguay, Peru and Uruguay with professional real estate services. Founded by Geoffrey McRae a New Zealander who maintains an active role in the business it has developed into an International team that has a well-deserved reputation for strong local knowledge, experience and professionalism. I hope you enjoy reading our news site. Please share it on your social media below.