Both expat residents and nonresidents can buy property in Peru. Most expats choose to be represented by a real estate agent, as the whole process is more transparent and the buyer is usually more confident in the properly completed transaction. The process of buying and registering a property can take between a week and two weeks. It is vital that you get a Property Registry Certificate (Certificado Registral Inmobiliario), which confirms the existence of your home and its information details. Before signing a contract, you should go to SUNARP and check the status of the property (this can also be done online ).
Expats might consider having a professional interpreter or lawyer translate the official documentation so you can make sure that you know who the current and previous owners are, or if there are existing mortgages.
It is important that you insist on receiving the original documents from the owner of the property, and not copies, and also make sure all the legal documentation is up to date.
You should make sure you know exactly what the restrictive covenants are, for example, whether you’re allowed to use the property as an office space or build an extension. It is important to know if the current owner has paid all the taxes necessary, such as the property tax and the municipal services tax.
Additional costs
Transaction costs that have to be paid when buying a property in Peru include:
- transfer tax
- notary fee
- real estate agent fee
- registration fee
The seller of the house pays the real estate agent fee whilst the other three are paid by the buyer. Overall the transaction costs vary between 6% and 9% of the total cost of the property. Transfer taxes are normally imposed at 3% in Peru.
Mortgages in Peru
Many expats decide to get a mortgage when buying property in Peru. You need to have Peruvian residency/citizenship to be able to get a mortgage from a Peruvian bank. The interest you have to pay is around 10%.
Home insurance
When buying a property in Peru, home insurance is essential. Particularly if you’re buying as an investment or a holiday home and may be away from your property for several months of the year.
Peru is prone to earthquakes as the Nazca and South American tectonic plates lie just off the coastline. With this in mind earthquake insurance is something to consider, this will insure, should an earthquake damage your home, all or most costs are covered.
Real estate tax
Real estate tax in Peru is called Impuesto Predial and is paid annually by the owner of a property. It is charged on the cadastral value of the property and is determined by the Peruvian government. The tax liability is settled in the official tax unit, which is UIT (Unidad Impositiva Tributaria).
Utilities
In general, utilities are at very reasonable prices in most Peruvian cities. In Lima for example, you can buy a package that includes phone, high speed Internet and cable for about US$35 per month (around 97 Peruvian Nuevo Soles). You could pay around US$100 (around 270 Nuevo Soles) for water, electricity and gas, considering a big family is making use of all of these utilities.