Buying Real Estate in Guatemala: A Complete Legal Guide

## Buying property in Guatemala The purchase of real estate is one of the most important transactions you can make. In Guatemala, it is regulated primarily by the **Civil Code (Decree-Law 106)**, which establishes the requirements for property transfer, and by tax laws such as the **Real Estate Transfer Tax Law (Decree 20-2006)**. --- ## Step-by-step process ### Step 1: Due diligence Before buying, verify: - **Registry certification:** Request from the **General Property Registry (RGP)** a certification of the property confirming: - Who the current owner is - Whether there are encumbrances (mortgages, liens, annotations) - Whether there are preventive annotations - Exact measurements and boundaries - **Tax status:** Verify that the property tax (IUSI) is current - **Physical condition:** Visit the property and verify it matches what is registered - **Public services:** Verify availability of water, electricity, drainage ### Step 2: Promise of sale (optional) Before the definitive deed, parties can sign a promise of sale that fixes the price and conditions. It may include earnest money (arras) as a guarantee. ### Step 3: Transfer deed The sale must be in a **public deed** before an **authorized notary**. The notary: - Verifies the identity of the parties - Confirms the seller's ownership (with registry certification) - Drafts the sale deed - Includes the price, payment method, and property description ### Step 4: Tax payment Before registering the transfer, the following must be paid: - **Real Estate Transfer Tax:** 5% of the transfer value (Decree 20-2006), paid to SAT - **Value Added Tax (IVA):** 12% if it is a business sale - **Notary fees:** Generally 2-3% of the property value ### Step 5: Registration at the General Property Registry The deed is filed with the **RGP** to register the transfer in the buyer's name. Registration is **constitutive**: until registered, the transfer is not enforceable against third parties. ### Step 6: Cadastral and municipal update - Update the cadastral record - Update the property tax (IUSI) account at the corresponding municipality --- ## Single Property Tax (IUSI) The **Single Property Tax Law (Decree 15-2012)** annually taxes property ownership: - **Rate:** 0.9% of the property value (with base exemption) - **Collector:** The municipality where the property is located - **Discount:** 25% for early annual payment - **Exemption:** Properties valued below the established threshold --- ## Documents you will need - Registry certification of the property (from RGP) - Property deeds (from the seller) - Copy of DPI of buyer and seller - If financing: bank approval letter - Tax payment receipts - Appraisal (if required for financing) --- ## Authorities involved | Authority | Role | |---|---| | Authorized notary | Drafts the public deed | | General Property Registry (RGP) | Registers the transfer | | Superintendence of Tax Administration (SAT) | Transfer tax | | Municipality | Single Property Tax (IUSI) | | Guatemalan Social Security Institute (IGSS) | Solvency certification (if applicable) | --- ## Estimated costs - **Transfer tax:** 5% of property value - **Notary fees:** 2-3% of property value - **RGP fees:** Approximately Q100 to Q500 - **Annual IUSI:** 0.9% of value (with 25% discount for early payment) --- ## Legal basis - **Civil Code** (Decree-Ley 106), articles 658-680 (real property), 1640-1700 (sale) - **Real Estate Transfer Tax Law** (Decree 20-2006) - **Single Property Tax Law** (Decree 15-2012) - Available at: www.congreso.gob.gt *This article is informational and does not constitute legal advice.*