Questions and Answers | Uruguay Real Estate | Punta Del Este Rentals | The Haverkate Team

Questions and Answers

 

Why should I buy in Uruguay?

• Uruguay is Latin America’s safest country!

• Top ranked in political and economic stability!

• Top ranked in transparency and lack of corruption!

• No social turmoil. There is a true middle class and Uruguay has South America’s lowest income gap.

• Solid legal system with respect of contracts and private property!

• Very good Health system!

• Mild climate!

• Well developed, good and modern infrastructure and doesn’t feel like a third world country!

• Pristine clean beaches along the whole coast!

• Fresh farmland meat, vegetables and fruits.

• You truly feel welcome in this country!

 

What can a foreign buyer purchase in Uruguay?

There are no restrictions on any property type like borderline property, beachfront etc. for foreign buyers. All you need to buy real estate in Uruguay is a valid passport. The government protects foreign investment by the country’s laws. Foreigners have the same property rights as Uruguayans and can carry out any economic activities they desire.

 

How can I buy property?

In any way as individual, local or foreign corporate vehicle, IRA!

 

Do I need to be a permanent resident in order to own a house or to do business in Uruguay?

No, residency is not required for owning property or doing business.

 

With whom should I buy property?

First of all make sure you have a good local real estate broker who also speaks your language and a good notary, which is type of a buyer attorney in Uruguay. This combination guarantees for an unproblematic transaction. We at Engel & Voelkers offer you a choice of very good “escribanos” at special rates.

 

What does a Notary Public called “Escribano” or “Escribana” in Uruguay do?

He protects the interest of the buyer in the purchase process like an escrow/title officer in the United States and verifies the deed/title history 30 years back. He drafts the purchase agreement, structures the purchase and handles the down payment or deposit. The “Escribano” records the purchase at the Public Registry.

 

How does the Public Registry work in Uruguay?

Every property is identified by a number called “Padron” and recorded by its Padron number at the Public Registry, which is subdivided into geographical sections. The registry has all the ownership history, liens and mortgage information to guarantee that the buyer receives a clean title.

 

How does the purchase process work in Uruguay?

The buyer selects a property with its real estate agent and buyer and seller agree verbal on a price through their agents. The buyer selects his “escribano” and the buyer escribano contacts the escribano of the seller. The escribanos of both sides draft a “Boleto de Reserva” based on the verbal agreement of buyer and seller and secure the purchase. A fine of usually 10% of the purchase price is set in case either party breaches the purchase contract called the “Escritura de Compraventa”. Usually the buyer has to deposit 10% of the asking price with its escribano and this deposit stays in “Escrow”. The seller, for his part, hands over all the documents related to the property, including the title deed, which rules out any possibility of selling the property in question to a third party. Then it takes about 30-45 days to study the title, chain of history and tax situation. A closing date is set for the balance to be paid, signing the final documents, transfer of the property and public registration.

 

How much negotiation room is there at the indicated prices?

Due to the absence of a general MLS system showing the history and per sq ft price of a property it is much more difficult to come up with easy comparables like in the USA. Therefore it is even more important for you to work with a full time real estate professional who knows the inventory and comparables. Properties are usually sold as is or seen and we advice – even if the profession of a “home inspector” doesn’t exist like in the USA – to send a reputable contractor out to inspect before drafting the written offer through a notary.

The prices are not always as negotiable as back home and you have to be cautious and professional about it in order not to offend the seller. If the seller has the feeling that the buyer does not take his offer seriously he might reject any further negotiations. Here it is customary to conduct price negotiations only when there is a real intention to get to an agreement and you are well advised to let a professional do that work for you.

 

What are the purchase transaction costs for the buyer in Uruguay?

The total transaction costs are usually between 6-7% for the buyer. There is a 3% plus VAT (22%) Real Estate Agent fee to be paid by the buyer (=3.66%) and a buyers “Escribano” fee of usually 3% plus VAT (=3.66%) but we have special agreements with some Escribanos doing the work for our clients at 1.5% plus VAT. A deed registration stamp tax of 0.55%. A Registry and Tax Certificate stamp tax of approx. $200 and a property transfer tax of 2% of the fiscal value of the property. The fiscal value is normally substantially lower than the market value.

 

Do I have to be in the country to complete the purchase?

You don’t need to be in the country to close. Through a notarized “Power of Attorney” you can appoint someone you trust to handle the purchase for you. The cost of a notarized power of attorney is approx. US$400-450.

 

Does owning a property qualify me to obtain residency?

No, a prove of income is required not ownership of assets. Please see our page on Residenzia/Immigration.

 

Is there any Seller financing available?

Usually only short term up to 2 years at the prevailing interest rate and only if a seller agrees on it.

 

Is there any bank financing for non-residents available in Uruguay?

Hard to get and if no longer than 20 years. Only up to 50% of the property value at an interest rate of at least 5 to 6%.

 

Can you get title Insurance in Uruguay?

Yes, we work and can connect you with international companies who provide this service.

 

Are there any restrictions or taxes when transferring money?

No, no restriction on money in or out of the country (Repatriation of Capital). Foreign currency can be used: Euros, Dollars etc. No forced currency conversion. Banks offer accounts in US Dollars besides the local currency UY Pesos.

 

Can I buy into the health system?

Up to the age of 65 the admission is usually not a problem and the contributions are the same regardless of age at around 120 to 180 US$ per month. In general, the medical standard is quite high in Uruguay.

 

What is the average living cost in Uruguay?

On average about 70 % of the required cost of living in the US or Europe to maintain your lifestyle depending how close you get to the Punta Del Este area. In a supermarket in Punta Del Este on the coast you will spend double for groceries what you would pay inland in the same chain or a little grocery store.

Much cheaper than in the US or Europe is the medical care. A good all-round health plan offers a choice of different hospitals for a monthly fee 100 -120 US Dollars. In general, the medical standard is quite high in Uruguay.

For a 2 persons household you look at the following approx. monthly utility costs:

• Water: US$ 35.00

• Electricity: US$ 200.00

• Gas: US$ 15.00

• Internet: US$ 55.00

• Telephone Base charge: US$ 10.00

 

How do they calculate living space on property information?

In Uruguay there is no basis in this regard, which would correspond roughly to the living space standard in the USA. The calculations and details of the seller are very individual. It is often spoken of the entire “constructed” area, meaning that terraces, the garage, barbeque, deck and the pool area are included. Which makes it hard to compare house prices by “per square meter” price!

 

Can you help with the Immigration and Residenzia process?

Our agents are used to working with clients from all over the world and Ralph Haverkate is a US trained international CIPS broker who will be able to give clients valuable answers to many of their questions but if you need help with the paperwork and government applications and visits we work with a very efficient and knowledgeable local Immigration specialist together who speaks fluent English and German and will make your process very easy for a much lesser cost than what lawyers will charge you.

 

If we buy for pure investment can you help with renting out our property?

Yes, we do short and long term rentals for our client properties.