Purchase Process
Below is the standard purchase process in Uruguay and issues that may
affect a property purchase:
Property can be bought in Uruguay by foreigners without residence, as an
individual or company.
There is no differential treatment between foreigners and Uruguayans.
There is no restriction on the type of property a foreigner can acquire,
unless it is deemed to be important to national security.
The purchase process must involve a Notary Public.
Once the buyer selects a property and agrees to a price, the buyer's
Notary Public contacts the seller and drafts a "Boleta de Reserva" which
reserves the property, usually with a 10% deposit.
When that document is signed, the buyer's Notary Public then verifies the
good standing of the
property and drafts a purchase document, the "Escritura de Compraventa".
That document is signed, the property is transferred and the transaction
is recorded in the Public Registry.
Uruguay's laws and legal processes may be very different from what you are
used to and idasp.com.ar strongly recommends that independent legal advice be taken
during a property purchase.

Buy process in Uruguay

Step 1: Pre-Purchase Agreement
A boleto de reserva (pre-purchase agreement) is drawn up. This is a private document that establishes personal obligations between buyer, seller, and real estate agencies taking part in the deal. In it, several things are stated: price, delivery date, names of the people involved, condition of the property, real estate agent’s commission, etc. This is the most important legal document of the transaction because it lays out the rights and obligations of each party to the sale. Usually, 10% of the purchase price is left with the notary or with the real estate agent, and it is signed by both the buyer and seller.

Step 2: Notary
Once the boleto de reserva has been signed, the notary public continues the process. He receives the following documentation from the selling party: last copy of the title, blueprints, and tax receipts, with the understanding that the seller is obliged to hand over all documents pertaining to the property in question. The assigned notary must review and study the history of the property going back 30 years. This is done covering different aspects, such as trusts or other corporations if they exist, previous purchase-sale transactions, payment of taxes, and compliance to building codes.

Step 3: Notary Verifies Documents

The notary requests different entities to extend certificates going back 30 years in relationship with the property and to the various owners as well as the land-surveying office. He also verifies the current property status from all related public offices.

Step 4: Registration of Documents
Two to three days prior to the signing, the notary coordinates between all parties (seller, buyer, real estate agents, and third parties involved) at a designated time, and at the same time the documents are registered at the property registry. By doing so, the mechanism of priority reservation is put in motion allowing for a 30-day period in which the property is “blocked” from any legal proceedings. In this time, the notary must write the deed, pay the taxes corresponding to the transaction, and register the first copy of the deed at the registrar’s office.

Step 5: The Deed Is Authorized
The deed is then authorized and granted.

Step 6: Payment
The notary acts as the agent withholder of taxes and makes payments before the government’s revenue office of the corresponding tax to real estate transactions (2% of the officially registered value, usually much lower than the real value, due by each party). The buyer and seller each pay this 2% fee.

Step 7: Deed Is Recorded
The first copy of the deed is then recorded at the property registry.

Step 8: Deed Is Granted
To finalize the transaction, an original as well as a registered copy of the deed and all other documents (blueprints, tax receipts, etc.) for the last 30 years, provided by the notary, are given to the buyer. An intermediate contract between the boleto de reserva and the deed can be drawn. This is the promissory deed. It is a contract that is also given before a notary public and holds the power of the deed. It is used when a legal element is missing to grant the deed. At the same time, if the promissory deed is signed and recorded, in the event of the death of seller, bankruptcy, seizure, or the seller’s refusal to sign the final deed, the judge can order to have the promissory deed recorded and, in accordance with the law 8.733, will grant the final deed.

Investment Costs
The costs of a standard property purchase in Uruguay may include the
following:
Notary public's fee is 3%.
There are deed registration and stamp duty fees which vary, depending on
the price of the property.
Buyer and seller each pay a property transfer tax of 2% of fiscal value of
property (usually lower than market value).
VAT does not apply to the transfer of real property.
Capital gains earned by individuals are subject to capital gains tax of
12%. (Capital gains earned by companies through selling real estate properties
are treated as ordinary income.)
Rental income tax on net rental income from leasing property is taxed at 12%.
Uruguay's taxation system is complex and subject to change. You are therefore
recommended to take expert and up-to-date advice on taxation issues affecting
the purchase and ownership of property in Uruguay.