Can foreigners buy property in Montevideo?

Authored by the expert who managed and guided the team behind the Uruguay Property Pack

Yes, the analysis of Montevideo's property market is included in our pack

Who is the author of this content?

THE LATINVESTOR

A team specialized in real estate investing in LATAM countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Montevideo. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At The LatinVestor, we explore the Uruguayan real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Montevideo, Punta del Este, and Colonia del Sacramento. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Can foreigners legally buy property in Montevideo or across Uruguay, and are there any restrictions compared to locals?

Foreigners can legally buy property anywhere in Uruguay with exactly the same rights as Uruguayan citizens.

The Uruguayan government treats all foreign buyers equally, regardless of nationality. You have full ownership rights to houses, apartments, commercial properties, and land including beachfront properties. The only restriction applies to agricultural land purchases over 500 hectares, which must be reported to the Instituto Nacional de Colonización (INC), though the purchase itself remains unrestricted for individuals.

Companies purchasing farmland must maintain transparent individual shareholders, and government or sovereign wealth funds require special approval for large agricultural investments. These restrictions don't affect typical residential or commercial property purchases in Montevideo.

As of September 2025, Uruguay maintains one of the most liberal property ownership policies for foreigners in South America, with no caps on foreign ownership or requirements for local partnerships.

Are there differences in property rights depending on nationality, or is treatment the same for all foreigners?

All foreigners receive identical treatment regardless of their nationality when buying property in Uruguay.

Whether you're from the United States, Germany, Brazil, China, or any other country, you'll face the same legal process, costs, and rights. The Uruguayan legal system doesn't differentiate between nationalities for property ownership purposes.

Your property rights include the ability to rent out the property, sell it at any time, pass it on through inheritance, and use it as collateral for loans. These rights are constitutionally protected and apply equally to all property owners.

It's worth noting that certain bilateral treaties between Uruguay and specific countries may provide additional protections for investments, but the baseline property rights remain consistent for all foreign buyers.

Do you need to have residency or a specific visa to buy property, or can you do it as a tourist?

You can buy property in Uruguay as a tourist without any residency requirements or special visas.

Uruguay allows property purchases by visitors on tourist visas, temporary residents, permanent residents, and non-residents alike. You don't need to establish any form of legal residence before making your purchase.

While buying property doesn't automatically grant you residency rights, it can support applications for Uruguayan residency or tax residency if you choose to pursue them later. Many buyers use their property ownership as part of their eventual residency applications.

The only requirement is obtaining a Uruguayan Tax Identification Number (RUT) during the purchase process, which is a simple administrative step that doesn't require residency status.

Is it necessary to be physically present in Uruguay to complete the purchase, or can it be done remotely with a representative?

You can complete the entire property purchase remotely without ever visiting Uruguay.

The key to remote purchasing is establishing a properly executed Power of Attorney that allows a local representative (typically a lawyer) to act on your behalf. This document must be notarized in your home country and carry an apostille stamp to be recognized in Uruguay.

Your representative will handle property searches, negotiations, due diligence, contract signing, and even the final deed registration. Many international buyers successfully purchase properties this way, particularly those buying investment properties or planning future relocations.

It's something we develop in our Uruguay property pack.

However, visiting in person allows you to inspect properties firsthand and build relationships with local professionals, which many buyers find valuable for future transactions.

What is the exact step-by-step process to buy property in Montevideo, and which documents are required?

The property buying process in Montevideo follows a structured seven-step procedure overseen by a public notary.

Step	Action Required	Timeline
1. Property Search	Engage licensed real estate agent, view properties	2-8 weeks
2. Reservation Agreement	Sign Boleto de Reserva, pay 10% deposit to notary escrow	1 day
3. Tax ID Application	Obtain Uruguayan RUT (Tax Identification Number)	1-2 weeks
4. Due Diligence	Notary verifies title, debts, municipal compliance	2-4 weeks
5. Promise to Purchase	Sign detailed purchase agreement (if required)	1 week
6. Final Deed	Sign Escritura de Compraventa, complete payment	1 day
7. Registration	Submit deed to National Real Estate Registry	1-2 weeks

Required documents include your passport, Uruguayan Tax ID, proof of funds for anti-money laundering compliance, and if buying remotely, a properly apostilled Power of Attorney. The notary will also require property-specific documents like the title deed, certificates of no debt, energy certificates, property surveys, and municipal compliance certificates.

Is hiring a lawyer or notary mandatory, and what role do they play in the transaction?

Hiring a public notary (Escribano Público) is mandatory for all real estate transactions in Uruguay, while a private lawyer is optional but highly recommended.

The public notary serves as the official overseer of your transaction, conducting legal due diligence to verify the property title, checking for outstanding debts or liens, ensuring municipal and environmental compliance, and holding your deposit in escrow. They prepare all contracts, coordinate with government registries, and officially register your ownership.

A private lawyer protects your specific interests, reviews contracts before signing, advises on tax implications, handles negotiations, and ensures you understand all terms. This is particularly valuable for non-Spanish speakers or complex transactions.

Notary fees typically cost 3-4% of the property value, while private lawyer fees range from $1,500-$5,000 depending on the transaction complexity. Many buyers find the additional legal representation worth the cost for the peace of mind and protection it provides.

What taxes, fees, and additional costs are involved when purchasing, owning, and eventually reselling property?

Total transaction costs typically range from 6-8% of the property purchase price in Montevideo.

Purchase costs include a 2% transfer tax (ITP) on the property value, 3-4% in notary and legal fees, 0.5-1% for registration and title fees, and 3-4% in real estate agent commissions (often split between buyer and seller). Additional certificates and legal documents cost approximately $600-$800.

Ongoing ownership costs include annual property taxes (Contribución Inmobiliaria) based on the assessed property value, municipal fees for services like waste collection and street maintenance, and building maintenance fees for apartment buildings.

When selling, you'll pay capital gains tax at 12% of the net profit, plus similar transaction costs as when buying. Rental income is taxed at 12% for non-residents after allowable deductions including property management, maintenance, and depreciation.

Are mortgages available to foreigners, what are the usual rates and conditions, and what tips help in getting approved?

Mortgages are available to foreigners but primarily for those with Uruguayan residency and established local banking relationships.

Current mortgage rates range from 6-10% annually, with terms typically extending 15-20 years and maximum loan-to-value ratios of 70-80%. Banks require extensive documentation including proof of stable income, Uruguayan tax returns, local bank account history, and property appraisals.

Non-resident foreigners face significant challenges securing financing, with most banks requiring residency status and substantial local income verification. Processing times can extend 2-3 months with strict approval criteria.

Most foreign buyers choose cash purchases to avoid financing complications and strengthen their negotiating position. Those seeking financing should establish residency, open local bank accounts, and maintain a financial relationship with Uruguayan banks for at least 12-24 months before applying.

It's something we develop in our Uruguay property pack.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Uruguay versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What are the fiscal implications for foreigners, including rental income tax, capital gains, and double taxation issues?

Foreign property owners face specific tax obligations in Uruguay that vary based on residency status and property use.

Non-resident foreigners pay a flat 12% tax rate on net rental income after allowable deductions including property management fees, maintenance costs, insurance, and depreciation. Resident foreigners pay progressive income tax rates on rental income integrated with their total income.

Capital gains tax applies at 12% of the net profit when selling property, calculated from the purchase price plus improvement costs minus selling expenses. Properties held longer than four years may qualify for reduced rates in some circumstances.

Uruguay has signed double taxation treaties with over 20 countries including Germany, Spain, and several Latin American nations, potentially reducing your total tax burden. However, you must actively claim treaty benefits and may need to pay taxes in both countries initially before receiving credits.

Annual property taxes vary by location and property value, typically ranging from 0.25% to 1.4% of assessed value. Consult with a qualified tax advisor familiar with both Uruguayan tax law and your home country's tax obligations to optimize your tax strategy.

Which areas in Montevideo and nearby are most popular with foreigners, and where are the best prospects for living, renting out, or capital appreciation?

Pocitos, Carrasco, and Punta Carretas represent the most popular neighborhoods among foreign buyers in Montevideo.

Pocitos offers beachfront living with modern apartment buildings, excellent restaurants, and strong rental demand from both locals and expats. Properties here typically yield 4-6% gross rental returns with steady capital appreciation due to limited beachfront inventory.

Carrasco appeals to luxury buyers with its upscale residential character, proximity to the international airport, and high-end shopping. This area shows the strongest capital appreciation potential but lower rental yields around 3-5% due to higher property values.

Punta Carretas combines historic charm with modern amenities, featuring the famous shopping center and excellent connectivity. It offers balanced investment potential with 5-7% rental yields and moderate capital appreciation.

Outside Montevideo, Punta del Este and surrounding coastal areas attract international buyers seeking resort properties with strong seasonal rental potential, while Colonia del Sacramento appeals to those wanting historic charm and easy access to Argentina.

What do the latest figures say about liveability, gross rental yields, rental income potential, tourism numbers, and future growth forecasts?

Montevideo consistently ranks as one of South America's most liveable cities with strong metrics across safety, infrastructure, and quality of life indicators.

As of September 2025, gross rental yields in prime Montevideo neighborhoods range from 4-7% annually, with Pocitos averaging 5.5%, Punta Carretas at 6%, and Carrasco at 4.2%. These yields compare favorably to other regional capitals like Buenos Aires (3-5%) or Santiago (3-4%).

Uruguay's tourism sector reached record levels in 2024 with over 3.8 million visitors, driving strong short-term rental demand in Montevideo and coastal areas. The city benefits from year-round tourism due to its cultural attractions and business travel, supporting consistent rental income.

Property price growth in Montevideo has averaged 4-6% annually over the past five years, outpacing inflation and providing real returns for investors. Future growth prospects remain positive due to Uruguay's political stability, growing expat community, and limited prime real estate inventory in desirable neighborhoods.

It's something we develop in our Uruguay property pack.

What are the most common mistakes and pitfalls foreigners face when buying property in Montevideo, and how can they be avoided?

Foreign buyers commonly encounter five critical pitfalls that can be easily avoided with proper preparation and professional guidance.1. **Inadequate Due Diligence**: Failing to thoroughly verify property titles, outstanding debts, or legal encumbrances. Always insist your notary conducts comprehensive due diligence and provides written confirmation of clear title.2. **Underestimating Total Costs**: Many buyers budget only for the purchase price without considering the 6-8% in additional transaction costs. Create a comprehensive budget including all fees, taxes, and legal expenses before making offers.3. **Using Unqualified Professionals**: Selecting inexperienced notaries or real estate agents can lead to legal problems and financial losses. Verify professional licenses and seek recommendations from other foreign buyers or expat communities.4. **Expecting Easy Financing**: Assuming mortgage financing will be readily available as a non-resident. Plan for cash purchases or establish residency and banking relationships well before buying.5. **Overlooking Ongoing Costs**: Failing to budget for annual property taxes, municipal fees, building maintenance, and management costs. These can add 1-3% annually to your ownership costs and should be factored into investment calculations.

To avoid these pitfalls, always work with licensed professionals, conduct independent property inspections, get all agreements in writing with clear terms, and maintain detailed records of all transactions and communications.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Real Estate in Uruguay - Best Areas to Buy Property
2. The LatinVestor - Uruguay Real Estate Foreigner Tips
3. La Cite Uruguay - What You Need to Know When Buying Property
4. The LatinVestor - Buy Land Uruguay
5. The LatinVestor - Moving Uruguay Buy Property
6. Life Abroad Hero - Uruguay Real Estate Guide
7. Golden Harbors - Uruguay Residency
8. La Cite Uruguay - Ultimate Guide to Buying Property