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Everything you need to know before buying real estate is included in our Guatemala Property Pack
Property taxes in Guatemala are significantly lower than most countries, with rates ranging from 0.2% to 0.9% based on the government-assessed cadastral value. Understanding Guatemala's property tax system is crucial for anyone considering real estate investment in this Central American nation, as the total cost of ownership extends beyond the purchase price to include annual taxes, transfer fees, and potential rental income taxes.
If you want to go deeper, you can check our pack of documents related to the real estate market in Guatemala, based on reliable facts and data, not opinions or rumors.
Guatemala charges property tax (IUSI) annually at rates of 0.2% to 0.9% based on cadastral value, with most $100,000 USD homes paying around $900 yearly.
Transfer taxes range from 3% for resale properties to 12% for new constructions, plus additional legal and registration fees of approximately 1.15%.
| Tax/Fee Type | Rate/Amount | Based On |
|---|---|---|
| Annual Property Tax (IUSI) | 0.2% - 0.9% | Cadastral Value |
| Transfer Tax (Resale) | 3% | Property Value |
| Transfer Tax (New) | 12% (VAT) | Property Value |
| Registration Fee | 0.15% | Property Value |
| Legal & Notary Fees | ~1% | Property Value |
| Rental Income Tax | 25% | Net Rental Income |
| Exchange Rate (Sep 2025) | 1 GTQ = 0.1303 USD | Current Market |
What is the percentage of property tax you pay each year in Guatemala?
Guatemala's annual property tax, called Impuesto Ăšnico Sobre Inmuebles (IUSI), uses a progressive rate structure based on the property's cadastral value.
The tax rates are structured in three tiers: properties valued up to Q2,000 are completely exempt from tax, properties valued between Q2,000 and Q20,000 pay Q2 per thousand (0.2%), properties valued between Q20,000 and Q70,000 pay Q6 per thousand (0.6%), and properties valued over Q70,000 pay Q9 per thousand (0.9%).
For most residential properties that foreign investors purchase, the highest rate of 0.9% applies since their cadastral values typically exceed Q70,000. This makes Guatemala's property tax rates among the lowest in Central America, significantly cheaper than countries like Costa Rica or Panama where rates can reach 1.5% or higher.
The progressive structure means that only the portion of value within each bracket is taxed at that bracket's rate, similar to income tax brackets in most countries.
How is the property tax calculated — is it based on the purchase price, market value, or assessed value?
Guatemala's property tax is calculated based on the cadastral value, which is the government's official assessed value of the property, not the purchase price or current market value.
The cadastral value is typically significantly lower than both the purchase price and market value, often ranging from 50% to 80% of the actual market value. This assessment is conducted by municipal authorities and recorded in official property registries. The cadastral value considers factors like location, size, construction quality, and age of the property, but these assessments often lag behind rapid market appreciation.
For example, if you purchase a property for $150,000 USD, the cadastral value might be assessed at only $100,000 USD equivalent in quetzales, meaning your annual tax would be calculated on the lower amount. This system generally benefits property owners by keeping their annual tax burden lower than it would be in countries that tax based on market value.
It's something we develop in our Guatemala property pack.
What is the current exchange rate from Guatemalan quetzales to US dollars so I can estimate in my own currency?
As of September 2025, the exchange rate is approximately 1 Guatemalan quetzal (GTQ) equals 0.1303 US dollars (USD).
This means that 1 USD equals approximately 7.67 GTQ, making it relatively straightforward to convert property values and tax amounts. The quetzal has remained relatively stable against the dollar over the past few years, typically fluctuating between 7.5 and 8.0 quetzales per dollar.
For practical calculations, many investors use a rough conversion of 8 quetzales per dollar for conservative budgeting purposes. When calculating your annual property tax, you'll first need to convert your property's cadastral value from quetzales to dollars, apply the appropriate tax rate, then convert the resulting tax amount back to dollars.
Exchange rates can fluctuate daily, so it's advisable to check current rates when making actual tax payments or budgeting for property expenses.
Are there different tax rates for urban and rural properties, and if so, what are they?
No, Guatemala does not have different property tax rates for urban versus rural properties.
The same IUSI tax rate structure applies uniformly across all property types and locations within Guatemala, whether your property is in downtown Guatemala City, rural farmland, or a beachfront home on the Pacific coast. The only factor that determines your tax rate is the cadastral value of the property, not its geographic classification.
However, rural properties often have significantly lower cadastral values due to lower land prices and simpler construction, which naturally results in lower annual tax payments. A rural farmhouse might have a cadastral value of Q30,000, resulting in a blended tax rate much lower than the maximum 0.9%, while an urban property in Guatemala City's Zone 10 might have a cadastral value of Q500,000, putting it firmly in the highest tax bracket.
Some municipalities may charge different fees for municipal services, but these are separate from the national property tax and are generally minimal.
What is the average annual property tax amount for a $100,000 USD home in Guatemala?
For a $100,000 USD home in Guatemala, you can expect to pay approximately $900 per year in property tax, though the actual amount depends on the cadastral value assessment.
Using the current exchange rate of 7.67 GTQ per USD, a $100,000 property equals Q767,000. If the cadastral value is assessed at the full purchase price (which is often higher than typical), the annual tax would be Q767,000 Ă— 0.9% = Q6,903, which converts to approximately $900 USD annually.
However, cadastral values are typically 60-80% of market value, so your actual tax could be significantly lower. If the cadastral value is assessed at $70,000 USD equivalent (Q536,900), your annual tax would be approximately $630. Many property owners find their actual tax bills fall between $600-900 annually for a $100,000 property.
This represents excellent value compared to other countries—the same property might incur $2,000-4,000 annually in property taxes in the United States or Europe.
| Property Value (USD) | Cadastral Value (Assumed %) | Annual Tax (GTQ) | Annual Tax (USD) |
|---|---|---|---|
| $100,000 | 60% ($60,000) | Q4,140 | $540 |
| $100,000 | 70% ($70,000) | Q4,830 | $630 |
| $100,000 | 80% ($80,000) | Q5,520 | $720 |
| $100,000 | 90% ($90,000) | Q6,210 | $810 |
| $100,000 | 100% ($100,000) | Q6,900 | $900 |
How often is the property's taxable value reassessed, and can it go up significantly over time?
Property reassessments in Guatemala occur periodically but not on a fixed schedule, with frequency varying by municipality and typically happening every 5-10 years.
Most municipalities conduct reassessments when there are significant improvements to the property, major infrastructure developments in the area, or during citywide revaluation projects. Unlike countries with automatic annual increases, Guatemala's system provides more predictability for long-term property owners.
Reassessment increases are generally moderate, typically reflecting actual improvements rather than speculative market appreciation. A property might see its cadastral value increase by 20-40% during a reassessment if significant neighborhood development has occurred, but dramatic jumps are uncommon. The government tends to be conservative in reassessments to maintain the system's stability and affordability.
Property owners receive notification before reassessments take effect and have the right to appeal valuations they consider excessive. The appeal process is relatively straightforward and often results in reasonable adjustments when property owners can demonstrate comparable values.
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Are there any registration or transfer taxes when buying a property, and how much are they?
Yes, Guatemala imposes several taxes and fees during property purchases that significantly impact your total acquisition cost.
The registration fee is 0.15% of the property value, paid to register the property transfer in official records. Transfer taxes vary dramatically based on whether you're buying new construction or a resale property: resale properties incur a 3% stamp tax, while new properties are subject to 12% VAT (Impuesto al Valor Agregado).
Additional mandatory costs include legal and notary fees, typically around 1% of the property value, covering document preparation, title verification, and closing procedures. These fees are essential as Guatemala requires notarial involvement in all property transfers, and the notary assumes legal responsibility for the transaction's validity.
For a $100,000 resale property, total transfer costs would be approximately $4,150 ($3,000 stamp tax + $150 registration + $1,000 legal fees). For new construction, costs jump to $13,150 due to the 12% VAT requirement. It's something we develop in our Guatemala property pack.
What are the notary and legal fees for the property purchase, in percentage or fixed amounts?
Notary and legal fees in Guatemala typically cost approximately 1% of the property value, though this can vary based on property complexity and location.
These fees cover comprehensive services including title research, document preparation, property verification, closing coordination, and post-sale registration. The notary in Guatemala has significantly more responsibility than in many countries, essentially acting as both attorney and public official to ensure transaction legality.
For a standard residential purchase, fees might break down as follows: notary fee (0.5-0.7% of property value), attorney fee for additional legal services (0.3-0.5% of property value), and various administrative costs. Complex transactions involving multiple parties, financing, or title issues may increase these costs to 1.2-1.5% of property value.
Most reputable law firms provide fixed-fee quotes after reviewing the specific property and transaction details, helping buyers budget accurately. These fees are typically paid at closing and are considered essential investments in ensuring clean title transfer and legal protection.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Guatemala 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.
Are there any municipal or local taxes in addition to the national property tax, and how much do they usually cost per year?
Guatemala does not impose separate municipal property taxes in addition to the national IUSI tax, as the IUSI is collected by municipalities on behalf of the national government.
However, some municipalities charge modest annual fees for specific local services such as garbage collection, street maintenance, or security services. These fees are typically very low, ranging from Q50 to Q300 ($6.50 to $39 USD) annually for residential properties, depending on the municipality and services provided.
Upscale areas or gated communities might have additional homeowners association fees, but these are private arrangements rather than government taxes. Some municipalities also charge one-time connection fees for utilities or permits, but ongoing municipal charges beyond the IUSI are minimal.
Overall, property owners can expect total annual government-related costs to remain very close to just the IUSI tax amount, making Guatemala's property ownership costs highly predictable and affordable compared to many other countries where multiple layers of local taxation can significantly increase the burden.
If you rent out the property, what is the income tax rate on rental income in Guatemala?
Non-resident property owners in Guatemala pay 25% income tax on net rental income, while residents can choose between two tax regimes with potentially lower rates.
For non-residents, the 25% rate applies to net rental income after deducting allowable expenses such as property management fees, maintenance costs, repairs, and the annual property tax. This rate is relatively high compared to some neighboring countries but is straightforward to calculate and administer.
Guatemalan residents can elect either the same 25% rate on net income or a simplified 5% rate on gross rental income without deductions. For properties with high maintenance costs, the net income option is usually more favorable, while properties with minimal expenses might benefit from the gross income option.
Rental income must be reported annually, and taxes are typically paid quarterly. Property management companies often handle tax compliance for foreign owners, charging additional fees for this service but ensuring proper reporting and payment to avoid penalties.
Are there any tax exemptions or reductions for foreign buyers, retirees, or first-time homeowners?
Guatemala does not currently offer special tax exemptions or reductions for foreign buyers, retirees, or first-time homeowners as of September 2025.
The country treats all property owners equally under its tax system regardless of nationality, age, or previous ownership status. This approach differs from some Central American neighbors that offer pensionado programs or foreign investment incentives with tax benefits.
However, Guatemala's uniformly low property tax rates effectively serve as a broad-based incentive for all property ownership. Some limited exemptions exist for specific affordable housing programs or agricultural development projects, but these are rare and typically don't apply to typical residential purchases by foreign investors.
While tax breaks aren't available, Guatemala's combination of low property taxes, reasonable transfer costs for resale properties, and stable currency make it attractive for international property investment without requiring special incentive programs. It's something we develop in our Guatemala property pack.
What happens if you don't pay your property tax — are there late fees or penalties, and how high are they?
Failure to pay property tax in Guatemala results in escalating penalties, interest charges, and potential legal action including property liens or seizure.
Late payment penalties typically begin at 2-5% of the unpaid tax amount for the first month, with additional monthly penalties of 1-2% continuing to accrue. Interest charges compound monthly, potentially doubling or tripling the original tax debt within a few years of non-payment.
After extended non-payment periods (typically 2-3 years), municipalities can place liens on properties and eventually initiate seizure proceedings. The government has the authority to auction delinquent properties to recover unpaid taxes, though this process usually takes several years and includes multiple notification requirements.
Property owners facing financial difficulties can often negotiate payment plans with municipal authorities, especially if they demonstrate good faith efforts to resolve the debt. Given the relatively low annual tax amounts, most property owners find it far more cost-effective to maintain current payments rather than risk the compounding penalties and potential loss of property.
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.
Guatemala's property tax system offers excellent value for international investors, with annual costs typically under 1% of property value.
While transfer taxes can be significant for new construction, the ongoing ownership costs remain among the lowest in Central America, making Guatemala an attractive long-term investment destination.