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Understanding the complete tax structure for owning an apartment in Montevideo is crucial for making informed investment decisions. Property taxes in Uruguay's capital are generally considered reasonable compared to other South American cities, but the various fees and obligations can add up significantly over time.
If you want to go deeper, you can check our pack of documents related to the real estate market in Uruguay, based on reliable facts and data, not opinions or rumors.
Property taxes in Montevideo range from 0.25% to 1.4% of the cadastral value, with most residential apartments taxed at approximately 1%.
For a USD 100,000 apartment, expect annual ownership costs between USD 3,000-3,600, including property taxes, municipal fees, and potential rental income taxes.
| Tax/Fee Type | Rate/Amount | Annual Cost (USD 100k apartment) |
|---|---|---|
| Property Tax | 0.25-1.4% of cadastral value | USD 500 |
| Transfer Tax (Purchase) | 2% of cadastral value | USD 1,000 (one-time) |
| Notary & Registration | ≈4% of purchase price | USD 4,160 (one-time) |
| Rental Income Tax | 12% of gross rent | USD 600 |
| Capital Gains Tax | 12% of net gain | Varies on sale |
| HOA/Municipal Fees | USD 50-300/month | USD 1,000-1,200 |
| Total Annual (if rented) | - | USD 3,600 |
What is the annual property tax rate for residential apartments in Montevideo?
The annual property tax rate for residential apartments in Montevideo ranges from 0.25% to 1.4% of the property's cadastral value.
Most typical residential apartments in the city fall closer to the 1% rate. This tax is called "Contribución Inmobiliaria" and is one of the primary ongoing costs of property ownership in Uruguay.
The rate varies depending on the property's location, size, and characteristics, but for standard apartments in central Montevideo, you can expect to pay approximately 1% of the cadastral value annually.
As of September 2025, these rates remain competitive compared to other major South American cities.
How does the cadastral value compare to the market value of apartments?
The cadastral value is substantially lower than the actual market value of apartments in Montevideo.
Typically, the cadastral value represents only 40-60% of the true market value. This system benefits property owners as taxes are calculated on the lower cadastral assessment rather than current market prices.
For example, if you purchase an apartment for USD 100,000 at market value, the cadastral value might be assessed at USD 40,000 to USD 60,000. The government periodically updates these values, but they generally lag behind market appreciation.
This gap between cadastral and market values is intentional and helps keep property taxes more affordable for residents and investors.
What is the actual annual property tax amount for a USD 100,000 apartment?
For a USD 100,000 apartment in Montevideo, the annual property tax typically amounts to approximately USD 500.
This calculation assumes a cadastral value of USD 50,000 (50% of market value) and a 1% tax rate. The formula is: USD 50,000 × 1% = USD 500 annually.
In Uruguayan pesos, at the current exchange rate of approximately 1 USD = 39 UYU, this equals about UYU 19,500 per year. The exact amount may vary slightly based on the specific cadastral assessment and any municipal adjustments.
It's something we develop in our Uruguay property pack.
How often do you pay property tax and what is the payment schedule?
Property tax in Montevideo is paid annually but divided into installments throughout the year.
Most property owners pay in 3 to 6 installments, depending on the municipality's schedule and the property owner's preference. For a USD 500 annual tax with 6 installments, each payment would be approximately USD 83 (about UYU 3,250).
The installments are typically spread evenly across the year, making it easier for property owners to manage cash flow. You can also choose to pay the full amount at once if you prefer, sometimes with a small discount.
Payment deadlines are strictly enforced, and late payments incur penalties and interest charges.
What additional municipal fees apply beyond property tax?
Beyond property tax, apartment owners in Montevideo face several additional monthly fees.
Building maintenance fees (HOA fees) range from USD 50-100 for older apartments and USD 150-300 for modern towers with amenities. Waste collection is usually included in municipal services but budget approximately USD 8-15 per month as part of total building fees.
Other potential fees include building security, elevator maintenance, common area utilities, and building insurance contributions. These vary significantly based on the building's age, location, and amenities.
For a typical apartment building in Montevideo, expect total monthly fees between USD 100-200 beyond your property tax obligations.
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What is the transfer tax when purchasing an apartment?
The transfer tax (Impuesto a las Transmisiones Patrimoniales or ITP) is 2% of the cadastral value, paid by both buyer and seller.
For a property with a cadastral value of USD 50,000, the buyer pays USD 1,000 in transfer tax. The seller also pays the same amount, making the total transfer tax burden 4% of the cadastral value.
This tax is due at the time of purchase and must be paid before the property transfer can be completed. It's calculated on the cadastral value, not the purchase price, which helps reduce the tax burden.
The transfer tax is a one-time cost that should be factored into your initial purchase budget.
How much are notary and registration costs for apartment purchases?
Notary and registration costs typically total approximately 4% of the purchase price for apartment transactions in Montevideo.
Notary fees are usually 3% of the purchase price plus VAT (22%), resulting in 3.66% total. Registration fees and stamps add approximately 0.5% of the purchase price.
For a USD 100,000 apartment, expect notary costs of USD 3,660 and registration fees of USD 500, totaling USD 4,160. These are mandatory costs that cannot be avoided when purchasing property.
These fees cover the legal work required to transfer ownership, register the property, and ensure all documentation is properly filed with government authorities.
What are the rental income tax obligations for apartment owners?
Rental income from apartments in Montevideo is subject to a flat 12% tax rate on gross rental income.
For a USD 100,000 apartment generating typical rental yields of around 5% annually (USD 5,000 per year), the annual income tax would be USD 600. Some deductions may be available for maintenance and improvements.
This tax applies to both resident and non-resident property owners, though residents may have access to additional deductions. The tax must be paid quarterly or annually, depending on your total income level.
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.
Do vacant apartments still require tax payments?
Yes, vacant apartments still require annual property tax payments and municipal fees, but no income tax obligations.
Property tax and building maintenance fees are due regardless of whether the apartment is occupied or generating rental income. You cannot avoid these costs simply by leaving the property empty.
While some proposals have been considered for additional taxes on vacant properties, these are not currently enforced in Montevideo as of September 2025.
Keeping an apartment vacant means you miss rental income while still paying all ownership costs, making it financially inefficient for most investors.
What is the capital gains tax when selling an apartment?
Capital gains tax on apartment sales in Montevideo is a flat 12% rate on the net gain from the transaction.
The tax is calculated on the difference between the selling price and the acquisition cost, with allowable deductions for improvements and transaction costs. For example, if you bought for USD 80,000 and sell for USD 100,000, the net gain is USD 20,000, resulting in USD 2,400 in capital gains tax.
This tax applies to both residents and non-residents, though some minor differences in deductions may apply. The tax is due within 30 days of the sale completion.
Documentation of all improvements and costs should be maintained to minimize the taxable gain when selling.
Are there exemptions or reductions for first-time buyers or primary residences?
Uruguay does not offer significant exemptions or reductions for first-time buyers or primary residences in Montevideo.
Unlike many countries, there are no major property tax breaks for first-time purchasers or owner-occupants. Some limited exemptions exist for social housing programs, but these are not generally applicable to typical apartment buyers in the market.
The tax structure treats all residential property owners equally, regardless of whether it's their first purchase or primary residence. This means foreign investors and local buyers face the same tax obligations.
However, the generally low tax rates partially compensate for the lack of specific exemptions.
What is the total annual tax and fee burden for owning a USD 100,000 apartment?
The total annual cost of owning a USD 100,000 apartment in Montevideo ranges from USD 3,000 to USD 3,600, depending on rental status.
| Cost Category | Annual Amount (USD) | Notes |
|---|---|---|
| Property Tax | 500 | 1% of cadastral value |
| Building/HOA Fees | 1,000 | Varies by building type |
| Waste Collection | 100 | Usually included in municipal fees |
| Home Insurance | 500 | Recommended coverage |
| Income Tax (if rented) | 600 | 12% of gross rental income |
| Maintenance & Repairs | 1,000 | Average annual estimate |
| Total (if rented) | 3,600 | Includes all costs |
| Total (if vacant) | 3,000 | Excludes income tax |
One-time purchase costs include transfer tax (USD 1,000), notary and registration (USD 4,160), and agency fees (USD 3,000-4,000).
It's something we develop in our Uruguay property pack.
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.
Montevideo's property tax structure remains competitive within South America, making it an attractive destination for real estate investment.
The combination of low property taxes, reasonable transfer costs, and straightforward income tax obligations creates a transparent ownership environment for both local and international investors.
Sources
- Guruguay - Property Taxes in Uruguay
- La Cite Uruguay - Property Taxes Guide
- The Latinvestor - Montevideo Property
- Real Estate in Uruguay - Transaction Costs
- ESales International - Uruguay Property Investment
- Global Property Guide - Uruguay Taxes
- PwC Tax Summaries - Uruguay
- The Latinvestor - Uruguay Real Estate Tips