Taxes ·
Selling property in Paraguay: the notary withholds 2.4% of the price
When an individual sells real estate, the notary withholds the tax at closing: 8% on 30% of the transaction value, which works out to 2.4% of the price.
Under the tax authority's General Resolution No. 42/2020 (DNIT), the notary public acts as the withholding agent for the Personal Income Tax on Income and Capital Gains (IRP-RGC) when a resident individual transfers real estate, whether by sale, exchange, payment in kind or paid assignment of rights. The withholding is made at the deed signing and covers the full tax.
The calculation uses 30% of the total transaction value as the base and applies the 8% rate set by Law 6380/2019. The result is an effective withholding of 2.4% of the price. DNIT also allows taxing the actual gain, after deducting the acquisition cost, and sets separate rules for companies, land subdivisions and installment sales.
What it means for investors
For sellers, this withholding comes out of the money they actually receive. That is why it helps to set the asking price starting from the amount you want to receive and add the transaction costs, instead of finding them out on closing day.
Each case can have nuances, depending on who sells and how the sale is paid. If you are considering selling or buying in Paraguay, let us talk it through and review it with your notary or an accountant before deciding.
Source
Official sourceDNIT — Resolución General N.º 42/2020 (retención de escribanos públicos), published March 9, 2020.
Read the original source (in Spanish)Also consulted
Notice
- An informational summary prepared by FCGRE from the sources cited. It is not legal, immigration, accounting, tax or investment advice and does not guarantee any outcome. Information may change: always check the official source.
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