Guatemala New Tax environment for foreigners investing in Real Estate

In Fevruary 2012 the government of Guatemala voted new tax laws making some substancial changes that will affect any real estate decision to be made.
According the art 97 of the tax income book 1 called : " ley de Actualizacion Tributaria" Decreto # 10-2012, and for the first time, are considered in the concept of generation act of income the tax contribution for non resident with or without a permanent situation on the Guatemalan territory.
Let's consider the non-resident without a permanent installation, for example, you bought a house here but you don't live in Guatemala and are not a legal resident neither, just under a tourist visa. Now you are require by law to pay tax for each income generated without compensation.
For the first time in Guatemala, in the tax doctrine is included the theory of Patrimony increment. According to the art. 84 numeral 3) of the new income tax law will be gain or loss of capital.:

  1. the ones resulting form any kind of transfer , sell, buy, permutation or any other forms of negotiacion of goods or rights.
  2.  the reevaluation of the value of real estate, by tax payer
The tax obligation is due at the moment where there is a variation in the patrimony of the tax payer.
The tax rate is 10%..This new set of laws will for sure make real estate property transaction more costly as well for the buyer as for the seller. And when inquiring to buy a property it is important to get the exact price you will be exposed to pay as the new closing cost will increase also sometimes significantly . It is fundamental to get a good assessment with  the help of a professional realtor.
And in certain cases with the help of finance specialist when we are dealing with expensive property.
More soon...

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