Published on and written by Cyril Jarnias
Buying, building, leasing, or simply holding real estate in Peru is not just a matter of price per square meter. Behind every transaction lies a dense legal architecture, blending civil law, taxation, urban planning, environment, cultural heritage, and special regimes for foreigners. Understanding this framework has become essential, as much for a foreign investor as for a local developer or an individual looking to secure their assets.
A Fragmented but Structured Legal Framework
Peruvian real estate law is not codified in a single, comprehensive statute. It is based on a set of interlocking texts, starting with the 1984 Civil Code, which sets the general rules for property, contracts, and liability. Alongside it, several sectoral laws regulate specific aspects: condominiums, regularization of constructions, urban licenses, environment, leases, expropriation, and consumer protection for the sale of off-plan properties.
The Constitution of Peru guarantees the right to property, allows expropriation for public utility upon prior compensation, and protects a balanced environment. It specifically governs foreigners’ access to property, notably prohibiting acquisition within a 50-kilometer zone along the national borders.
Key Institutions
The Peruvian real estate landscape is not limited to notaries and agents. Several authorities play a direct role in the legal life of a property.
| Authority | Main Role in Real Estate |
|---|---|
| SUNARP (Superintendencia Nacional de los Registros Públicos) | Maintains the land registry, registers properties, mortgages, easements, recorded leases |
| Provincial Municipalities | Set zoning, approve land uses, validate whether land is suitable for urbanization |
| District Municipalities | Issue construction and demolition permits, operating licenses, collect local taxes |
| Ministry of Housing, Construction and Sanitation | Issues the National Building Regulations, oversees urban planning and construction |
| Ministry of the Environment (MINAM) | Defines environmental policy, soil quality standards, waste, climate |
| SENACE | Issues environmental certifications for major investment projects |
| OEFA | Monitors and enforces compliance with environmental regulations |
| Ministry of Culture | Protects archaeological heritage, issues CIRA certificates |
| SUNAT | Tax administration, assigns tax ID numbers (RUC), collects taxes and levies |
This institutional network explains why a real estate project in Peru is never reduced to a simple notarial deed. Zoning, permits, registration, environmental or archaeological certificates, and tax obligations are all pieces of the puzzle.
Property, Titles, and Land Registry: The Heart of the System
The cornerstone of the system is SUNARP. Each cadastral plot has a unique electronic record, the partida electrónica (electronic file), where the owner, encumbrances, mortgages, easements, and other real rights are recorded. Registration has a primarily declarative effect: it publicizes a right that already exists, except for mortgages, which only exist legally once registered.
To be protected by the principle of legal security and be considered in good faith, a third party must consult all documents attached to the property file, not rely solely on a Certificado Registral Inmobiliario (CRI – Property Registry Certificate) or a copia literal (literal copy). A complete title search, including deeds sometimes only available physically, is recommended.
Formal and Informal Property
Peru carries a heavy legacy of “informal properties”: occupations without valid title, sales of “possession rights”, illegal subdivisions, especially in urban peripheries, the jungle, or coastal areas under tourism development. Successive regularization programs – from the Municipality of Lima to the COFROPI commission – have granted hundreds of thousands of titles, but prior documentation often suffers from errors or incomplete archives.
For an investor, buying an unregularized property amounts to accepting a high legal risk. It is no longer a classic property transfer, but an assignment of “possessory rights.” This acquisition then requires a *saneamiento registral* (registry cleansing) process to attempt to obtain a proper SUNARP title. This process can be lengthy, uncertain, and technically complex.
Foreigners’ Access to Property
The constitutional framework is relatively liberal. Article 71 provides that foreigners have, in principle, the same property rights as Peruvians. They can buy residential, commercial properties, or titled land, with no residency requirement or cap on value or number of properties. Owning a house in Lima or an apartment in Arequipa, however, grants no automatic right to residency or citizenship: residence permits fall under specific regimes (investor, retiree, rentier, work visas).
Within a 50 km zone along the borders, a foreigner cannot acquire land, mines, forests, or energy sources without a declaration of public necessity approved by the Council of Ministers. In case of violation, the state may annul the transaction. Additional limitations apply for certain agricultural lands or protected areas, which may require the use of a Peruvian company.
Foreigners present in Peru with a simple tourist visa can sign a sales contract, provided they first obtain from the Superintendency of Migration a *Permiso para firmar contratos* (Permission to sign contracts), a specific stamp authorizing them to execute legal acts. Those who do not travel can use a power of attorney executed before a foreign notary (with apostille) or a Peruvian consulate.
Purchase Process and Essential Formalities
A typical real estate purchase in Peru unfolds in several successive stages, taking on average four to twelve weeks, depending on the complexity of the file, the property’s status, and the responsiveness of the parties involved.
It begins with commercial negotiation and a preliminary title check at SUNARP: obtaining the CRI, verifying encumbrances, comparing registered areas with reality, checking the municipal tax situation. This *due diligence* phase must also include consulting zoning and urban parameter certificates, which determine permitted uses (residential, commercial, industrial, density, height, parking, etc.).
Real estate sales in Peru follow a formal two-step process. First, signing the Minuta de Compra-Venta (or Arras contract), a binding legal draft prepared by a lawyer, which sets the sale conditions and is usually accompanied by a 10-20% down payment. Then, signing the Escritura Pública (Public Deed) before a notary, the definitive authentic deed where the notary verifies the parties’ identity, document legality, and transaction conformity.
The notary then submits the parte notarial (notarial report) to SUNARP for registration. Legally, it is the registration that perfects the transfer of property vis-à-vis third parties. Finally, on the municipal side, the buyer must perform the Alta Municipal (Municipal Registration) to update local tax data, while the seller declares the Baja Municipal (Municipal Deregistration) to cease being taxed on that property.
Zoning, Land Use, and Building Permits
Peruvian real estate is heavily conditioned by the decisions of provincial and district municipalities regarding urban planning. Municipal councils define development plans, residential, commercial, or industrial zones, allowed densities and heights. In Lima, this framework still largely relies on the metropolitan plan PLANMET 1990‑2010, extended several times and under revision by the Metropolitan Planning Institute.
Essential Urban Certificates
Before launching a project or changing a use, it is imperative to verify what the municipality allows on the plot. Two certificates play a key role: the Certificado de Zonificación (Zoning Certificate), which indicates the zoning category (low-density residential, mixed-use, industrial, etc.), and the Certificado de Parámetros Urbanísticos (Urban Parameters Certificate), which specifies maximum height, land occupation coefficient, setbacks, number of parking spaces, or particular constraints.
If a project does not match the current zoning, it is necessary to request a change of use or a variance. This procedure, called re-zoning, is examined by the municipal council, which assesses the impact on the neighborhood and consistency with urban plans. The developer must demonstrate that the project does not harm the general interest or the neighborhood’s character.
Unurbanized Land and Urbanization Licenses
On rural or unurbanized land, the procedures are even heavier. The provincial municipality must first recognize the area’s “urbanizable” character. To convert rural land into an urban subdivision, an urban development license is required, which mandates the provision of basic infrastructure: roads, potable water supply, wastewater drainage, electricity. Only once these conditions are met can a building permit be requested.
Permits, Demolition, Operation: The Role of Municipalities
No new construction can legally begin without a building permit issued by the competent district municipality. This permit is not a mere formality: the commune examines the project’s conformity with the National Building Regulations, approved by Supreme Decree No. 011‑2006‑VIVIENDA, urban parameters, zoning, and increasingly, environmental and seismic prevention requirements.
To demolish a building, a specific permit is mandatory. Authorities verify the absence of heritage value and the safety and waste management measures. If the building is for commercial use (offices, stores, factories…), an operating license (Framework Law No. 28976) is also required. Purely residential use does not require this license.
Environment, Soils, Waste: The Rise of Green Constraints
Peruvian real estate is increasingly affected by environmental standards. General Environmental Law No. 28611 and the Environmental Impact Assessment Law No. 27446 established a cross-cutting framework for all projects likely to have an environmental effect.
The Environmental Impact Assessment System
Certain real estate projects – large offices, shopping centers, factories, large-scale subdivisions – are subject to mandatory environmental certification. This can take three forms, depending on the expected impact level: a simple Environmental Impact Declaration (DIA) for low-impact projects, a Semi-detailed Environmental Impact Study (EIA‑sd) for moderate impacts, or a Detailed Study (EIA‑d) for the heaviest projects.
Maximum decision period in days for approving an environmental impact study in Peru.
Soil Standards and Contaminated Sites
Environmental quality standards for soils (ECA‑Suelo) were established in 2017 by Supreme Decrees No. 011‑2017‑MINAM and No. 012‑2017‑MINAM. They set pollutant thresholds by type of use (residential, industrial, agricultural) and organize the management of contaminated sites. The developer is obliged to investigate soil quality when developing a project likely to pollute, operating in an area marked by past polluting activities, or closing an industrial facility.
In case of contamination, several reports must be submitted to the authorities: contaminated site identification report, characterization study, remediation plan. Even if the law does not explicitly require “reporting” pollution, the duty to submit these reports leads de facto to systematic communication. The polluter-pays principle prevails: the party responsible for the degradation is obliged to restore, repair, rehabilitate, or, failing that, compensate.
Construction and Demolition Waste
Waste from construction, renovation, or demolition sites is subject to a specific regime. Legislative Decree No. 27314, supplemented by Supreme Decree No. 014‑2017‑MINAM, sets the general framework for solid waste. Supreme Decree No. 002‑2022‑VIVIENDA specifically targets construction and demolition waste.
The builder is responsible for waste management, classified as construction solid waste, some being hazardous (asbestos, solvents, etc.). Their removal must be entrusted to a licensed specialized company (EO-RS). The project owner must verify these authorizations, maintain a management plan, and produce an annual declaration. Illegal dumping in public or sensitive areas is strictly prohibited.
Archaeological Heritage: A Permanent Sword of Damocles
In a country covered with pre-Hispanic remains, no project involving excavation can ignore the Ministry of Culture. Law No. 28296, the General Law of Cultural Heritage, stipulates that any archaeological trace prior to the Spanish conquest is protected, whether known to the authorities or not.
Before undertaking excavation works, obtaining a Certificado de Inexistencia de Restos Arqueológicos (CIRA – Certificate of Non-Existence of Archaeological Remains) is mandatory, except in already urbanized areas. This document certifies that no remains have been identified on the site. If the certificate is issued conditionally or imposes special conditions, the worksite must incorporate these requirements.
If, despite this filter, remains are discovered during works, the site must be immediately halted and the ministry informed. Failure to comply can lead to civil and criminal prosecution, in addition to administrative suspension of the project.
Urban Leases, Tenant Rights, and Eviction Procedures
The Peruvian rental market is based on a combination of Civil Code provisions and specific laws, notably Law No. 30201 on urban leases and Decrees No. 1177 and No. 30933, which established accelerated eviction procedures.
The maximum legal term for a lease is ten years. A contract signed for a longer period is automatically reduced to this limit. For properties belonging to the State or to legally incapable persons, the maximum term drops to six years. In practice, residential leases are often annual, offices are leased for three to five years, while warehouses and factories are typically committed for five to ten years.
No automatic renewal right exists. Upon expiration, if the tenant remains on the premises with the landlord’s tacit consent, the lease continues but for an indefinite term, until the landlord formally requests restitution, with at least 30 days’ notice, usually notified via notarial act.
Rents are freely set, and increases are not legally capped. Annual indexing to inflation (CPI) or a fixed percentage is common. Payment is generally monthly and in advance, in soles or foreign currency as agreed by the parties.
Security Deposits and Tenant Improvements
Leases almost always include a security deposit equivalent to one or two months’ rent, provided in cash or bank transfer. The law requires the landlord to reimburse the tenant for “necessary improvements” – those that prevent deterioration or destruction of the property – and “useful improvements,” which increase the property’s value. The tenant has two months after restitution to claim this reimbursement. However, many contracts waive or limit this obligation, stipulating that improvements will remain for the owner’s benefit without compensation.
Eviction Procedures
The chronic slowness of Peruvian courts long made evictions interminable. To remedy this, an “express eviction” regime was established. It relies on a standardized form, the *Formulario Único de Arrendamiento* (FUA – Single Lease Form), which must be completed and notarized at the time of signing the lease.
If a tenant stops paying or remains in the property after the lease expires, the owner can petition a “juez de paz letrado” (lettered justice of the peace). This judge then grants the tenant five business days to prove the contract’s validity or regularize their situation. Without regularization, eviction can be executed within three days. Concurrently, Law No. 30933 established an accelerated procedure involving a notary: when the lease (in escritura pública or FUA) contains a clause of anticipated acceptance of eviction, the notary can attest to the breach and directly petition a justice of the peace, who then orders the police to proceed with the eviction.
The Code of Civil Procedure also allows the tenant, in case of particular distress, to ask the judge for a stay of up to six months to organize their departure, a measure used cautiously to prevent abuse.
Real Estate Taxation: Dealing with Alcabala, Property Tax, and Capital Gains
Beyond the sale price, the buyer and seller must account for a series of taxes and fees that, combined, often represent between 4 % and 7 % of the property’s value for the buyer, excluding agent commissions usually paid by the seller.
Property Transfer: The Alcabala Tax
The *Impuesto de Alcabala* is a municipal tax of 3 % payable by the buyer on the commercial value of the property – the higher of the agreed price or the cadastral value. An exemption applies to the first ten *Unidades Impositivas Tributarias* (UIT – Tax Units). For 2025, ten UIT corresponds to 53,500 soles. If the price is below this threshold, no Alcabala is due. Above it, only the excess portion is taxed at 3 %. First sales of new homes by construction companies within condominiums are also exempt.
Property, Rental, Transfer: The Fiscal Triad
Once an owner, the taxpayer must pay each year the Impuesto Predial (Property Tax), a progressive municipal tax calculated on the cadastral value: 0.2 % up to 15 UIT, 0.6 % between 15 and 60 UIT, and 1 % beyond. In addition, Arbitrios Municipales (Municipal Levies) finance garbage collection, street cleaning, neighborhood security, and green space maintenance. The amount varies by district and property size, often ranging between 2,000 and 4,000 soles per year in Lima’s main districts.
Maximum tax rate on gross rent for non-resident property owners in Morocco, with no possibility for deductions.
Upon resale, a tax on capital gains applies in principle at 5 % for individuals, calculated on the difference between the transfer price and the acquisition price (increased by duly justified improvements). However, there are two major exemptions: if the property was acquired before January 1, 2004, or if it constitutes the seller’s sole primary residence and was held for at least two years. If an individual transfers three or more properties in the same fiscal year, the administration considers them to be conducting a business activity, with a rate that can climb to 30 %.
For new properties sold by developers, VAT (IGV) of 18 % applies to the value of the building (excluding land). Additionally, a 2 % municipal promotion tax applies under the same conditions. Finally, the absence of inheritance or gift taxes is a notable point: a gratuitous transfer generates neither income tax nor a specific duty, although an Alcabala may be due in certain donation cases.
Order of Magnitude
| Element | Rate or Range | Who Pays? |
|---|---|---|
| Transfer Tax (Alcabala) | 3 % above 10 UIT | Buyer |
| Property Tax (Predial) | 0.2 % to 1 % of cadastral value | Owner |
| Tax on Rentals (resident) | 5 % of gross rent | Owner |
| Standard Individual Capital Gains | 5 % of net gain | Seller |
| VAT on first sale of new property | 18 % on building value | Buyer |
| Notary | 0.10 % to 0.25 % of price | Buyer |
| SUNARP Registration | approx. 0.3 % – 0.8 % of price | Buyer |
| Agent Commission | 3 % to 5 % of price | Seller |
Mortgages, Financing, and Security Interests
Real estate financing in Peru is dominated by a few major institutions – BCP, BBVA, Interbank, Scotiabank, MiBanco – which concentrate most mortgage credit. Loans are most often granted to residents with local income and a banking history. For non-resident foreigners, access to credit is possible but rarer, with high equity requirements: 40 % to 50 % down payment, interest rates generally between 7 % and 12 % per year, and terms of ten to twenty years.
To be enforceable, a mortgage constituted by public deed must be registered at SUNARP. It extends to the land, constructions, their accessories, and insurance indemnities. Second-ranking mortgages are possible, priority being set by registration date. Transfer of a mortgaged property to a third party is legally permitted without the creditor’s consent, the mortgage remaining attached to the property. However, loan contracts often require the bank’s prior approval for such a transfer.
For foreign creditors, Peruvian law allows taking security over real property and over shares or stock of companies holding real estate. These share pledges are registered in the movable property registry and the company’s internal registry. Their enforcement can, if the contract provides, be carried out extrajudicially, by private sale at a reasonable price respecting existing pre-emption rights.
Urban Planning, Sustainable Development, and Green Buildings
Peru faces a significant housing deficit and rapid, often informal urbanization. From 2001 to 2018, approximately 93 % of new urban areas developed as informal settlements. To regain control, the country has adopted a National Housing and Urban Planning Policy (PNVU) and a Law on Sustainable Urban Development (LDUS), aiming to reduce the quantitative and qualitative housing deficit, better structure urban expansion, and improve access to services: water, sanitation, mobility.
Buildings consume nearly 45 % of the country’s total energy.
For now, its mandatory application mainly targets public projects and those financed by the public mortgage fund Fondo MiVivienda. The latter notably offers a subsidized credit product, the *Bono Mivivienda Sostenible* (BMS), reserved for housing meeting a “Bono Verde” (Green Bonus) benchmark. Concurrently, several municipalities – San Borja, Miraflores, Surco, San Isidro, Arequipa, Cusco, Piura, among others – have introduced regulatory incentives for certified green buildings (LEED, EDGE, BREEAM), such as height bonuses or reductions in required parking spaces.
This was the share of new green-certified buildings in France in 2019.
Liabilities, Sanctions, and Recourse
The complexity of Peruvian real estate law also translates into an overlay of possible liabilities: administrative, civil, and criminal. An operator can be sanctioned for non-compliance with urban planning rules, lack of permits or licenses, environmental breaches, damage to archaeological heritage, or tax fraud.
Environmental infractions, for example, are subject to administrative fines that can reach 30,000 tax units (UIT), suspension, or closure of activities. The statute of limitations is generally four years for administrative breaches, but civil actions for damages can be filed over longer periods.
An entrepreneur is denied a building permit by their municipality. To challenge this decision, they can first file a reconsideration appeal or a hierarchical appeal to the prefecture, in accordance with the General Administrative Procedures Law (No. 27444). If these administrative appeals fail, they can ultimately petition the administrative court for judicial review.
In transactions, contractual allocation of environmental or tax risks between seller and buyer is common. However, vis-à-vis the authorities, the principle remains that the current operator or owner is primarily liable. An ill-advised buyer can therefore become liable for unpaid municipal taxes, outstanding public service charges left by previous owners, or environmental remediation measures linked to past activities.
A Market Reality Marked by Informality and Concentration
Behind this sophisticated regulatory framework, the Peruvian real estate market remains pulled in two directions at once. Pulled upward by massive housing demand – hundreds of thousands of housing units are lacking just in Lima –, by urban growth, and by structured developments in major cities. Pulled downward by persistent informality: entire neighborhoods built outside the cadastre’s radar, illegal subdividers, lack of permits and titles, fueling accessible but legally fragile supply.
Real estate financing is dominated by a small number of banks. Many transactions, particularly with foreign buyers, are conducted in cash via certified wire transfers, as cash use is limited beyond $10,000 to prioritize traceable payments.
In this environment, the added value of experts – lawyers, notaries, engineers, surveyors, architects – becomes decisive. Knowing Peruvian real estate laws and regulations well does not mean one can do without them; rather, it enables one to know what questions to ask, what documents to require, and what steps never to skip.
Whether checking a partida electrónica, measuring a zoning impact on a project, understanding the tax regime of an operation, anticipating an environmental impact study, or managing archaeological risk, the key lies in rigorous preparation. In Peru, perhaps more than elsewhere, a successful project often starts with an impeccably assembled file.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
