Countries › Paraguay › Guide › 11. Real estate and land › Leasing property in Paraguay: term limits, registration, rent, subletting, eviction and the taxes on rent

Leasing property in Paraguay: term limits, registration, rent, subletting, eviction and the taxes on rent

Last verified: 2026-10-28 · Status: Stable

Paraguay has no separate tenancy statute: leases are governed by the Civil Code, which caps any lease at five years (twenty if urban land is leased to build on or rural land for long cycle plantations), fills in a one year term for unfurnished homes and business premises, and leaves rent free to agree. A lease survives a sale only if it is registered, and prepaid rent beyond six months (urban) is not safe against buyers or mortgagees. Two unpaid months allow termination, eviction after an expired term is due within ten days of judgment, holding over is not a renewal, and rent carries VAT at 5 percent (housing) or 10 percent plus 7.5 percent INR when the landlord is non resident.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation in the planilla for Wednesday 28 October 2026, https://www.bcp.gov.py/webapps/web/cotizacion/monedas. Conversions are for orientation only.

Key facts

Maximum lease term (longer terms are cut back)	5 yearsLey 1183/1985 Código Civil art. 807, as of 2026-10-28 · in force
Maximum term when urban land is leased to build on, or rural land for long cycle plantations	20 yearsLey 1183/1985 Código Civil art. 807, as of 2026-10-28 · in force
Implied term of an unfurnished house or business premises lease with no agreed term	1 yearsLey 1183/1985 Código Civil art. 808 c, as of 2026-10-28 · in force
Unpaid monthly rents that allow the landlord to terminate	2 monthsLey 1183/1985 Código Civil art. 837 h, as of 2026-10-28 · in force
Time to carry out eviction after notice of the judgment (expired fixed term)	10 daysLey 1183/1985 Código Civil art. 838, as of 2026-10-28 · in force
Time for a tenant under an open ended house or premises lease to return it after demand	40 daysLey 1183/1985 Código Civil art. 839 b, as of 2026-10-28 · in force
Prepaid rent valid against mortgagees and buyers, urban property	6 monthsLey 1183/1985 Código Civil art. 817, as of 2026-10-28 · in force
VAT on housing leases	5 %Ley 6380/2019 art. 90 lit. a, as of 2026-10-28 · in force
VAT on other leases	10 %Ley 6380/2019 art. 90 lit. g, as of 2026-10-28 · in force
Effective INR on rent paid to a non resident (15% on 50% of rent)	7.5 %Ley 6380/2019 art. 75 num. 3 and 76, as of 2026-10-28 · in force

The rule

1. Term limits. A lease (locación) grants the use and enjoyment of a thing for a price in money, and any non fungible property in commerce may be leased. A lease may not be agreed for more than five years; a longer term is cut back to five years, unless an urban property is leased so that the tenant can build on it, or rural land is leased for plantations that take a long time to produce, in which case the lease may run for up to twenty years. Where the parties set no term, the law supplies one: one year for unfurnished houses and for premises used for a profession, industry or trade; for furnished rooms or flats, the period to which the agreed price refers (year, month, week or day); and the harvest cycle for farmland. The lease chapter yields to contrary rules in special laws (for example financial leasing under Ley 1295/1998).
Cost to do it: No registration or fee is needed for the lease to bind the parties. Drafting by a lawyer and signature authentication by a notary are market priced; no official tariff was verified.
Example: A 10 year office lease at PYG 17,604,930 a month signed in Asunción with no building clause is legally a 5 year lease; the tenant has no statutory right to the extra 5 years. / A foreign company that wants 10 or 15 years of security for a fit out of US$500,000 needs either a build to suit structure (urban land leased so the tenant builds, up to 20 years) or a renewal option it can enforce, because a plain 10 year lease is cut to 5.Ley Nº 1183/1985 Código Civil, Libro III, Título II, Capítulo III (De la locación), Art. 803, 804, 805, 807, 808 and 844, 1985-12-18 official text · verified 2026-10-28

2. Registration protects the tenant against a sale and limits prepaid rent. If the leased property is sold, the lease survives for the agreed term only if the contract was registered in the property registry. The Registro de Inmuebles records leases, and when the lease is a private document the signatures must be authenticated by a registry notary (escribano de registro) for it to be registered. Rent paid in advance can be challenged by third parties: even against contrary agreement, prepayments are valid against mortgage creditors and buyers only up to six months for urban property and one year for rural property, unless longer prepayments were made and noted in the registry before the mortgage was created.
Cost to do it: Registration requires notarial authentication of signatures and registry filing; the registry and notary charges were not verified and are not reproduced.
Example: A tenant who prepays 12 months of rent (PYG 211,259,160) on an unregistered office lease is protected only for 6 months (PYG 105,629,580) against a bank that forecloses a mortgage or a buyer who did not know of the prepayment. / On a US$3,000 a month lease, prepaying a year (US$36,000) without registering puts US$18,000 of the prepayment at risk if the building is sold or foreclosed.Ley Nº 1183/1985 Código Civil; Ley Nº 879/1981 Código de Organización Judicial, CC art. 810 and 817; COJ art. 269 and 272, 1985-12-18 official text · verified 2026-10-28

3. Who pays for what. The landlord must hand over the property fit for the agreed use, keep the tenant in peaceful enjoyment, keep the property as leased, reimburse necessary expenses and answer for serious defects that prevent use; the repair duty covers damage from fortuitous events and force majeure and from normal use. Improvements need the landlord's written permission, and if the landlord is to pay for them the maximum amount the tenant may spend and the rents against which it will be set off must be stated, or the authorization is void. If the landlord ignores notice of repairs that are the landlord's responsibility, the tenant may withhold the part of the rent needed to pay for them and, if urgent, do the work at the landlord's cost. The tenant must use the property as agreed, pay rent on time, keep it in good condition, make minor repairs, warn the landlord of defects and third party claims, pay taxes levied because of the use or operation of the property even if collected from the owner, and return it at the end. For buildings, the landlord has an executive action (juicio ejecutivo) to collect rent.
Cost to do it: No statutory fee. The allocation of property tax and VAT is a commercial term; the law only places on the tenant taxes caused by the tenant's use or operation.
Example: A tenant whose roof leak is ignored after written notice may pay a PYG 11,736,620 repair and deduct it from the next month's rent of PYG 17,604,930. / For a US$2,000 urgent repair the tenant can self help and offset, but should keep the written notice; without notice there is no offset and no rent reduction.Ley Nº 1183/1985 Código Civil, Art. 812, 813, 814, 815, 821, 822 and 825, 1985-12-18 official text · verified 2026-10-28

4. Subletting and assignment. Unless the contract forbids it, the tenant may sublet all or part of the property, lend it, or assign the lease (assignment transfers the tenant's rights and obligations under the rules on assignment of rights). A ban on subletting also bans assignment, and vice versa. The original lease is unaffected: the landlord may claim directly from the subtenant up to the rent the subtenant still owes. If the tenant sublets despite a ban, the landlord may evict the subtenant, recover possession of the sublet part and claim damages or terminate the lease.
Cost to do it: No fee.
Example: A regional group that leases a floor at PYG 17,604,930 a month in its local company's name and lets an affiliate use half needs the lease to allow subletting or a written landlord consent. / A US$3,000 a month lease silent on subletting allows a sublet to an affiliate; a lease that bans subletting also blocks assigning it to a new group company after a restructuring.Ley Nº 1183/1985 Código Civil, Art. 830, 831, 832 and 836, 1985-12-18 official text · verified 2026-10-28

5. How a lease ends and eviction. A lease ends when a fixed term expires; at any time at the wish of either party if no term was agreed; on loss of the property or impossibility of the agreed use; for serious hidden defects; for fortuitous events; for fault of either party; and when the tenant owes two monthly rents and the landlord asks for termination. Where a fixed term has expired and the tenant does not leave, the landlord may sue for immediate return plus damages, and the eviction is carried out within ten days of notice of the judgment. For leases with no fixed term, a tenant who is not two rents behind has, from the landlord's demand, 40 days for a house or premises (7 days if rent is fixed by the day), one year for rural land with a farming establishment and six months for bare land. Staying on after the end is not a tacit renewal: the old terms continue until the landlord asks for the property back, which may be at any time, and a holdover tenant in default pays the agreed rent until return plus any other damage. Death does not end a fixed term lease, although the heirs of a residential tenant may terminate without compensation within six months in limited cases. Eviction, termination and rent claims go to the Juzgados Letrados en lo Civil y Comercial when the claim does not exceed 300 minimum daily wages, and to the courts of first instance above that.
Cost to do it: Court costs and lawyer fees apply (lawyer fees under Ley 1376/1988 are not computed here). The 300 daily wage ceiling for the Juzgados Letrados is PYG 35,123,100 at the daily minimum wage of PYG 117,077 in force since 1 July 2026 (Resolución MTESS 670/2026).
Example: A tenant two months behind on a PYG 17,604,930 rent (PYG 35,209,860 owed) can be sued for termination; once the eviction judgment is notified, the eviction is due within 10 days for an expired fixed term. / Rent arrears and eviction claims up to about US$5,985 (300 daily minimum wages) go to the lower civil courts, which matters for choosing the forum and the procedure.Ley Nº 1183/1985 Código Civil; Ley Nº 879/1981 Código de Organización Judicial (2022 consolidated edition), CC art. 837, 838, 839, 841 and 843; COJ art. 43, 1985-12-18 official text · verified 2026-10-28

6. Taxes on rent. VAT applies to leases by VAT taxpayers at 5 percent for property used exclusively as housing (including use and usufruct) and 10 percent in all other cases. A non resident landlord with Paraguayan source rent pays the non resident income tax (INR) at 15 percent on a deemed net income of 50 percent of the rent, with no proof to the contrary, so 7.5 percent of the gross rent; residents and entities in Paraguay withhold it when they pay. Resident individuals and companies pay IRP or IRE instead (see the property purchase page for the detail).
Cost to do it: No filing fee; VAT and INR are paid through the monthly tax returns of the landlord or the withholding agent.
Example: Office rent of PYG 17,604,930 a month: VAT at 10 percent is PYG 1,760,493; if the landlord is non resident the tenant withholds INR of PYG 1,320,370 (7.5 percent). A PYG 7,041,972 flat let as a home carries VAT of PYG 352,099 (5 percent). / US$3,000 office rent: VAT US$300 and, for a non resident landlord, INR US$225 a month (US$2,700 a year). A US$1,200 home rent: VAT US$60.Ley Nº 6380/2019 de modernización y simplificación del sistema tributario nacional, Art. 75 num. 3, 76, 77 and 90 lit. a and g, 2019-09-25 official text · verified 2026-10-28

Situation	Period	Article
Maximum lease term	5 years	807
Urban land leased to build, or rural land for long cycle plantations	Up to 20 years	807
No agreed term: unfurnished house, or premises for a profession, industry or trade	1 year	808 c
No agreed term: furnished rooms or flats	The period the price refers to	808 d
Prepaid rent safe against buyers and mortgagees	6 months urban, 1 year rural	817
Eviction after an expired fixed term	Within 10 days of notice of judgment	838
Return after demand, open ended lease of a house or premises	40 days (7 if rent is daily)	839 b
Return after demand, rural land with a farming establishment	1 year	839 c
Return after demand, bare land	6 months	839 d

Statutory lease periods (Código Civil art. 807, 808, 817, 838 and 839)

Worked example

A subsidiary leases offices in Asunción for US$3,000 a month (PYG 17,604,930) from a local company: the landlord adds VAT of PYG 1,760,493 (US$300).
If the landlord is a non resident individual instead, the tenant withholds INR of PYG 1,320,370 (US$225) a month and pays the landlord PYG 16,284,560 (about US$2,775).
The parties want 10 years: the Civil Code cuts a plain lease to 5, so the deal is papered as a 5 year lease with an option to renew, and the lease is registered with notarized signatures so that it survives a sale of the building.
Prepayment: the tenant prepays 6 months (PYG 105,629,580, US$18,000), which is the most that is safe against a later buyer or mortgagee of an urban property unless a longer prepayment is noted in the registry first.

Step by step

Check the landlord's title and any mortgage or attachment with a registry ownership certificate before signing (see the property purchase page for certificate timing).
Set the term within the 5 year cap, or use a build to suit structure (up to 20 years) where the tenant will construct; add a renewal option if longer occupancy matters.
Agree who bears property tax, building expenses and VAT, and whether subletting or assignment to group companies is allowed (a silent contract allows subletting).
If the lease must survive a sale or foreclosure, have the signatures authenticated by a registry notary and register it in the Registro de Inmuebles.
Keep rent prepayments within 6 months (urban) or 1 year (rural) unless noted in the registry before any mortgage.
For a non resident landlord, set up INR withholding of 7.5 percent of gross rent; for VAT taxpayer landlords, require a valid electronic invoice for VAT at 5 or 10 percent.
At the end, recover the property promptly: holding over is not a renewal, and two unpaid months support termination and eviction.

Common traps

A lease longer than five years is not void but is cut to five years, so a long fit out can be stranded unless the build to suit exception or an enforceable renewal applies.
An unregistered lease does not survive a sale of the property: the buyer is not bound to respect the remaining term.
Rent prepaid for more than six months (urban) is exposed to the landlord's mortgage bank and to buyers.
A clause banning subletting also bans assigning the lease, which can block an intra group restructuring.
Improvements made without written permission can be ordered removed, and a reimbursement promise is void unless it caps the spend and the rents to be set off.
Taxes caused by the tenant's use or operation of the property fall on the tenant by law, even if billed to the owner.
VAT on rent is 5 percent only for exclusive housing use; any mixed or business use is 10 percent.

Sources

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