Countries › Paraguay › Guide › 6. Taxes › Local and property taxes in Paraguay: municipal real estate tax at 1 percent and other municipal levies

Local and property taxes in Paraguay: municipal real estate tax at 1 percent and other municipal levies

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

Paraguay has no state level income or sales taxes; local taxation is municipal. The main levy is the annual impuesto inmobiliario at 1 percent of the cadastral value (0.5 percent for a single rural plot under 5 hectares used for farming), collected by the municipality, with a surcharge on vacant urban lots. The Ley Orgánica Municipal lists other municipal taxes, including commercial, industrial and professional licences (patentes), vehicle licences, construction, property transfer and advertising taxes.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026 (planilla de cotizaciones of that day). Conversions are for orientation only.

Key facts

Annual real estate tax rate on cadastral value	1 %Ley 125/1991 art. 61, as of 2026-10-28 · in force
Real estate tax rate on a single rural farm plot under 5 hectares	0.5 %Ley 125/1991 art. 61, as of 2026-10-28 · in force
Prescription of municipal taxes	5 yearsLey 3966/2010 art. 173, as of 2026-10-28 · in force
Maximum prompt payment discount on municipal taxes	12 %Ley 3966/2010 art. 151, as of 2026-10-28 · in force

The rule

1. Property tax. An annual impuesto inmobiliario applies to real estate in Paraguay, owed by individuals, companies and entities and arising on 1 January. The base is the fiscal valuation set by the Servicio Nacional de Catastro. The rate is 1 percent; rural plots under 5 hectares that are the owner's only property and used for farming pay 0.5 percent. Vacant urban lots bear an additional tax.
Cost to do it: 1 percent a year of cadastral value, which is usually below market value.
Example: An office with a cadastral value of PYG 1,500,000,000 pays PYG 15,000,000 a year. / On US$255,610 of cadastral value the tax is US$2,556 a year.Ley Nº 125/1991 Libro II (Impuesto Inmobiliario), still in force, Art. 54, 55, 56, 60, 61, 68 and 69, 1991-12-18 official text · verified 2026-10-28

2. Collected by municipalities. Taxes that fall directly on real estate belong to municipalities and departments and are collected by municipalities; each keeps 70 percent, 15 percent goes to the department and 15 percent to lower income municipalities (Asunción keeps 85 percent). The municipality sets the valuation of each property under the annual cadastral rules, and may grant up to a 12 percent discount for prompt payment.
Cost to do it: Prompt payment discount up to 12 percent by ordinance.
Example: The Municipality of Asunción bills and collects the tax on an Asunción office. / Early payment discounts depend on each municipality's ordinance.Ley Nº 3966/2010 Orgánica Municipal, Art. 151, 153 and 154, 2010-02-08 official text · verified 2026-10-28

3. Clearance before transfers. Notaries cannot execute deeds transferring or creating real rights over property without a certificate that this tax is paid, the registry will not record such deeds, and courts will not process property actions without it.
Cost to do it: Arrears must be cleared before closing.
Example: A buyer's notary requests the municipal tax clearance before signing. / Unpaid prior years block registration of the sale.Ley Nº 125/1991 Libro II, Art. 64, 65 and 66, 1991-12-18 official text · verified 2026-10-28

4. Other municipal taxes. Municipal taxes include taxes on vacant and very large properties, commercial, industrial and professional licences, vehicle licences, construction, subdivision, transfers of real estate, building, cattle brands and slaughter, public passenger transport, shows and gaming, raffles, credit operations, advertising, municipal stamps, cemeteries and animal owners. Municipal taxes prescribe in five years and the national tax rules apply where the municipal law is silent.
Cost to do it: Rates for these taxes are not set in Ley 3966; they come from the municipal tax laws and ordinances.
Example: A new Asunción branch needs a municipal commercial licence (patente) before opening. / Construction permits carry a municipal construction tax.Ley Nº 3966/2010 Orgánica Municipal, Art. 152, 172 and 173, 2010-02-08 official text · verified 2026-10-28

Tax	Notes
Impuesto inmobiliario	1%, 0.5% small rural (Ley 125 art. 61)
Vacant lots and very large properties	Surcharge (Ley 125 art. 68)
Commercial, industrial and professional licence (patente)	Rate per municipal tax law
Vehicle licence	Annual
Construction, subdivision, building	On permits
Transfer of real estate	On deeds
Advertising, shows, raffles, credit operations, stamps	Per ordinance

Municipal taxes listed in Ley 3966/2010 art. 152

Worked example

A foreign investor buys a warehouse in Luque with a cadastral value of PYG 2,000,000,000 (US$340,814).
Annual impuesto inmobiliario at 1 percent: PYG 20,000,000 (US$3,408), billed by the Municipality of Luque.
The notary checks the seller's tax clearance before the deed; the buyer then takes over from the following 1 January.
The company also registers for the municipal patente before trading.

Step by step

Ask the seller for the municipal tax clearance before signing a property deal.
Register the property with the municipality and calendar the annual payment.
Check the municipality's ordinance for prompt payment discounts.
Obtain the municipal commercial licence (patente) for each establishment.

Common traps

The base is the cadastral value, which can be revalued (Ley 3966 art. 155 and 156).
Vacant urban lots carry an extra tax (Ley 125 art. 68).
Municipal rates and fees vary between municipalities.

Sources

Related: Paraguay country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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