Countries › Uruguay › Guide › 11. Real estate and land › Tax on rental income in Uruguay: IRPF and IRNR at 12 percent, deductions, the 40 BPC exemption and 10.5 percent withholding

Tax on rental income in Uruguay: IRPF and IRNR at 12 percent, deductions, the 40 BPC exemption and 10.5 percent withholding

Argentina. For full detail on Argentina, go to The Argentine Thread.

Last verified: 2026-10-27 · Status: Stable

Individuals renting out Uruguayan property pay 12 percent on net rent: IRPF if resident, IRNR if not, with deductions limited to the manager's commission, contract fees and property taxes (T.O. 2023 Title 7 art. 16 and 37, Title 8 art. 18). Resident landlords with total rent up to 40 BPC a year can be exempt if they lift bank secrecy; companies pay IRAE at 25 percent instead. Managers, public bodies and many company tenants withhold 10.5 percent of gross rent (Decreto Nº 148/007 art. 37, Decreto Nº 149/007 art. 33); leases are VAT exempt and tenants can credit up to 8 percent of home rent against IRPF.

USD figures use UYU 40.21 per US dollar, the BCU quotation for DLS. USA BILLETE on 27 October 2026; amounts in Unidades Indexadas (UI) use UYU 6.6792 per UI, the BCU quotation for 27 October 2026; amounts in Unidades Reajustables (UR) use UYU 1,940.77, the UR for September 2026 published by IMPO (the latest published on 27 October 2026); the BPC is UYU 6,864 for 2026 (Decreto Nº 11/026). All were retrieved on 27 October 2026. Conversions are for orientation only.

Key facts

Withholding on rent paid to non residents (of gross)	10.5 %Decreto Nº 149/007 art. 33, as of 2026-10-27 · in force
Withholding on rent paid to resident individuals (of gross)	10.5 %Decreto Nº 148/007 art. 37 (Decreto Nº 95/026), as of 2026-10-27 · in force
IRPF on net rent, resident individuals	12 %T.O. 2023 Title 7 art. 37 B, as of 2026-10-27 · in force
Rent exemption ceiling for resident individuals	40 BPC per yearT.O. 2023 Title 7 art. 38 J, as of 2026-10-27 · in force
Tenant IRPF credit for permanent home rent	8 % of rentT.O. 2023 Title 7 art. 51, as of 2026-10-27 · in force
Argentina Uruguay agreement relief method	Credit in the residence country for tax paid on source country income and assets Ley Nº 19.032 art. 11, as of 2026-10-27 · in force

The rule

1. Income from real estate for individuals covers rent, sub rent and the creation or assignment of rights to use or enjoy property, whatever their name. Net rent is gross rent accrued in the period, less bad debts and: the property manager's commission, professional fees for signing and renewing contracts and the VAT on them; Contribución Inmobiliaria and primary education tax; and, for sub leases, the rent paid by the sub lessor. For leases shorter than twelve months the property tax and sub rent deductions are proportional.
Cost to do it: No deduction for depreciation, interest or maintenance under these articles.
Example: Gross rent of UYU 720,000 a year less UYU 90,000 of commission, fees and property taxes gives net rent of UYU 630,000. / About US$17,906 gross and US$15,668 net.T.O. 2023 (Decreto Nº 101/024), Title 7 IRPF, Title 7 art. 15 and art. 16, 2024-04-04 official text · verified 2026-10-27

2. Resident individuals pay IRPF on that net rent at the 12 percent rate for capital income ('Restantes Rentas'). Rent from real estate is exempt when the owner's total rent does not exceed 40 BPC a year and the owner expressly lifts bank secrecy, unless the owner also has other capital income above 3 BPC a year.
Cost to do it: 12% of net rent; exempt up to 40 BPC (UYU 274,560 in 2026).
Example: A resident retiree earning UYU 250,000 of rent a year and no other capital income above 3 BPC can claim the exemption (40 BPC = UYU 274,560). / The 2026 ceiling is about US$6,828 of rent a year.T.O. 2023 Title 7 (art. 37 B wording by Ley Nº 20.446 art. 653), Title 7 art. 37 B and art. 38 J, 2025-12-16 official text · verified 2026-10-27

3. Non residents without a permanent establishment pay IRNR on Uruguayan source rent, computed under the IRPF rules, at 12 percent; the rate for entities in low or no tax jurisdictions is higher (see the withholding taxes page).
Cost to do it: 12% of net rent.
Example: A non resident with net rent of UYU 630,000 owes UYU 75,600. / About US$1,880 a year.T.O. 2023 Title 8 IRNR, Title 8 art. 13, art. 16 and art. 18, 2024-04-04 official text · verified 2026-10-27

4. Companies (IRAE taxpayers) include rent in business income taxed at 25 percent. Individuals selling or promising to sell property can be pulled into IRAE when they subdivide into more than 25 lots, or make more than two sales in a fiscal year whose value exceeds twice the individual wealth tax minimum, with exclusions for property held ten years or more and for inheritance partitions.
Cost to do it: 25% on business profit for companies.
Example: A Uruguayan S.A. that owns and rents offices pays IRAE on the rental profit, not IRPF. / Holding rental property in a company changes the rate from 12 to 25 percent but allows business deductions.T.O. 2023 Title 4 IRAE, Title 4 art. 12, art. 13 and art. 23, 2024-04-04 official text · verified 2026-10-27

5. Withholding agents for IRPF and IRNR on rent include public bodies, rent guarantee and collection entities, large IRAE taxpayers (for IRPF) or all IRAE taxpayers (for IRNR), property managers that collect rent, and IRAE farmers renting rural land. They withhold at the time of payment 10.5 percent of the gross amount (rent paid plus the withholding) for leases of property, and 12 percent on other real estate income. Owners who prove the 40 BPC exemption are not withheld. The Executive has suspended withholding by managers and IRAE payers on short tourist leases of up to 31 days for specific seasons, such as 1 December 2024 to 30 April 2025.
Cost to do it: 10.5% of gross rent withheld by the paying agent.
Example: A property manager collecting UYU 720,000 a year for a non resident withholds UYU 75,600. / About US$1,880, which equals 12 percent of net rent when deductions are 12.5 percent of gross.Decreto Nº 148/007 art. 36 to 38 (wording by Decreto Nº 95/026 art. 24 and 25); Decreto Nº 149/007 art. 32 and 33 (Decreto Nº 128/017 art. 25); Decreto Nº 309/024, Decreto Nº 148/007 art. 36 to 38; Decreto Nº 149/007 art. 32 and 33, 2026-05-06 official text · verified 2026-10-27

6. Tenants who pay IRPF and rent their permanent home can credit against IRPF up to 8 percent of the rent, if they identify the landlord; for temporary tourist leases the Executive may allow a credit of up to 6 percent. Leases of real estate are exempt from VAT.
Cost to do it: None for the landlord; the credit reduces tenants' tax.
Example: A tenant paying UYU 40,000 a month can credit up to UYU 38,400 a year against IRPF. / About US$955 a year, which encourages tenants to name the landlord to the DGI.T.O. 2023 Title 7 art. 51; Title 10 art. 38 numeral 2 C, Title 7 art. 51; Title 10 art. 38, 2024-04-04 official text · verified 2026-10-27

7. In any lawsuit in which a lease is relied on, the landlord must show that the IRPF on that rent is paid, except in eviction proceedings for leases without guarantee under Ley Nº 19.889 art. 421.
Cost to do it: Tax arrears must be cleared before suing.
Example: A landlord suing for unpaid rent under an ordinary lease must prove IRPF compliance. / Keep rent tax filings current to keep enforcement options open.T.O. 2023 Title 7, Title 7 art. 17, 2024-04-04 official text · verified 2026-10-27

8. Under the Argentina Uruguay tax agreement, an Argentine resident with income taxed in Uruguay (Uruguayan source) deducts the Uruguayan income tax from its Argentine income tax, up to the Argentine tax on that income; the same applies to wealth tax on assets situated in Uruguay.
Cost to do it: No Uruguayan cost; the relief is given in Argentina.
Example: An Argentine resident renting a flat in Punta del Este pays 12 percent IRNR in Uruguay and credits it in Argentina within the limit. / See The Argentine Thread guide for the Argentine side.Ley Nº 19.032 (Argentina Uruguay agreement on tax information and double taxation), Agreement art. 11 and Protocol points 2 and 3, 2012-12-27 official text · verified 2026-10-27

Owner	Tax	Rate	Withholding by agent
Resident individual	IRPF	12% of net rent (exempt up to 40 BPC with conditions)	10.5% of gross
Non resident individual or entity	IRNR	12% of net rent	10.5% of gross
Uruguayan company	IRAE	25% of business profit	Not under these articles

Tax on rent from Uruguayan property by owner type

Worked example

A US investor (non resident) lets a Montevideo flat for UYU 60,000 a month (about US$1,492), UYU 720,000 a year.
Deductions: manager commission and VAT, contract fees and Contribución Inmobiliaria and primary education tax, totalling UYU 90,000 (hypothetical). Net rent: UYU 630,000.
IRNR at 12 percent: UYU 75,600 (about US$1,880). The manager withholds 10.5 percent of gross, UYU 75,600, which in this case matches the final tax.
If deductions were higher, the owner could file to recover the excess; if lower, the owner pays the difference.

Step by step

Register the owner (resident or non resident) with the DGI and appoint a Uruguayan representative if needed.
Use a property manager or have the tenant company withhold, and keep withholding certificates.
Keep invoices for commissions, fees and property taxes to support deductions.
File the annual IRPF or IRNR return where required and claim credits for withholdings.
For tourist lets, check whether a seasonal withholding suspension applies that year.

Common traps

No depreciation or interest deduction: the 12 percent is close to a tax on gross rent.
Using a company changes the regime to IRAE at 25 percent.
Seasonal suspensions of withholding on short tourist lets are temporary decrees, not a permanent exemption.
Landlords behind on rent tax cannot rely on the lease in court, except in eviction under the no guarantee regime.

Sources

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