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VAT on real estate in Uruguay: 10 percent on first sales by developers, exempt resales, land and leases

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

Uruguay charges VAT at the 10 percent minimum rate on the first sale of a building by a business, including significantly refurbished property, instead of the 22 percent standard rate (T.O. 2023 Title 10 art. 34 and 36 I). Resales, sales of unimproved land and all residential and commercial leases are exempt (art. 38). Owner administered construction on non business property is taxed on the value added, while labour only building services with construction social security paid can be exempt.

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

VAT on first sale of real estate by a business	10 %T.O. 2023 Title 10 art. 36 I, as of 2026-10-27 · in force
VAT on resale of real estate (non first sale)	Exempt T.O. 2023 Title 10 art. 38 1 B, as of 2026-10-27 · in force
VAT on leases of real estate	Exempt T.O. 2023 Title 10 art. 38 2 C, as of 2026-10-27 · in force
VAT on commercial rent	Exempt T.O. 2023 Title 10 art. 38 2 C, as of 2026-10-27 · in force
VAT on sale of unimproved land	Exempt T.O. 2023 Title 10 art. 38 1 B, as of 2026-10-27 · in force

The rule

1. VAT taxes the domestic circulation of goods, services, imports and value added in construction on real estate. Value added in construction means works carried out under the administration method (the owner hires labour directly) when the property is not used for activities that generate VAT or IRAE taxable income.
Cost to do it: VAT at the applicable rate on the value added by the owner built works.
Example: An individual who builds a holiday house by directly hiring workers is a VAT taxpayer on the value added in construction. / Contracting a builder instead moves the VAT to the builder's invoices.T.O. 2023 (Decreto Nº 101/024), Title 10 VAT (from Decreto Ley Nº 14.948 and Ley Nº 18.083), Title 10 art. 1 D, 2024-04-04 official text · verified 2026-10-27

2. The first sale of real estate by companies carrying on the business activities of IRAE (Title 4 art. 12) is taxed at the 10 percent minimum rate; first sale includes property with significant refurbishment or recycling as defined by regulation. Sales under promises registered before Ley Nº 18.083 came into force are excluded. The standard rate is 22 percent.
Cost to do it: VAT at 10% on a developer's first sale.
Example: A developer selling a new flat for a taxable amount of UYU 8,042,000 charges VAT of UYU 804,200. / On US$200,000 that is US$20,000.T.O. 2023 Title 10, Title 10 art. 34 and art. 36 I, 2024-04-04 official text · verified 2026-10-27

3. All other sales of real estate are exempt from VAT, and sales of land without improvements are exempt in every case. Sales by the Banco Hipotecario del Uruguay and the Agencia Nacional de Vivienda are also exempt. Leases of real estate are exempt, while services mediating tourist leases are listed separately in the title.
Cost to do it: No VAT on resale by individuals or on rent.
Example: A foreign individual reselling a flat bought from a developer pays no VAT; nor does a landlord on monthly rent. / Commercial rents in Uruguay carry no VAT, unlike many countries.T.O. 2023 Title 10, Title 10 art. 38 numeral 1 B and numeral 2 C, 2024-04-04 official text · verified 2026-10-27

4. Construction services on property not used for VAT or IRAE taxed activities are exempt when the provider's staff contribute the construction social security contribution (AUC) and the provider supplies only accessory materials.
Cost to do it: Labour only building contracts on private homes can be VAT free.
Example: A labour only contract to renovate a private home, with AUC paid, carries no VAT. / Materials supplied by the contractor beyond accessories make the contract taxable.T.O. 2023 Title 10, Title 10 art. 38 numeral 2 N, 2024-04-04 official text · verified 2026-10-27

Transaction	VAT
First sale of a building by a business (developer)	10%
Resale by anyone	Exempt
Sale of unimproved land	Exempt
Residential or commercial lease	Exempt
Owner administered construction on non business property	Taxed on value added
Labour only construction services with AUC on non business property	Exempt

VAT on real estate transactions (T.O. 2023 Title 10)

Worked example

A foreign buyer purchases a new unit from a developer for US$200,000 (taxable amount UYU 8,042,000).
VAT at 10 percent: UYU 804,200 (US$20,000), plus 2 percent buyer ITP. If the same buyer later resells, no VAT applies.

Step by step

Ask whether the seller is a business making a first sale; price offers should state whether VAT is included.
For self build projects, decide between owner administration and a builder contract, considering VAT and AUC.
For rentals, no VAT invoice is needed for the rent itself; manager commissions do carry VAT.

Common traps

A refurbished building can count as a first sale and carry VAT.
Owner administered works on property used privately create VAT liability on value added.
Mediation services for tourist leases are treated separately from the exempt lease itself.

Sources

← Selling property in Uruguay: tax on gains at 12 percent, UI indexed cost, the pre 2007 option and notary withholdingResidential and commercial leases in Uruguay: Decreto Ley Nº 14.219, the no guarantee regime of Ley Nº 19.889, terms, deposits and eviction →