Uruguay: Tax incentives for real estate related to tourism
Temporary leasing of real estate for tourist purposes when the tenants are non-resident natural persons
Temporary leasing of real estate for tourist purposes
A series of tax incentive measures intended to encourage tourism may affect the real estate sector.
Decree No. 342/021 (5 October 2021) concerns the temporary leasing of real estate for tourist purposes when the tenants are non-resident natural persons. The tax incentive is a credit equal to 10.5% of the gross lease amount. The measures include a provision so that the tax benefit is transferred to the non-resident consumer.
For this tax benefit to apply, certain conditions must be satisfied, such as (1) the tenant must be a non-resident natural person; (2) the lease must be made in the period between 1 November 2021 and 30 April 2022; (3) the payment must be made using credit or debit cards issued abroad; (4) a property administrator who collects the payment must act as an intermediary; and (5) the lease must have as its sole object the room(s) for use by tourists and the term of this lease may not exceed four months. If these conditions are met, the tenants can be eligible for a refund equal to 10.5% of the gross amount of the price agreed for the lease.
Decree No. 337/021 (30 September 2021) suspended an obligation to withhold certain taxes, by entities managing leased properties such as real estate. The measure seeks to equalize the treatment of real estate with respect to properties offered for rent through digital platforms. The suspension of the withholding tax obligation applies only to rentals that have a temporary rental contract of a property for tourism purposes and when the term of the lease does not exceed 31 days. The suspension applies with regard to leases in the period between 1 November 2021 and 30 April 2022.
Read a December 2021 report (Spanish) prepared by the KPMG member firm in Uruguay
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