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Buying an apartment in Uruguay

By David Hammond 
Apartments across from Pocitos Beach in Montevideo, Uruguay 

The purpose of this article is to help prepare you to buy an apartment in Uruguay. It covers...
  • where to find apartments for sale
  • how to choose your apartment-buying team
  • and recommended due diligence 
In Uruguay, an apartment is an individually owned residential unit. It's the same as a condominium unit in North America.

You'll find the largest concentration of apartments in Uruguay's capital, Montevideo. The second greatest concentration of apartments is in the beach resort town of Punta del Este.

The information presented in this post is based on my personal experience buying apartments in both Montevideo and Punta del Este.


Where to find apartments for sale 


Your real estate agent 
Many real estate agents see their job as promoting their own company’s listings. However, you'll find some buyer’s agents willing to cooperate with others to find the best property for their client’s needs.

Real estate websites  
While you won't find a multiple listing service in Uruguay, you will find real estate websites that aggregate the listings of many brokers. One of the largest is Apartamentos.com.uy.

Link: How to search for Uruguay real estate on a Spanish language website 

Note: Keep in mind a 'sold' apartment may still display a 'for sale' status on real estate websites. This is often because several offices list the same apartment and when one office gets an accepted offer, they don't  notify other offices.

Newspaper classified ads 
The most popular Uruguay newspaper for property classified ads is El Pais, which also shows properties advertised in their paper online.

For sale signs
Many apartment sellers in Uruguay put a “For Sale” sign (en venta) in the window as their primary means of advertising.

So, if you've decided on a neighborhood you want to live in, visit it frequently and be on the lookout for signs.

Building Porters  
Building porters are often among the first to know about a new apartment coming on the market.

So, if you've decided on specific buildings where you'd like to own an apartment, talk to the porters who work there.

Apartments near the Punta del Este marina | image by David Hammond

Choosing your apartment buying team 


The basic apartment-buying team in Uruguay includes:
  • a real estate agent
  • an architect
  • an escribano (often referred to as a notary) 

Real estate agent 
In another post, I stress the importance of choosing a good real estate agent so you don’t end up using an agent simply because they happened to advertise a property you inquired about.

By 'good real estate agent' I mean one who is knowledgeable, well connected, competent, and is looking out for your best interests.

The best place to learn about a good real estate agent in Uruguay is recommendations from satisfied clients who've purchased a property with the agent.

In Uruguay, the buyer and seller each pay their own ‘side’ of the real estate commission. I've observed commission rates of 3% from the seller to the listing office, and 3% from the buyer to the company that represented him or her (for a total of 6%).

If a party buys through the listing broker, that listing broker will usually collect both sides of the commission.

Also, the real estate agent’s commission is subject to a 22% value-added tax.

Architect 

In Uruguay, the professional who evaluates a property's condition is usually an architect.

Escribano
The Escribano (or notary) is the professional a buyer hires to check the property's title, draft the sales documents, and make sure everything is recorded properly.

Escribanos charge a percentage of the purchase price for their services. The most common rate I've observed is 3%, plus a 22% value-added tax.

Note: When buying an apartment, it's important to have direct and clear communication with each member of your team. So, if you're not fluent in Spanish, use the services of a bilingual real estate agent, architect, and Escribano.

Apartments in Montevideo's Centro | image by David Hammond


Due diligence--my five-step process


Following is the five-point checklist I use once I've identified an apartment of interest.

1. Talk to apartment owners in the building
Introduce yourself to a few apartment owners. Let them know you're considering buying an apartment in the building and are interested to learn how it's gone for them.

Specifically, ask about their experience with the property’s administrator, the entity that manages the building’s upkeep, hires porters, and pays the common expenses.

2. Talk to the property administrator 
After you learn about the experience of a few apartment owners, speak with the property’s administrator to:

  • Confirm the amount of the gastos comunes (common expenses) (like HOA fees) and what services they cover. 
  • Ask about the homeowner association’s solvency. Are the building's maintenance needs adequately funded by the owners? 
  • Ask about any lawsuits or pending lawsuits against the homeowners association? Such a legal action would likely be discovered by the escribano. However, finding out sooner may saves you time and trouble. 
  • Learn if the administrator foresees any special assessments? Special assessments are levied to each apartment in a building to cover large unbudgeted costs.  


3. Determine ownership costs 

Gastos Comunes 
As mentioned, gastos comunes are the common expenses shared by apartment owners or apartment tenants.

Gastos comunes pay for lighting the common areas, building upkeep, landscaping, and normal maintenance. The gastos comunes also cover wages for the building staff, such as porters, and administration costs.

Heating 
Winter heating is a significant cost that varies greatly depending on the apartment and the heating source. So, it's a good idea to check a unit's heating cost history.

If a history of heating costs isn't available (as is the case with a new apartment) then ask about similar types and sizes of apartments with similar heating systems to get an idea.

Taxes
The main property tax in Uruguay is the Contribución Inmobiliaria (real estate contribution), which is a local municipal tax. You also have the Impuesto a la Enseñanza Primaria (primary education tax).

These taxes are based on registered values determined by the government, which are different than a property's market value.

To determine the registered values and tax rates for the apartment you're considering, make a visit to the local government office of Dirección Nacional de Catatastro.

Note: In Montevideo, there is also a residential tax and sanitation fee.

Wealth tax 
Uruguay has a tax of assets, Impuesto al Patrimonio, which can include real estate.

This tax is based on a percent of the property’s registered fiscal value, after adjustments, and is paid annually.

It is only owed for properties over a certain registered fiscal value, and if it's your principal dwelling, the tax is based on half of the registered fiscal value.

This tax is a little complicated because it is based on a graduated tax bracket, has a different threshold for single persons and married couples, and has different rates for properties owned by a local or foreign corporation.

The Impuesto al Patrimonio rate is very low and most properties will fall below the minimum threshold. There is even talk that it will be phased out. But, if you're buying a high-end property it is worth knowing about.

4. Visit the property with your architect to evaluate the apartment and building condition 
Even if you don’t have any specific concerns about an apartment or the building it's still prudent to have it checked.

5. Ask your escribano to briefly review the seller's property records before signing an agreement and putting up a deposit
In Uruguay, it's the responsibility of the owner to hold certain records and documents associated with their property going back 30 years.

When a property is sold, those records are given to the buyer's escribano for review, and then passed onto the buyer to hold, when the sale is complete.

While it often takes 30 or more days for the escibano to fully review the seller's documents and public records and prepare the paperwork, a brief preliminary review of the seller's documents can uncover any glaring issues that could prevent a successful transaction.

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