Buying Property in Guatemala: a How To Guide

If you are considering starting business in Guatemala, buying property rather than renting is something you will want to consider. Because with local regulations allowing foreign investors to purchase, maintain, and sell real estate with almost no restrictions, buying a property in Guatemala can be a good investment.

Aereal view of Guatemala City
Aereal view of Guatemala City, the country’s capital

Guatemala’s gross domestic product (GDP) has experienced almost continuous growth over the past 35 years, reaching $76.7 billion (all figures in USD) in 2019. That same year, the nation’s gross national income (GNI) — a key indicator of prosperity — reached $4,610 per capita, placing Guatemala at the lower end of upper-middle income nations.

Guatemala has the largest economy among Central American nations and the fastest-growing market among the three nations of the ‘Northern Triangle,’ which also includes El Salvador and Honduras. With seaports on its Caribbean and Pacific coasts, Guatemala is also a key trade hub for the region, accounting for more than 30% of Central America’s trade flows.

The country has several free trade agreements (FTAs) in place, including with the United States, the European Union, and many key Latin American markets. Some of the country’s top exports include metals, oil, timber, coffee, and bananas, and its principal export destinations include El Salvador, Canada, Mexico, Nicaragua, and the United States.

Read on to understand more about buying property in Guatemala, or go ahead and reach out to us now.

Buying property in Guatemala: key considerations

Compared to other markets in the region, or beyond Latin America, real estate in Guatemala is an affordable option that offers good returns. Property maintenance costs are also low, as are annual real estate taxes. All of this makes buying property in Guatemala a profitable and popular investment. However, when doing so, it is important to consider the following:

Woman counting money, representing a person buying property in Guatemala.
Buying property in Guatemala involves several taxes

Property type and location: Whether you are a business owner looking for a commercial site or a foreign investor looking for a buy-to-rent opportunity, you will need to consider exactly what suits your needs best.

Property maintenance: If your home will be unoccupied for long periods of time, you should consider the upkeep of your property. You may want to pay for vacant home insurance, which will provide financial protection against damage to or loss of a vacant property.

Tax compliance: Although property taxes are relatively low in Guatemala, it is essential to understand and meet all tax requirements to avoid any legal complications that can jeopardize your investment.

Professional advice: When buying real estate in Guatemala, it is strongly recommended to engage with a local and trusted legal adviser, who will represent you during the property-buying process. As well as considering all of the above points, a legal adviser will be able to review the status of the land title, and examine all legal documents to identify any pending bills or issues with the property.

5 steps to purchase a property in Guatemala

When buying property in Guatemala you will follow these five key steps:

Step 1: Choose the property:

With expert advice based on your needs and resources, you will choose a property that best meets your needs.

Step 2: Draft a Sales and Purchase Agreement (SPA)

With support from your legal counsel, you will need to draft an SPA according to local conventions.

Step 3: Conduct due diligence:

Your legal adviser should engage in a comprehensive due diligence process to ensure there are no legal problems with the property.

Step 4: Closing

Once all of the previous steps have been carried out, the payment of the property must be made and a transfer deed signed by both parties.

Step 5: Register the property

After closing has occurred, a copy of the transfer deed should be sent to the Public Registry to inform them of the change in ownership of the property.

Costs when buying property in Guatemala

Aerial shot of houses on an island, representing the properties available for those interested in buying property in Guatemala.
Coastal properties carry an additional fee
  • Although buying property in Guatemala can be considerably cheaper than in other markets, it is important to know what you will be liable for. Here are some of the main costs to consider when purchasing property in the country:
  • Registration fee: costing around 0.15% of the property value
  • Legal fees: equal to around 1% of the property value
  • Value-added tax (VAT): sits at 12%, making Guatemala’s VAT rate one of the lowest in the region. When purchasing a property, VAT of 12% will be levied on the sale
  • Stamp duty: this is a flat rate of 3% which is levied on the subsequent sale or transfer of properties
  • OCRET payments: any property facing a body of water in Guatemala is administered through the Office of Control of Territorial Reserve Areas of the State (OCRET). For these properties an annual fee must be paid to Ocret. As of February 2021, that fee stood at less than $100 per year.
  • Corporation filing fees: if you are buying property as part of a company formation in Guatemala, you will have to pay the filing fees for the new company

Biz Latin Hub can help you invest in Guatemala’s real estate market

At Biz Latin Hub, our experienced team of corporate lawyers is equipped to help you make the best decisions when buying a property in Guatemala, vigorously representing your commercial interests and eliminating risks. With our full portfolio of commercial accounting and tax advisory services, we can be your single point of contact to invest in the real estate market in Guatemala, or any of the other 15 countries across Latin America and the Caribbean where we operate.

Contact us now for personalized assistance or a free quote.

Learn more about our team and expert authors.

Market entry and back-office services offered at Biz Latin Hub.
Market entry and back-office services offered at Biz Latin Hub

The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
Legal Team Guatemala
Legal Team Guatemala

Legal Team Guatemala is the Biz Latin Hub leading experts on doing business in Guatemala The Team writes on the news, doing business, law, and changing regulations. The team are experts in corporate law, Administrative law, Employment law, Immigration law and legal advisory services. Read more about them here. You can contact Legal Team Guatemala via our "contact us page".

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