Paraguay Real State

Paraguay Real Estate: High Returns Attract Foreign Investors

High returns on offer in the Paraguay real estate market has seen it attract increasing interest among foreign investors over the past year, according to local reports.

View of a castle in Paraguay, where investors are showing increasing interest in real estate
Carlota Palmerola Castle in Paraguay

According to Alfredo Rilla, director and co-founder of Petra Urbana, a real estate company based in the Paraguayan capital Asuncion, returns are often more than 50% higher than those seen in other real estate markets in the region.

“While profitability in Uruguay and Miami is on average 6%, in Paraguay those figures hit between 9 and 11%, and in the case of a temporary rental those numbers can reach a yield of 14%,” Rilla was reported as saying.

That has reportedly seen an influx of Argentinian property investors entering the Paraguay real estate market, with their home country facing economic turmoil, with Rodilla stating that up to 60% of his clients are from neighboring Argentina.

SEE ALSO: How to Incorporate a Company in Paraguay

According to Rilla, the values of property per meter squared in Asuncion are some of the lowest in a major city in South America, at $1,300 per m2 (all figures in USD).

“Today we sell a 30 m2 studio on the 28th floor for $54,000, two bedrooms for $62,000, and three for a price of $110,000,” he was reported as saying. 

Those prices are bolstered by a low property tax regime, with VAT set at 10%.

According to Rilla, many of those investing have not even stepped foot in Paraguay and make the purchase with the intention of arranging rentals online. In many cases, properties are rented out within 20 days of going on the market. 

A resale is also a popular option among Paraguay real estate investors, with properties bought on plan typically generating 15 or 20% yields when sold upon completion — typically 24 to 30 months after the initial purchase.

According to Gonzalo Faccas, managing partner and developer at Paraguayan real estate firm Eydisa, purchasing commercial property for rental is also a lucrative option that is popular among foreign investors. 

“The corporate office market has an annual net profitability of 7% in dollars,” Faccas said, explaining that it is popular among foreign investors because it requires less interaction with the tenant and often involves long-term contracts with little risk of default.

Paraguay real estate a route to residency 

The Paraguay real estate market offers just one option to obtain residency in the country — a popular choice among foreign investors owing to the country’s low-tax regime.

The process for obtaining residency in Paraguay is fast and straightforward and can be completed in as little as three months. Recently the country upped the deposit involved in processing the visa associated with a permanent residency from $3,500 to $4,600.

However, it still remains one of the fastest and most cost-efficient processes on offer in Latin America for receiving resident status.

Another major attraction of achieving residency is that after three years of resident status, the residency holder is eligible for citizenship — application for which is bolstered in the case of holding the Paraguay real estate, especially when the applicant has not been continuously present in the country during that period.

Real State in Paraguay

Biz Latin Hub can assist you doing business in Paraguay

At Biz Latin Hub, our multilingual team of commercial support experts is equipped to assist you in doing business in the Paraguayan market and investing in Paraguay real estate. With a complete portfolio of back-office services, including company formation, legal, accounting, and recruitment services, we can be your single point of contact for entering the market and operating in Paraguay or any of the other 18 markets in Latin America and the  Caribbean where we have teams in place.

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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.
Craig Dempsey

Craig Dempsey

Craig is a seasoned business professional in Latin America. He is the Managing Director and Co-Founder of the Biz Latin Hub Group that specializes in the provision market entry and back office services. Craig holds a degree in Mechanical Engineering, with honors and a Master's Degree in Project Management from the University of New South Wales. Craig is also an active board member on the Australian Colombian Business Council, and likewise also active with the Australian Latin American Business Council.

Craig is also a military veteran, having served in the Australian military on numerous overseas missions and also a former mining executive with experience in various overseas jurisdictions, including, Canada, Australia, Peru and Colombia.

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