Mistake 1: not verifying the property title
This is the most serious mistake, and the one with the heaviest consequences. Part of Peru's housing stock suffers from incomplete or disputed titles, or titles not registered with the Registros Públicos (the public land registry). Buying a property with an unclear title exposes you to costly legal proceedings, or even the loss of your investment.
Before signing anything, it is essential to consult the property's Partida Registral at SUNARP (Superintendencia Nacional de los Registros Públicos). This document traces the ownership history, charges, mortgages and easements. The search is public and inexpensive. Skipping it is inexcusable.
Mistake 2: buying without a trusted local representative
Buying an apartment in Lima from Geneva or Paris, without ever having set foot in the property or having a representative on site, is a major risk. Photos and online descriptions may not match reality. The property's actual condition (structure, wiring, plumbing), the neighbourhood, noise or humidity exposure: all impossible to assess remotely.
Swiss Lima Property systematically carries out a physical visit of the property, gathers the necessary documents and flags any points to check. The cost of this support is far lower than the consequences of a bad acquisition.
Mistake 3: underestimating acquisition costs
Acquisition costs in Lima include the Alcabala tax (approximately 3% of the property's value above the first 10 UIT, threshold and exceptions to verify with SUNAT), notary fees, registration fees at the Registros Públicos, possibly lawyer or advisory fees, a real estate agency commission (3% to 5%, buyer/seller split varies by agreement) and international bank transfer fees. In total, costs generally represent 4% to 7% of the purchase price as an indication, depending on the structure of the transaction.
An investor who doesn't plan for these can run short of cash at signing. Always calculate your budget including these costs from the outset, and verify the exact amount with a local professional.
Mistake 4: overlooking SUNAT/RUC tax identification
The RUC (Registro Único de Contribuyentes) is Peru's tax identification number. Depending on the transaction, tax status and obligations related to renting or reselling, a foreign buyer may need to obtain one from SUNAT. For non-residents, the procedure is specific; the exact modalities (physical presence, representative, required documents) must be anticipated with a notary or local lawyer well before signing the deed.
Don't discover the possible need for this step at the last minute: if your situation requires it, start the SUNAT tax identification process as soon as you have identified the property you wish to acquire; confirm the modalities with the notary and a local lawyer.
Mistake 5: confusing the listed price with actual market value
Prices listed on Peruvian property portals (Urbania, Adondevivir) are asking prices, not transaction prices. There is often a significant gap between the listed price and the price at which properties actually sell, especially in the resale market. This gap can range from 5% to 20% depending on the district, the type of property and market conditions at the time of the transaction.
A local agent or advisor with access to actual transaction data is essential to assess whether an asking price is realistic.
Mistake 6: ignoring applicable Peruvian taxation
Many first-time investors discover Peruvian taxation only after signing. Under SUNAT rules applicable to non-domiciled individuals, when the tenant is domiciled in Peru, rental income from property in Peru generally appears to be subject to a withholding of approximately 5% on gross rental income; modalities differ if the tenant is not domiciled in Peru. Selling a property follows a separate tax regime, to be verified with SUNAT or a Peruvian tax advisor. These rates are subject to change and must be confirmed at the time of investment. This article does not constitute personalised tax advice.
A gross yield of 5% to 6.5% (indicative) does not mean an equivalent net yield. Tax charges, management fees and rental vacancy periods significantly reduce this figure.
Mistake 7: neglecting remote property management
Many investors focus on the purchase and forget that a property investment's value is realised over time, through property management. A poorly managed apartment deteriorates, generates conflicts with tenants and produces lower returns than initially estimated.
Managing a property 10,000 kilometres away without a trusted local partner is a frequent source of disappointment. Choosing a property manager should be an integral part of the investment strategy, not an afterthought. See our guide: Property management in Lima: why a local partner is essential.
Avoid these mistakes with dedicated support
Swiss Lima Property accompanies European investors at every step: property selection, title verification, referrals to reliable local professionals and property management coordination. Tell us about your project.
Mistake 8: trusting unsourced or "guaranteed" yields
The internet is full of articles promising yields of 8%, 10% or more in Lima. These figures are rarely sourced, often based on unrepresentative special cases, and sometimes deliberately misleading. No property yield is ever guaranteed.
Available data (GlobalPropertyGuide, Adondevivir) puts indicative gross rental yields in Lima at around 5% to 6.5% in premium districts, never guaranteed. Gross, not net. Indicative, not contractual. Be wary of anyone who promises you a fixed or "secured" return.
Mistake 9: underestimating liquidity risk
Real estate is an illiquid asset everywhere in the world. In Lima, this is even more pronounced for a non-resident foreign seller: local buyers with bank financing outnumber international cash buyers, and the market can be slow depending on conditions.
Only invest in Lima capital you do not need in the short or medium term. An investment horizon of at least 5 to 7 years is generally recommended to amortise acquisition costs and allow enough time to sell under good conditions if needed.
Mistake 10: not anticipating the tax impact in your country of residence
Rental income earned in Peru does not stop at the Peruvian border. In Switzerland, France or Belgium, tax residents are in principle taxable on their worldwide income. Peruvian income must be declared in your country of residence, taking into account applicable tax treaties.
Switzerland has concluded a double taxation agreement (DTA) with Peru, in force since March 2014. Its practical application to your personal situation (rental income, capital gains) must be validated by a Swiss and Peruvian tax advisor. For France, the treaty status with Peru should be verified with the French tax authorities at the time of investment, as the situation may evolve. In all cases, consult a qualified tax advisor in your country of residence before investing.
How Swiss Lima Property helps you avoid these mistakes
Our role is precisely to support foreign investors through this process: property identification, title verification, introductions to trusted notaries and lawyers, and referrals to property management partners. We do not guarantee returns and we do not sell dreams, we help you move forward with method.
To discuss your project: contact us. To learn more about the purchase process: Buying property in Lima as a foreigner.