10 Common Mistakes When Investing in Peru Real Estate

Mistake 1 — Skipping the Partida Registral check

The Partida Registral is the property's official record at SUNARP (Peru's public registry). It records the legal owner, the ownership history, any mortgages, liens or encumbrances, and any ongoing legal disputes. Failing to check it before signing or paying anything is the single most dangerous shortcut a buyer can take.

In practice, this means: before any agreement is signed, have a Peruvian lawyer pull the current Partida Registral from SUNARP and confirm that the seller is the registered owner and that the title is free of encumbrances. SUNARP certificates are publicly accessible at sunarp.gob.pe.

Mistake 2 — No local legal representative

Foreign buyers often assume that relying on the seller's agent or a real estate agency is sufficient. It is not. The seller's agent works in the seller's interest. A local Peruvian abogado (lawyer) working for you will review the Partida Registral, check for pending litigation, verify the seller's identity, review the preliminary agreement and attend the notarial deed.

Legal fees are a small fraction of the purchase price. The cost of not having your own lawyer — in the event of a dispute — can be enormous. This applies even more acutely to remote purchases handled via power of attorney.

Mistake 3 — Underestimating acquisition costs

Many first-time buyers budget only the purchase price and are surprised by the additional costs that come due at closing. The total acquisition cost is typically 4%–7% above the purchase price:

• Alcabala (transfer tax): 3% of the portion above ~10 UIT (~USD 14,000 threshold)
• Notary fees: 0.3%–1% of transaction value
• SUNARP registration: based on property value
• Legal fees
• Agent commission: 3%–5% (may be split buyer/seller)
• International bank transfer fees

Budget conservatively. These costs are not negotiable at closing — have the funds ready before you commit.

Mistake 4 — Forgetting the RUC / SUNAT registration

Foreign buyers are required to obtain a RUC (tax identification number) from SUNAT before the notarial deed can be executed. This step is sometimes discovered only at the last minute, delaying the transaction. Register for your RUC early in the process — ideally as soon as you have identified the property you intend to purchase.

Mistake 5 — Trusting asking prices without negotiating

Lima's property market is less price-transparent than Western European markets. Asking prices on portals (Urbania, Adondevivir) are often set with a negotiation margin built in. The difference between the listed price and the actual transacted price can be significant.

A local buyer's agent or intermediary with market knowledge can help you assess the fair value of a property and negotiate effectively. Never assume the asking price is the market price.

Mistake 6 — Ignoring Peruvian rental income tax

According to SUNAT rules for non-domiciled individuals, rental income from real property in Peru appears to be subject to a withholding of approximately 5% on gross rental income — not the general 30% rate that applies to other income categories. The sale of real property follows its own specific regime. Tax rules may change; verify the applicable rates with SUNAT or a qualified Peruvian tax advisor before proceeding. Many first-time investors discover their Peruvian tax obligations only after receiving their first rent payment.

Additionally, Peru's annual property tax (Impuesto Predial) is payable to the local municipality. A local accountant can help manage these obligations and file declarations on your behalf.

Mistake 7 — Underestimating the need for local management

Managing a Lima rental from Europe without local support is operationally impractical. Tenant screening, lease execution, rent collection, maintenance, utility management, building charge payments and tax declarations all require a local presence. See our guide on property management in Lima for detailed guidance.

The cost of a management fee (typically 8–15% of rents for long-term rentals) is a legitimate operating expense, not an optional extra. Factor it into your net yield calculation from the start.

Mistake 8 — Believing gross yield figures without scrutiny

Gross rental yields of 5%+ look attractive on paper. But gross yield is simply annual rent divided by purchase price — it ignores management fees, Impuesto Predial, building charges, vacancy, maintenance, SUNAT withholding and insurance. The net yield after all deductions is meaningfully lower. Always model your investment on a fully loaded net basis.

Mistake 9 — Discounting liquidity risk

Lima is not London or Zurich. Finding a buyer for your property — especially in a higher price bracket or during periods of political uncertainty — can take considerably longer than in European markets. Plan for a minimum holding period of 5 to 7 years and consider whether you could absorb an extended sale process without financial difficulty.

Mistake 10 — Forgetting home-country tax implications

Rental income earned in Peru may also need to be declared in your country of residence, depending on your domestic tax rules and applicable treaties. Switzerland concluded a double taxation agreement (DTA) with Peru that has been in force since March 2014 — its practical application to your specific situation (rental income, capital gains) should be verified with a qualified Swiss and Peruvian tax advisor. For France, the treaty status with Peru should be confirmed with the French tax authorities at the time of investment, as the situation may evolve. In all cases, you may need to manage tax filings in multiple jurisdictions.

Consult a qualified tax advisor in your home country — not just in Peru — before committing to a purchase.