Spanish-speaking Peru is located in western South America. It shares a border with Ecuador, Colombia, Bolivia, Chile, and the Pacific Ocean.
Its Andean mountain range runs parallel to the sea and the mountains define 3 geographically defined regions that are used to describe the country, coast, highlands, and forest.
Peru has extremely high biodiversity and the unique combination of tropical latitudes, mountain ranges, topographic diversity, and two ocean currents gives Peru a large diversity of climates.
With 30.4 million inhabitants and a growing population, Peru is truly multi-ethnic, resulting in a country welcoming foreign residents and investors, and home to a tantalizing array of cultural traditions, artistic offerings, and food.
Peru’s Real Estate Economy
Peru of South America recently looked for opportunities in moving economies for property investors and second home hunters on the global radar. The reason for this is that Peru generated an annual GDP growth rate of 6.4% on average between 2002 and 2012, resulting in Peru continuing to attract strong international attention in the real estate economy.
- Foreign buyers are allowed the independent title to the majority of real estate in Peru without the need for government approval.
- Experts predict that Peru’s property market today is strong in key hubs such as Lima and Arequipa and is appealing for long-term growth, especially for investors.
- An attractive infrastructure project for foreign investment in Peru is helping to make it an attractive prospect.
- From geographical plains to the peaks of the Andean Mountains, and from tropical forests to South Pacific beaches, Peru’s real estate includes domestic and commercial demand in many places.
- Economically and politically speaking Peru has made massive progress in recent years, giving investors and expatriates confidence to consider this emerging market. The country’s previous surcharge on mineral diversities is being resolved through strategic diversification.
- Consumer confidence in Peru is highest for the Latin American region, and local demand for real estate underpins a property economy that has also shown a strong commitment to Spanish, Chilean, American, and Chinese buyers.
Peru Real Estate Market
After a decade of rapid growth, Peru today is witnessing an economic slowdown due to pressure on its large mining sector. Naturally, this cooling has affected the Peru real estate market.
- Local property experts recommend that this is a positive for the Peru real estate market as it will protect it from speculators and over-development.
- Reducing long-term prospects for the property are several positive factors such as increasing purchasing power for a growing local population, and increasing international interest to live and invest in Peru.
- The Government of Peru considers national development of limited travel and tourism potential for economic diversification; This, in turn, provides real estate investors with an emerging market opportunity, unmatched regional potential.
- Scotiabank recently analyzed the real estate market in Lima, Peru, and concluded: “Growth has reached an explosive pace before 2013 [to a level] that is still stronger, but more sustainable.”
- The ongoing strong demand for real estate is supported by the fact that private consumption and public investment are projected to remain flexible due to the rising middle class, increased foreign investment, and infrastructure spending in commitments.
Real estate taxes, and business in Peru
You do not have to be a resident to purchase Peru’s real estate, and foreign buyers are allowed the free title to most of the land and property in Peru.
- Real estate-related restrictions exist close to Peru’s national borders. Foreign buyers require government approval for such property.
- Only foreign buyers cannot buy real estate in the vicinity of government establishments and military bases.
- The cost of round trip real estate in Peru is very modest, ranging from 6 to 9%, with fees of only 3 to 6% for buyers. Additionally, the entire procurement process can proceed very quickly.
- Investors should be aware of the relatively high taxation on non-resident real estate investment income, however, which is taxed at the rate of 30%.
- Leased real estate may be subject to 18% VAT. VAT when levied on rented properties in Peru for individuals or corporations, resident or not.
- The yield on residential properties in the in-demand apartment stock in Lima is strong, ranging from 6 to 10%.
- Prospects for commercial real estate are very positive as demand is rising, supply is increasing, and set to advance in everything from retail to warehousing to logistics.
- Tenant laws are tenants because of the tenant’s safety; however, the rental rates at the beginning of the contract are freely negotiable. The increase needs to be included in the contract otherwise they are not allowed until the contract ends.
- Real estate experts in the country are forecasting a 2-3% increase in office and retail rental rates in Lima in 2016 due to rising demand and space restrictions.
Peru Property Investment Visa
As a foreign buyer in Peru, you do not need a visa to purchase the property. Additionally, Peruvian residents of the US, Canada, UK, and Australia can enter for a trip on a visa-free tourism visa for 30 to 18 days.
The diversification of landscape, geography, and climate in Peru is reflected in diversity in terms of the types of visas available for visiting or residing in Peru. For example, there is a specific travel visa class for an artist and a specific residency visa class for members of non-Catholic religious associations!
- The most commonly used visa class by foreign nationals wishing to reside in Peru is a person with a foreign income source (Rentista) visa.
- To be eligible, you need a foreign-based permanent monthly income of at least $ 1,000 per applicant and certified proof of dependency per $ 500.
- Income must be sent to Peru and certification must be in Spanish.
- If the certificate is manufactured outside Peru, it must be legalized in the Peruvian Consulate protected by the relevant Consulate General of Peru.
- Foreign investors wishing to invest in Peru can apply independently for the Independent Investor Visa category.
- In case of transfer of stock ownership, acceptable proof of stock transfer will also be required.
- Alternatively, for a brand new investment in a newly formed company, study the viability of your business or, in the case of a working business, your business for two years, two to build two employment positions Year plan will be required.
- It is possible for foreign residents to obtain a work permit in Peru if they want or want to obtain employment locally.
Peru Real Estate Market Interests
Organized in the valleys of the Chillan, Remake, and Lurin rivers in the central riverine part of Peru, Lima faces the Pacific Ocean.
Lima is the capital and largest city of Peru; It is also the center of the recent growth in the interest of the international real estate investor. Demand for Lima Peru real estate remains strong for residential units to rent and buy from local and foreign interests; The reason for this is strong business and employment opportunities in Lima, and more recently due to the appreciation rate of property shares.
Although many believe that the rate of growth in the residential market has now slowed to modest levels, the demand for commercial property will continue to support price gains. Lima is a stunning capital that boasts everything from high historical, high-class modern denominations to stunning historical buildings for renovation and remembrance.
Popular residential districts include San Isidro, Miraflores, San Borja, Serco, Chorillos and Barrenco.