Renting out a property in Uruguay can be an excellent way to generate passive income. However, like any income, it also has tax implications. Whether you own an apartment in Montevideo, a house on the coast, or a commercial space downtown, you’ve probably wondered:
What taxes do I have to pay if I rent out my property?
In this article we explain it to you in a simple way and updated to 2025.
What type of rental do you have?
Before discussing taxes, it’s important to distinguish between the types of rentals you’re making, as they aren’t all taxed the same way:
- Rentals to individuals (private tenants)
2. Rentals to businesses or professionals (commercial use)
3. Rentals to tourists or seasonal rentals (Airbnb, Booking.com, etc.)
The tax treatment varies depending on the type of contract, the property’s use, and the taxpayer’s status (resident or non-resident).
What taxes are paid?
- IRPF (Personal Income Tax)
This applies if you are a tax resident in Uruguay and rent a property as an individual.
- Tax rate: 10% on net income (income less the 30% deemed deduction).
- Filing: can be done monthly with withholding, or annually with a lump sum payment.
- If the contract is registered with the Ministry of Housing, Territorial Planning and Land (MVOT), and the tenant pays through BROU (Banco de la República Oriental del Uruguay) or other authorized payment methods, the Personal Income Tax (IRPF) is automatically withheld.
Example: If you receive $20,000 in monthly rent, 8.4% is withheld (equivalent to 10% on 70% of the total amount).
2. VAT (in certain cases)
- Residential rentals are exempt from VAT.
- Rentals for commercial purposes are subject to VAT (22%).
- VAT may also apply if you rent as a business or provide additional services (cleaning, furnishing, etc.).
3. IRNR (Non-Resident Income Tax)
If you are not a tax resident in Uruguay, and you own a rented property, instead of IRPF you pay IRNR.
- Tax rate: 10.5% of the total rental amount.
- The tenant must act as a withholding agent, or you must appoint a tax representative in Uruguay.
4. Property Tax and other municipal taxes
- Property Tax: Paid annually by the owner, based on the property’s assessed value.
- Sewerage Fee (OSE/Municipality): May or may not be passed on to the tenant, depending on the lease agreement.
How is it submitted and paid for?
- If you are registered as a landlord with withholding tax: the tenant pays at BROU or via RedPagos, and the Personal Income Tax (IRPF) is automatically withheld.
- If there is no withholding tax, you must file monthly or annual tax returns with the DGI (General Directorate of Taxation).
- If you are a non-resident: the withholding agent must file and pay the Non-Resident Income Tax (IRNR).
