Taxes when selling lots in Paraguay: 2.4% withholding
If a subdivision company sells your lots in installments, it collects on your behalf and withholds taxes on each installment. The SET set those withholdings in General Resolution 35/2020. Here we summarize them with examples. It is a reference for planning: check with your accountant whether the rule is still in force and how it applies to your case. We also cover it in subdividing with a partner, by service or with management.
Who it applies to
The resolution applies when the sale of lots in installments is carried out by subdivision companies, real estate managers or agency companies. They act as withholding agents and must give the owner the withholding certificate.
The withholdings
Resident individual
IRP withholding of 8% on a base of 30% of the installment, giving an effective 2.4%. It is a single and final payment. No VAT is withheld from the owner. There is no need to register for the RUC just for this income.
Resident company or legal entity (IRE)
Withholding of 2.4% of the installment value without VAT, on account of the IRE. The owner issues a sales receipt with VAT for each installment collected.
Non-resident
INR of 15% on a net income of 30% of the value without VAT (4.5% effective) and VAT of 5% on 30% of the price without VAT (1.5% effective). A single and final payment of both.
Co-ownership
The income is attributed to each co-owner in proportion to their share, and the withholding is made accordingly.
Illustrative example, only to show the calculation: with an installment of Gs. 1,000,000 and a resident individual owner, the withholding would be 2.4%, that is Gs. 24,000, and the rest goes to the owner.
Documents for each installment
- Sales receipt with VAT included for the transfer of the property.
- Self-invoice in the owner's name.
- Withholding certificate (IRP, INR or VAT as applicable).
- Sales receipt with VAT for the subdivision company's commissions.
These sales under the subdivision regime are not subject to withholding by the notary (art. 10 of the resolution).
Municipal taxes
In addition, Law 3966/10 includes among municipal taxes the subdivision tax and the tax on transfer of ownership of real estate (art. 152). The rates are set by each municipality's tax ordinance.
What it means for your project
When calculating how much you will receive for each lot, deduct the withholding and the transfer costs (half for each lot borne by the seller, art. 249), the construction costs and the rest of the structure. We do not publish returns: it depends on your numbers. To organize those numbers, start with the economic feasibility of the subdivision, and if you need someone to run the whole project see project management.
Frequently asked questions
What withholding applies if a company sells my lots in installments?
Under General Resolution 35/2020, a resident individual has an effective 2.4% withheld on each installment collected, as a single and final payment.
And if I am a non-resident foreigner?
The resolution sets an INR (non-resident income tax) of 15% on 30% of the value (4.5% effective) plus VAT of 5% on 30% (1.5% effective).
Do I have to register for the RUC?
An individual who earns income only from selling properties through these companies is exempt from registering for that obligation.
Is the resolution still in force?
It is the one we consulted, in force since March 2020. Check with your accountant whether it has been amended and how it applies to your case.
Sources
Notice. Informational content with rules consulted on 09/29/2026. Deadlines and values are indicative and vary by municipality and service provider; always confirm with the municipality or the relevant body. It does not constitute legal, tax or engineering advice, nor a promise of profitability. Last updated: September 30, 2026.