Taxes When Selling Property in Guatemala
When selling property in Guatemala, you must pay two main taxes:
1. Transfer Tax (Alcabala) — 3%
Calculated on the property's sale price. Legally paid by the buyer, but often negotiated.
2. Capital Gains ISR — 10%
Applied to the net gain (sale price minus acquisition cost and allowed deductions).
Formula
Net gain = Sale price - Purchase price - Improvements - Notary fees - Transfer tax
ISR = Net gain × 10%
Allowed Deductions
- Acquisition cost: Documented original purchase price
- Improvements: Investments in renovations, expansions (with receipts)
- Notary fees: Deed preparation costs
- Transfer tax: The 3% paid
Legal basis
Under Decree 10-2012 (Tax Update Law), capital gains from real estate sales are taxed at 10%. The tax must be declared within the month following the sale.