Double-digit rental yields, rising prices, low taxes – that is how many offers for property in Paraguay sound. Some of it is true, some of it is a gross calculation missing half the costs. This article does the honest maths: what a rented residential property in Paraguay actually earns, which purchase costs and taxes apply, and which risks no glossy brochure mentions.
This article provides a general overview and is not investment or tax advice. Past returns are no guarantee for the future.
What rental yield is realistic in Paraguay?
For apartments in Asunción, market reports on long-term letting mostly cite gross yields of around six to eight percent a year, and more in sought-after areas such as Villa Morra or Carmelitas. After deducting vacancy, maintenance and management, net yields are typically four to six percent. Short-term letting via platforms can achieve higher figures, but it is more work, seasonal (peaks mainly in July and August) and more volatile.
Reliable official rental statistics hardly exist in Paraguay, and international databases do not list a house price index for the country either. Treat every yield figure as an estimate – and for a specific property ask for documented rental income, not expected income.
Which purchase costs apply?
Purchase costs in Paraguay are much lower than in many European countries because there is no property transfer tax. The main items are:
- ✓Notary (escribano): the fee is governed by the notarial tariff (Ley 1307/1987) and in practice amounts to about 1 to 2.5 percent depending on the price, plus 10 percent VAT. The buyer usually chooses and pays the notary.
- ✓Registration (since 2026: RUN): around 0.2 to 0.5 percent.
- ✓Title check and legal advice: a fixed fee agreed in advance – money well spent.
In total you should budget three to four percent of the purchase price. How the notarial process works is explained in the article on the Escritura Pública.
How is rental income taxed?
Rental income of a private individual falls under Paraguay's personal income tax IRP, in the capital income category (IRP-RGC). The rate is 8 percent. The tax base is generous: the lower of two values is used – either the actual net rent (rent minus property tax, maintenance and management) or a flat 50 percent of the rent. The tax burden is therefore at most 4 percent of the gross rent.
Value added tax is added on top: under tax law Ley 6380/2019, the reduced rate of 5 percent applies to the letting of property used exclusively for housing. It is added to the rent and thus borne by the tenant – but you must invoice and pay it correctly. Important: anyone who lets property must register with the tax authority DNIT at the start of the letting, not only once an income threshold is reached. An overview of the tax system as a whole is given in the article on the 10-10-10 tax system.
On an ongoing basis there is also property tax: one percent of the fiscal value (valor fiscal), which the government adjusts annually for inflation – by 4.1 percent for 2026. The fiscal value is usually well below market value. Details are in the article on property tax in Paraguay.
If you remain fully taxable in your home country, you may also have to declare the rental income there. Check whether your country of residence has a double taxation agreement with Paraguay – Germany, for example, does not. This is a question for your tax adviser before you buy.
A worked example
The following figures are assumptions for illustration, not market data for a specific property:
| Purchase price, apartment in Asunción | 120,000 USD |
| Purchase costs (3.5 %) | 4,200 USD |
| Total investment | 124,200 USD |
| Net rent 700 USD × 11 months (one month vacant) | 7,700 USD |
| Management (10 % of rent) | − 770 USD |
| Maintenance and reserve | − 600 USD |
| Property tax (assumption) | − 250 USD |
| IRP: 8 % on 50 % of rent | − 308 USD |
| Net return before home-country tax | 5,772 USD = 4.6 % |
The gross yield in this example is seven percent (8,400 USD annual rent on 120,000 USD). Net, 4.6 percent remains. That is solid – but it is not the figure in the advert. Building service charges (expensas) for common areas are not included in the example. Who pays them is set out in the lease; if they are not passed on to the tenant, the yield falls further.
Which risks should you know about?
Title risk. The biggest risk is not a market risk but a legal one: a property that does not belong, or does not belong solely, to the seller. The German Embassy in Asunción expressly warns about plots sold several times. A thorough title check is therefore mandatory, not optional.
Currency risk. Many rents in Asunción are agreed in US dollars, many costs are incurred in guaraníes, and you probably calculate in your home currency. Three currencies, three exchange rates – that can work for you or against you.
Liquidity risk. The Paraguayan property market is small. A sale can take months, and in some segments – for example new-build apartments in high-rises, many of which come onto the market in Asunción at the same time – you compete with many similar offers.
Management risk. You cannot let an apartment from abroad. You need reliable management on site that selects tenants, collects rent, commissions repairs and handles the tax returns. Its quality decides more about the yield than the location.
Enforcing rights. The embassy points this out too: enforcing claims before Paraguayan courts is often laborious. That also applies to rent arrears. Careful tenant selection and good contracts are the best protection.
Apartment, house or land?
A rented city apartment brings ongoing income but requires management. Land usually brings no ongoing income and relies on appreciation – or on agricultural use, which is a topic of its own. If you think in terms of acreage, you will find the details in the articles on farmland in Paraguay and on buying an estancia. Current regional price levels are in the article on property prices in Paraguay.
For most private investors from abroad, the best investment in Paraguay is often one you can also use yourself – an apartment for the months you spend there that is let the rest of the time, or a plot on which your own house will later stand.
Do the maths, don't repeat the hype
For a specific property we will calculate purchase costs, taxes and realistic returns – and tell you when something doesn't add up. View current properties or contact us directly.
Sources and status: DNIT – IRP Rentas y Ganancias del Capital (fact sheet, rental example); DNIT – Ley N.º 6380/2019; Ley N.º 1307 – Arancel del Notario Público; Ley N.º 5513 (property tax, annual adjustment of fiscal values); ABC Color on the 2026 adjustment of fiscal values; German Embassy Asunción – property transactions (in German); Global Property Guide – Rental Yields Paraguay. Status: September 2026. Not investment, tax or legal advice.
