Guatemala Property Ownership

All forms of investment will be protected, including enterprises, debt, concessions, contracts and intellectual property. U.S. investors will enjoy, in almost all circumstances, the right to establish, acquire and operate investments in Guatemala on an equal footing with local investors. Among the rights afforded to U.S. investors are due process protections and the right to receive a fair market value for property in the event of an expropriation. Investor rights will be backed by an effective, impartial procedure for dispute settlement that is fully transparent. Submissions to dispute panels and panel hearings will beopen to the public, and interested parties will have the opportunity to submit their views (ustr.gov, 2006). The CAFTA-DR will establish a more secure and predictable legal framework for U.S. investors operating in Guatemala. All forms of investment will be protected, including enterprises, debt, concessions, contracts and intellectual property. U.S. investors will enjoy, in almost all circumstances, the right to establish, acquire, and operate investments in Guatemala on an equal footing with local investors. Among the rights afforded to U.S. investors are due process protections and the right to receive a fair market value for property in the event of an expropriation. Investor rights will be backed by an effective, impartial procedure for dispute settlement that is fully transparent. Submissions to dispute panels and panel hearings will be open to the public, and interested parties will have the opportunity to submit their views (National Trade Report, March 31, 2006).

Guatemala Transaction Information

There is no licensing requirement in Guatemala though a decree licensing persons who earn
"commissions" exits. One of the biggest challenges facing the real estate industry in Guatemala
is the lack of recognition as an organized trade by the maretplace (realtor.org, January 2002).

Guatemala Trade Associations

Gremio de Bienes Raices adscrita a la Camara Guatemalteca de la Construccion (CGC-GBR) (Real Estate Comission of the Guatemalan Chamber of Construction)
Ruta 4, 3-56, Zona 4, Apdo.
Postal 2083 Guatemala City
GUATEMALA
Tel: 502-334-5233; Fax: 502-331-5214
E-mail: slsiegel@intelnet.net.gt
Website: http://www.cgc.guatemala.org/
President: Ms. Sara L. Siegel

Guatemala Land Rights

Guatemala has a serious problem with the inequality of land distribution, an issue that was a significant motivating factor in its recently ended 30-odd year civil war. The only other countries in the world with such inequality in land ownership are Brazil and Pakistan. Land has been the source of political conflict for generations, since the colonial and then republican governments divided up the land of Guatemala's indigenous people to reward and maintain the loyalty of their supporters.1 According to Consuelo Cabrera, from the National Co-ordination of Small and Medium Producers (Conampro) of Guatemala, 2% of the population of Guatemala own large tracts of land, while 98% own no arable farmland at all. Due to this disparity, Guatemalan rural worker's organizations have been seizing unused estates with the intent of making the government purchase the land and distribute it in small farm-holdings. As of 1996, however, 300 estates had been occupied, but the government had agreed to the purchase and redistribution of only six (realtor. org, January 2002).

Guatemala Real Estate Info Summary

Property Taxes:

Tax rate for resident companies Companies may be taxed under the Withholding Tax Regime or the Optional Tax Regime. Under the Withholding Tax Regime, companies are subject to tax at a rate of 5% on their taxable income. Taxable income is defined as the difference between gross income and exempt income. Consequently, unless the income is exempt, companies are subject to a 5% definitive withholding tax on their gross income. No deductions are allowed.

Alternatively companies may elect the Optional Tax Regime. Under this regime, companies are subject to tax at a rate of 31% on their taxable income, which is their net income. The Optional Tax Regime is subject to several conditions, including additional mandatory reporting to the tax authorities.


Taxe rate on long-term capital gains Capital gains are taxed at a rate of 10% under the Withholding Tax Regime. Under the Optional Tax Regime, capi- tal gains are taxed at a rate of 31%. Capital losses may be carried forward for five years to offset future capital gains. Most importantly, property tax rangers 0 to 0.9% . (FITA Profiles, 2003).

Guatemala Mortgages & Financing

The real estate market is challenging due to the fact that mortgage financing is not available or extremely expensive, up to 20% (realtor.org, January 2002).