ALEGALIS examines the impact of Guatemala’s IUSI reform

ALEGALIS examines the main implications of Decree 18-2026 for individuals and companies holding real estate assets in Guatemala, following a reform that changes the treatment of the Single Property Tax (IUSI) according to the use of each property.

The analysis, authored by Mildred María Almengor Roca, Director of the Corporate Law Department at ALEGALIS, focuses particularly on the consequences for owners of multiple properties, as well as businesses and real estate investors.

Decree 18-2026, approved by Congress on July 29, 2026 and published on August 28, reforms Guatemala’s Single Property Tax Law, Decree 15-98.

One of the main changes is the introduction of a zero-per-thousand rate for properties used as housing and for mixed-use properties.

This may include, for example, a residence where a shop, bakery, salon or other small business also operates, provided the property retains its residential character.

According to Mildred María Almengor Roca’s analysis, the reform does not establish a limit on the number of residential properties an owner may hold in order to benefit from the zero rate. An individual owning several homes could therefore benefit from the new treatment as long as the properties maintain their residential use.

ALEGALIS highlights that the key factor in determining taxation will be the property’s actual use rather than simply whether it generates income.

A residential property rented on a permanent basis would retain its residential classification and therefore the zero-per-thousand rate. By contrast, properties used for short-term rentals or tourist accommodation, including those offered through platforms such as Airbnb, may be treated as commercial properties.

This distinction makes proper documentation of the actual use of each property particularly important.

Properties used exclusively for commercial purposes — including offices, warehouses, retail premises and corporate buildings — will remain subject to IUSI under a revised rate structure based on their value.

The regime establishes a rate of 3 per thousand for properties valued at up to Q500,000; 6 per thousand for properties valued above Q500,000 and up to Q1 million; and 9 per thousand for properties valued above Q1 million.

For companies holding significant portfolios of commercial real estate, ALEGALIS recommends assessing in advance how the new framework may affect costs and future budgets.

The reform also introduces significant restrictions on the relationship between taxpayers and municipalities.

Municipalities will no longer be permitted to make the provision of basic public services conditional on payment of IUSI, changing the mechanisms available for managing and enforcing collection of the tax.

The legislation also strengthens information sharing between the General Property Registry, municipalities, the Ministry of Public Finance and the Tax Administration Superintendency (SAT).

According to ALEGALIS, this increased cross-checking of information makes proper review of the tax, registry and factual status of real estate increasingly important in due diligence processes and corporate transactions.

Decree 18-2026 also introduces an important change in the taxation of real estate sales.

Gains arising from the sale of properties will be treated as income from profit-making activities rather than capital gains when the taxpayer habitually engages in leasing, subdivision, urban development, construction or the purchase and sale of real estate.

The change, which will take effect on January 1, 2027, is particularly relevant for developers, construction companies and real estate investors.

Although Mildred María Almengor Roca’s original analysis was prepared while Decree 18-2026 was still under consideration by the Executive Branch, the legislation was subsequently sanctioned and published in the Official Gazette on August 28, 2026.

The provisions specifically reforming the IUSI regime will take effect on November 26, 2026. Until then, the existing regime remains applicable.

The Income Tax reform will apply to property disposals carried out from January 1, 2027.

ALEGALIS recommends that property owners and companies review the classification and actual use of their real estate assets, assess the impact of the new rates on commercial properties and anticipate the tax implications for businesses regularly engaged in real estate activities.

The firm also recommends maintaining appropriate documentation supporting the residential, mixed or commercial use of each property, particularly in due diligence, mergers and acquisitions.

Key facts

• The reform establishes a zero-per-thousand rate for residential properties and certain mixed-use properties.
• ALEGALIS highlights that the determining factor will be the property’s actual use rather than simply whether it generates rental income.
• Commercial properties will remain subject to IUSI at rates of 3, 6 and 9 per thousand according to their value.
• The reform increases the importance of properly documenting property use and reviewing tax and registry status in corporate transactions.
• Certain gains from property sales will be treated as income from profit-making activities where they arise from habitual real estate activities.
• The specific IUSI reforms will take effect on November 26, 2026, while the Income Tax change will apply from January 1, 2027.