ALEGALIS examines the impact of Guatemala’s IUSI reform

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

Changes affecting municipalities

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.

Income Tax implications for real estate 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.

Entry into force

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.

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