Is there an inheritance tax in Uruguay?

It's one of the most common questions for anyone receiving an inheritance or planning their estate: 'do I have to pay an inheritance tax in Uruguay?'. The short answer is that Uruguay has no general inheritance tax (the classic 'estate' or 'succession' tax that does exist in many countries). But that doesn't mean inheriting is always free: if the inheritance includes real estate, another tax appears — the ITP. Let's break it down.

Uruguay has no inheritance tax

Today Uruguay has no tax on inheritance as such — there is no 'succession tax' or 'inheritance tax' charged on the total of what an heir receives (cash, accounts, cars, shares, etc.). Receiving money or movable assets by inheritance does not, in general, trigger a tax on that fact alone. The confusion usually comes from neighboring countries or Europe, where a succession tax does exist. Note: this is about the act of inheriting; the assets received may then generate their own annual taxes (for example, real estate pays Contribución Inmobiliaria and possibly net Wealth tax).

What does apply: the ITP on the property

When the inheritance includes real estate (a house, an apartment, a plot of land), the law treats that passing of the deceased's property to the heirs as a 'transmisión patrimonial' (patrimonial transfer), and on it the Impuesto a las Trasmisiones Patrimoniales (ITP) is due. Título 19 lists it expressly as a taxable event:

Título 19 (ITP), article 1, item E — taxable event:

«La transmisión de bienes inmuebles operada por causa de muerte o como consecuencia de la posesión definitiva de los bienes del ausente.»

In English: The transmission of real property occurring by cause of death or as a consequence of the definitive possession of an absent person's assets.

Who pays the ITP in an inheritance?

In a normal sale the ITP is paid by both parties (buyer and seller). In an inheritance there is no buyer or seller: the tax is paid by the heirs and legatees who receive the property. The law names them as taxpayers:

Título 19 (ITP), article 3, item C — taxpayers:

«Los herederos y los legatarios en el caso de las sucesiones por causa de muerte.»

In English: The heirs and legatees in the case of successions by cause of death.

How much is paid? The 3% rate

Here's the key difference from a sale. In a purchase each party pays 2% (2% the seller, 2% the buyer). In an inheritance, heirs and legatees in the direct line with the deceased — children, grandchildren, parents, grandparents — pay 3%. For everyone else (relatives not in the direct line, or other beneficiaries) the rate is 4%. The rule puts it like this:

Título 19 (ITP), article 7 — rates:

«Los hechos gravados por este impuesto tributarán de acuerdo con las siguientes tasas: a) enajenante 2% (dos por ciento); b) adquirente 2% (dos por ciento), y c) los demás contribuyentes el 4% (cuatro por ciento), excepto los herederos y legatarios en línea recta ascendente o descendente con el causante, para los cuales será el 3% (tres por ciento).»

In English: The acts taxed by this tax shall be taxed at the following rates: a) seller 2% (two percent); b) buyer 2% (two percent), and c) the other taxpayers 4% (four percent), except heirs and legatees in the direct ascending or descending line with the deceased, for whom it shall be 3% (three percent).

In plain terms: if you inherit your parents' or grandparents' house, the ITP rate is 3%. It's not a tax on 'the whole inheritance': it's 3% on the value of the property you receive.

What value is it calculated on?

The ITP is not calculated on the property's market price but on the valor real (assessed value) set by the Dirección Nacional de Catastro, in force at the date of the taxable event (the death). That 'valor real' (sometimes called fiscal or Catastro value) is usually well below the sale price, so the ITP due is lower than you'd imagine if you thought in market terms. The notary handling the succession calculates the exact amount using the Catastro value of the parcel.

The succession process and the notary

For the property to be put in the heirs' names you need the proceso sucesorio (succession proceeding), a court procedure handled with a notary (escribano) that is separate from the tax. The ITP on the transfer by cause of death has a one-year deadline to be paid, counted from the date of the deceased's death. In practice, the notary handles assessing and paying the ITP within the succession. Since every family and estate situation is different, for your specific case it's best to consult a notary and confirm the amounts with DGI.

• Buying property in Uruguay: the ITP explained
• Taxes for a property owner in Uruguay

Frequently asked questions

• Does Uruguay have an inheritance tax? There is no general succession tax on what you inherit.
• So inheriting pays nothing? If the inheritance includes real estate, ITP is due on that property.
• Who pays? The heirs and legatees who receive the property.
• How much? 3% for heirs in the direct line (children, grandchildren, parents, grandparents); 4% otherwise.
• On what value? On the property's valor real (Catastro value), not the market price.
• What about inherited money or savings? By themselves they don't trigger ITP; the ITP taxes real estate.
• Is there a deadline? One year from the death to pay the succession's ITP.
• Do I need a notary? Yes, the succession process is done with a notary, separate from the tax.

In short: Uruguay does not charge an inheritance tax as such. What is paid, when you inherit real estate, is the ITP: 3% for heirs in the direct line, on the property's Catastro value, with one year from the death. The rest of the inheritance (money, movables) pays no ITP. For your specific case, consult a notary and confirm the numbers with DGI.