Guatemala’s Decree 18-2026 introduces a zero IUSI rate for residential and mixed-use properties, progressive rates of up to 0.9% for commercial properties, and a restricted capital gains tax exemption for certain real estate transactions.
Guatemala’s Ministry of Finance has published Decree 18-2026 in the Official Gazette on 28 August 2026. The decree amends the Law of the Single Tax on Real Estate (Impuesto Único Sobre Inmuebles – IUSI) and related tax legislation.
The primary objective of these changes is to ensure tax equity by adjusting payment scales based on property value and usage, notably establishing a zero-rate tax for properties designated as primary family residences. To protect citizens, the law now strictly prohibits municipalities from withholding essential public services as a tactic to coerce property tax payments.
Additionally, the document outlines updated procedures for the collection and distribution of fiscal stamps related to property transfers, ensuring funds are correctly allocated to local governments.
The main changes are as follows:
The progressive IUSI rate scale for commercial properties
Under the newly amended Article 11 of the IUSI Law, real estate used for commercial and other non-residential purposes is subject to a progressive tax scale based on its registered value:
- GTQ 0.00 to GTQ 500,000.00: Taxed at 3 per thousand (0.3%).
- GTQ 500,000.01 to GTQ 1,000,000.00: Taxed at 6 per thousand (0.6%).
- GTQ 1,000,000.01 and above: Taxed at 9 per thousand (0.9%).
This progressive scale ensures that higher-value commercial assets bear a proportionally higher tax rate, aligning with principles of fiscal equity and economic capacity.
The zero-tax rate (exemption) for residential and mixed-use properties
In contrast to the commercial scale, the decree establishes a tax rate of cero por millar (0/000 or 0%) for real estate designated for:
- Housing
- Residential use
- Mixed-use
The law treats housing as a social asset and seeks to protect family patrimony, ensuring property taxes do not hinder the retention of a primary residence.
The real estate capital gains tax exemption (Income Tax / ISR)
The decree adds a new exemption to Article 87 of the Income Tax Law for capital gains resulting from the onerous transfer, sale, or swap of real estate located in Guatemala. However, to prevent tax avoidance by commercial operators, this exemption is heavily restricted. The exemption applies only to individuals who are transferring personal or family real estate outside of a commercial business context.
The exemption does not cover legal entities, trusts, income-taxable undivided estates, or other entities subject to Article 3 of the Income Tax Law. It also excludes individuals registered for real estate business activities, including property sales, land development, construction, and real estate brokerage.
Capital gains from these excluded categories remain fully taxable under the applicable general income tax rules.
Implementation and effective dates
The decree divides the implementation timeline into distinct phases to allow government institutions, taxpayers, and municipalities to adapt their systems:
- IUSI changes: The revised IUSI rules, including the commercial rates and residential zero-rate exemption, take effect 26 November 2026, 90 days after publication. This period allows authorities and municipalities to update their systems and procedures.
- Capital gains exemption: The ISR amendments take effect 1 January 2027 and apply to real estate transactions completed on or after that date.
