Can you buy a house at a symbolic price in Peru?

The fantasy of buying a house for a fraction of its value also exists in Peru, although with more sober rules than the European "$1 homes" myth. There are legal paths —judicial auctions, sales and auctions by the National Superintendence of State Property (SBN), adverse possession and physical-legal sanitation programs— that allow acquiring properties below market. All involve legal costs and timelines that should be budgeted before signing.

Four real paths

1. Judicial auctions

When a creditor enforces a mortgage, the property is auctioned publicly through the corresponding civil court, in accordance with the Civil Procedure Code (articles 728 onwards). The base of the first auction is the appraisal value. If no one bids, the second is at 80% of the base, the third at 60% and subsequent ones with additional reductions set by the judge.

How to participate:

• Review calls published in the official gazette El Peruano, in the largest-circulation newspaper of the area, and on the Judiciary's website.
• Deposit the oblaje (10% of the base value) into the court's Banco de la Nación account.
• Attend the hearing and bid.
• If you win, deposit the balance within the indicated period and request adjudication and registration in SUNARP.

Main risk: the property may be occupied and eviction is handled judicially.

2. SBN sales and auctions

The National Superintendence of State Property administers the State's properties and periodically offers properties not needed for public function for public sale, tender or auction. Calls are published on sbn.gob.pe.

Modalities include public auction, direct sale by cause, and swap. Base prices start from the commercial value determined by appraisers, but as it is a public State offering, the processes tend to be very transparent.

3. Adverse possession (usucapión)

The Peruvian Civil Code recognizes two forms of adverse acquisition of property:

• Long: continuous, peaceful and public possession for 10 years (article 950).
• Short: 5 years when fair title and good faith are demonstrated.

The procedure can be processed:

• Notarially (Law No. 27157), when it concerns urban properties not contested by third parties.
• Judicially, when there is opposition or when the property is rural or presents complexities.

Approximate cost: between S/ 3,000 and S/ 10,000 in fees and duties, with timelines of six months to two years.

4. Sanitation and formalization programs

COFOPRI (Organism for Formalization of Informal Property) has formalized millions of urban properties in shantytowns. Today many holders can access property titles through municipal programs and subsequent registration in SUNARP. It is not "buying cheap" but regularizing existing possession, but the patrimonial effect can be very significant.

Additionally, some municipalities and the SBN auction lots for social housing or Techo Propio programs, with preferential prices.

Step-by-step process for a judicial auction

1. Locate the call from the civil court in El Peruano and the regional newspaper.
2. Request access to the file and review the appraisal, liens and charges.
3. Request an updated literal copy of the registry entry in SUNARP.
4. Verify whether there are occupants through a prudent visit to the property.
5. Deposit the oblaje at Banco de la Nación to the court's order.
6. Bid at the hearing.
7. If you win, complete the payment and request the adjudication order and registration in SUNARP.
8. Process delivery or eviction if the property is occupied.

Practical case: Northern Lima

A condo in Comas with a foreclosed mortgage is auctioned at a base of S/ 145,000, versus a market value of S/ 230,000. The first hearing is deserted; in the second, at 80% of the base, an investor bids and wins for S/ 117,000. After managing the eviction of the occupant, they invest S/ 22,000 in improvements and rent it out. The monthly return rate on the total investment is close to 10% annually.

Practical case: adverse possession in Trujillo

A family possessed for 14 years a property in Trujillo, paying arbitrios and predial in their name and building the home. They file adverse possession through the notarial route under Law No. 27157. After nine months, they obtain the public deed and registration in SUNARP, regularizing an asset they previously could not sell or mortgage.

What to always verify

• Current literal copy of the registry entry.
• Negative certificate of liens and charges.
• Cadastral certificate, if available.
• Certificate of no debt for predial and arbitrios at the municipality.
• Occupation status of the property.
• An independent appraisal by an appraiser registered in the RNT.

Risks to avoid

• Buying outside formal processes, lured by impossible prices.
• Assuming a "abandoned" property has no registered owner.
• Underestimating the costs of evicting occupants.
• Ignoring prior debts for utilities or municipal taxes.
• Skipping physical-legal sanitation before investing in construction.

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