Apartment inherited among several siblings: taxes in Peru

In Peru, when an apartment ends up in the hands of several siblings through succession, the most common is for them to enter co-ownership. That figure works without friction while everyone is aligned, but over time concrete questions arise: do you have to pay IR on inheritance? What if one wants to buy out the others? Should we sell everything to a third party? This guide goes through the legal paths and associated taxes.

The succession and co-ownership

Before talking about taxes, the succession must be closed. In Peru there are two routes:

• Intestate succession: when there is no will. It is processed before a notary or judge. Approximate timeline: 30 to 60 days.
• Testamentary succession: the notary formalizes the opening of the will.

Once the succession is registered in SUNARP and noted in the property's entry, the siblings appear as co-owners in the corresponding proportions.

Is there an inheritance tax in Peru?

No. Peru does not have an inheritance tax (the old "intestate succession" as a tax was eliminated in 1994). Transmission by succession also does not generate Income Tax for the heirs as long as there is no transfer.

What there are are succession process costs: notarial fees, notices, registry fees in SUNARP. The total for an intestate succession of an apartment is around S/ 1,500 to S/ 4,000.

Three paths for the siblings

1. Maintain co-ownership

Works if the siblings are aligned. Ordinary decisions (rent, maintain) are made by majority; extraordinary ones (sell, mortgage) require unanimity, under article 971 of the Civil Code. Maintenance, predial and arbitrios expenses are shared in proportion to the shares.

If the apartment is rented, each sibling declares their share as first-category income and pays 5% effective on the gross income that corresponds to them.

2. A sibling buys out the others

The sibling who keeps the property buys the ideal shares of the others. Each ideal-share sale:

• Generates second-category Income Tax for the selling sibling. Effective rate 5% on the gain.
• Generates Alcabala for the buying sibling, 3% on the transfer value or autoavalúo, whichever is greater, with the non-taxable minimum of 10 UIT.
• Implies notarial and registry costs in SUNARP.

If the selling sibling qualifies as casa habitación (resided and was owner for at least two years), their share is exempt from IR.

3. Physically divide and partition or sell to third parties

Division and partition is the figure by which co-owners agree to end the co-ownership. It is formalized in public deed. There are two modalities:

• Division without economic changes: when equivalent value shares are adjudicated and no one pays compensation. Does not generate IR.
• Division with compensation: if a sibling keeps the apartment and pays the others in cash, SUNAT treats the differences as ideal-share transfers. Same as the previous option: IR for those who receive money, Alcabala for the one who keeps it.

If everyone prefers to sell to a third party, each sibling declares their individual gain and pays second-category IR on their share. Alcabala is paid by the buyer.

Correct computable cost

The frequent error is assuming zero cost because the property was inherited. The rule of the IR Law Regulation is:

• If the deceased acquired the property for consideration, the heirs take as computable cost the deceased's cost (their updated purchase price).
• If the deceased also received it through inheritance or donation, the autoavalúo of the date of the gratuitous transfer is taken.

That is why it is wise to track the historical documentation: deceased's original minute, public deed, old autoavalúos.

Step-by-step process if one buys out the others

1. Close the succession and register it in SUNARP.
2. Agree on the price among siblings. An RNT appraiser's appraisal is recommended.
3. Sign a sale minute of ideal shares or, alternatively, division and partition minute with compensation.
4. Elevate the minute to public deed before a notary.
5. The notary or the seller declares and pays the IR through virtual form No. 1665 before SUNAT in the month following the operation.
6. The buying sibling pays the Alcabala before SAT de Lima or the corresponding municipality.
7. Register the transfer in SUNARP.

Practical case: three siblings in Lima

An apartment in Pueblo Libre, bought by the father in 2005 for US$ 90,000, is inherited in 2022 by three siblings. In 2026, two of them sell their 33.33% to the third. The appraisal yields a total value of US$ 220,000.

• Each selling sibling transfers approximately US$ 73,300.
• Proportional computable cost, updated by IPM: about US$ 38,000 per seller.
• Gain per seller: US$ 35,300. Taxable gain (80%): US$ 28,240. IR (6.25%): approximately US$ 1,765 each.

The buying sibling pays Alcabala on US$ 146,600 (equivalent to the two ideal shares acquired), 3% less the non-taxable minimum.

Common mistakes

• Assuming inheritance pays IR: it does not.
• Calculating IR with zero cost on resale: cost is inherited.
• Selling between siblings without a deed.
• Forgetting the casa habitación exemption.
• Processing the sale before registering the succession in SUNARP.
• Not declaring the IR in the month following the operation.

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