The river, that gives its name to Paraguay, can be divided into two main zones: eastern area and western area.
The eastern area is the most urban, populated and developed region in economic terms. Its rural zones are mostly for agricultural production.
The western area, the Chaco, is the least populated and driest region, which is mostly for cattle farming. That is why the lands of Chaco have always been more economical. But, despite this, thanks to the development of Agricultural Technologies, this land has the greatest potential both in agriculture and in cattle breeding. Let’s consider, for instance, Boquerón area, which is located in the extreme western area of the country, where there is scarce rainfall, but where the land is rich in phosphorous. Thanks to the new methods of irrigation, we can rely on a land which has always been underutilized. The cost of this land is almost nothing, it is located within the country and above all, it has an enormous potential of revalorization.
In the last ten years both regions had an impressive growth rate: lands re-evaluated excellently, with an yearly growth never less than 8% (record low in 2003).
Soil fertility is not open to discussion: Paraguay cultivates and exports soya, corn, cotton, wheat…
Another positive aspect we have to consider is that agricultural foods products are interchangeable and you can sell them in any main currency (such as US dollars, Euro…), because they are not directly dependent on the value of guaranì. Despite Paraguay’s potential and its years of strong development, the prices per hectare continue to be much lower than the prices of its neighbouring countries. Land acquisition is open to foreign people with the sole exception of the lands located less than 50 km from the border of the country. This applies to citizens and companies of Brazil, Argentine and Bolivia and it is only because of border security. To make a long story short: European and North American people have the opportunity to buy lands and to enjoy all related benefits.
For the purchase of land the Paraguayan Civil Code provides that the transfer of ownership is to be carried via notarial deed, which will be added to Public Property Record. The available certificates of deed (it means that the previous owner is free to give them up) and tax documents are achieved before the drafting of the constituent deed. Apart from these formal requirements, you need to review all the documentation to be sure that there are no mistakes in the record of deed or specific restrictions as regards the land use (for example environmental protection or wildlife protection). Finally, given the rise in extractive activities or oil drilling, we strongly advise you to determine the existence of the right of exploration and exploitation, that could, possibly, condition the owner of the top soil. On the purchase price you will pay an IVA rate of 1,5% and the taxes derived from capital incomes will depend on the owner’s status (if it is a firm, if he/she is a permanent resident, if he/she is not a permanent resident and so on….). It is customary that, unless otherwise agreed, notarial deed charges and transfer costs are divided equally between purchaser and seller. The National Land Registry establishes the tax value and usually it shall be 1%. In any case, it is better you check it before you buy the land. We of Living In Paraguay just make this detailed checking, before advising you to invest or not to invest. An additional tax on latifundio will be applied on the properties greater than 20000 hectares (in western area) and greater of 10000 hectares (in eastern area).
Finally, in estimating we will value if land has groundwater, if it is been properly bounded or fenced, if it has an easy access etc. It is possible that all these factors involve a change in price (per hectare).
Although urban real estate marketing is at the highest level, this fact does not prevent the increase of the buying and selling of lands both for cultivation and for breeding. In both cases, there was a considerable increase of their value and lands really are an investment, which has a very high return, if we compare it to the return of many other sectors.
