Airbnb Laws in Paraguay

Airbnb Laws in Paraguay

Paraguay

Introduction
Introduction to Airbnb in Paraguay

Paraguay’s short-term rental market, known locally as alquileres temporarios or alquileres de corta estancia, has seen remarkable growth in recent years, offering travelers unique stays in popular destinations such as Asunción, Encarnación, and the picturesque town of San Bernardino. The rise of short-term rentals has not only boosted tourism but has also made a significant economic impact, contributing to the local economy. In 2023 alone, the government reported substantial income generated from short-term rental activities, reflecting the growing popularity of this accommodation option. Popular platforms like Airbnb and Booking.com have become the go-to choices for listing these properties, connecting hosts with guests from around the world and further fueling the sector's expansion in Paraguay.

Overview

Paraguay’s short-term rental market, known locally as alquileres temporarios or alquileres de corta estancia, has seen remarkable growth in recent years, offering travelers unique stays in popular destinations such as Asunción, Encarnación, and the picturesque town of San Bernardino. The rise of short-term rentals has not only boosted tourism but has also made a significant economic impact, contributing to the local economy. In 2023 alone, the government reported substantial income generated from short-term rental activities, reflecting the growing popularity of this accommodation option. Popular platforms like Airbnb and Booking.com have become the go-to choices for listing these properties, connecting hosts with guests from around the world and further fueling the sector's expansion in Paraguay.

Property
Overview

There is no national association specifically for short-term rentals in Paraguay. However, hosts may benefit from joining the Paraguayan Association of Real Estate Agents (API), which provides resources, networking opportunities, and industry insights. Membership may include access to market data, legal advice, and industry support, helping hosts stay updated on regulations and best practices.

Property
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short term rentals
What is Airbnb in Paraguay?
What are short Term Rentals in the Country?

In Paraguay, short-term rentals are commonly referred to as "alquileres temporarios" or "alquileres de corta estancia," which translate to "temporary rentals" and "short-stay rentals" in English. These terms are widely used in the local language, Spanish, and on international booking platforms like Airbnb, Booking.com, and Vrbo, they are listed under common English names such as "vacation rental," "holiday rental," or "tourist accommodation." Short-term rentals in Paraguay are defined as furnished accommodations rented out for brief periods, typically ranging from a single night up to several months, catering to tourists, business travelers, and anyone seeking temporary lodging. While there is no specific legal definition codified in Paraguayan law, these rentals are generally understood to be leases of less than six months.

Is Subletting Legal?
Is Subletting Legal in Paraguay?

In Paraguay, subletting a property is generally permitted, but it is subject to the terms outlined in the original lease agreement between the tenant and the landlord. The Paraguayan Civil Code requires tenants to obtain explicit consent from the landlord before subletting the property to third parties.

Key considerations include:

  • Landlord Permission: Tenants must secure written approval from the landlord, clearly stating the terms and scope of the sublease.
  • Lease Agreement Terms: The original lease may include clauses that prohibit or limit subletting activities.
  • Legal Compliance: Both the tenant and subtenant must comply with local laws and regulations, including registration and taxation if applicable.

Without the landlord's consent, subletting could result in breach of contract, leading to potential eviction or legal action.

National Association for STR Owners
What is the maximum length of stay in Paraguay?
What is the maximum length of stay?

Paraguay does not impose a nationwide maximum length of stay for guests in short-term rentals. The duration of a guest's stay is typically determined by:

  • Host Preferences: Hosts can set minimum and maximum stay lengths based on their own policies.
  • Local Regulations: Some municipalities may have bylaws that affect rental durations, but such cases are not widespread.
  • Type of Accommodation: For certain types of properties, especially those in condominium buildings or gated communities, internal regulations may limit the length of guest stays.

Hosts should ensure that their rental agreements comply with any applicable local laws and community rules.

Is there any National Registration Requirement or Permit?

Paraguay does not have a centralized national registration system specifically for short-term rentals. However, hosts may be required to:

  • Register with Local Authorities: Some municipalities might require hosts to register their property as a rental accommodation.
  • Obtain a Business License: If operating as a commercial enterprise, hosts may need to acquire a business license from the local government.
  • Comply with SENATUR Regulations: The National Secretariat of Tourism may have guidelines or voluntary registration programs for accommodations catering to tourists.

Process and Requirements:

  • Documentation: Proof of property ownership or lease agreement, identification documents, and possibly a business plan.
  • Fees: Vary by municipality; hosts should check with local government offices for exact amounts.
  • Inspections: Properties may need to pass safety and health inspections before receiving approval.

Hosts are encouraged to consult local authorities or legal professionals to ensure compliance with all regulatory requirements.

Is there a need for Permission from Landlord/Local Council/Neighbors?
  • Landlord Permission: If you are a tenant, you must obtain written consent from your landlord before offering the property as a short-term rental.
  • Homeowners Association (HOA): If the property is within a condominium or a gated community, you may need approval from the HOA, as they might have rules restricting short-term rentals.
  • Local Council: While not always mandatory, informing or registering with the local municipality can be beneficial and, in some areas, required.
  • Neighbors: While not a legal requirement, maintaining good relations with neighbors is advisable to prevent potential disputes, especially concerning noise or security issues.
Is Short-term rental Income taxable?

For years, Paraguay was an accidental tax haven. What we mean is that it was not a tax haven by design, but the government simply never introduced personal income taxes. However, this has changed in recent years, but the good news is that, as a resident with no local income, you are not liable to Paraguayan taxes and nobody will bother you. There is simply no culture of taxpaying in Paraguay. After years of postponement, a personal income tax was finally introduced in 2012, at the rate of 10%. This tax seems more of a token measure than anything else it is aimed at the Paraguayan upper-classes, who are, in any case, likely to structure their affairs so as to avoid paying. The tax does not apply to worldwide income it only applies to income generated in Paraguay. So, for example, if you own property in Paraguay and receive a rental income, or if you receive a salary from a local company, you are liable to pay income tax.

Is there any National Tourism Fund or Tourist Tax?

In Paraguay, short-term rental operators may be required to collect a tourist tax from guests, which contributes to the National Tourism Fund. This fund, overseen by the National Secretariat of Tourism (SENATUR), is used to support tourism infrastructure, cultural preservation, and local tourism development. The exact amount of this tax and whether it applies to all types of short-term rentals can vary by region, and hosts should verify the current requirements with SENATUR or local authorities to ensure compliance.

Is there any Guest Registration and Reporting Requirement?

Yes, hosts in Paraguay are generally required to register and report guest information to the national authorities, particularly when accommodating foreign guests. The National Police and Immigration Department may request that hosts report details such as guest names, passport numbers, and duration of stay. Typically, this information must be provided within 24 hours of the guest’s arrival. Hosts can find more information on the reporting process by contacting the Ministry of Public Security or checking with local police stations.

Is there any National Health and Safety Requirements?

Health and safety standards apply to all accommodation providers in Paraguay. Hosts must adhere to basic safety regulations, which include:

  • Fire Safety: Properties should be equipped with fire extinguishers and smoke alarms.
  • Building Safety: Properties must be structurally sound and meet local building codes.
  • Sanitation: Facilities such as kitchens and bathrooms must be kept clean and sanitary.

While there is no stringent nationwide health code for short-term rentals, local authorities may inspect properties to ensure compliance. Hosts should check with municipal offices for any additional health and safety standards.

Is there any Platform Accountability Requirement?

Currently, there is no specific mandate in Paraguay that requires online platforms to enforce national compliance for listings. However, platforms like Airbnb and Booking.com often encourage hosts to meet local legal standards as part of their terms of service. Hosts are responsible for ensuring their listings comply with all national laws and regulations independently. Platforms reserve the right to remove listings found to be in violation of Paraguayan laws if reported.

Is there any Anti-Discrimination Law?

Paraguay enforces anti-discrimination laws designed to prevent discrimination based on race, religion, gender, nationality, or disability. While there are no specific regulations tailored to short-term rentals, hosts must comply with these general laws and treat all guests fairly and equitably. Hosts should review the Equal Opportunity Act and other relevant legislation to ensure they meet anti-discrimination standards. Many platforms also have policies in place to prevent discriminatory practices.

Is there any Data Sharing Requirements?

At present, no formal data-sharing mandate requires short-term rental platforms to report guest data to government authorities in Paraguay. However, should the authorities request specific data, platforms may be legally required to comply. Hosts are advised to maintain accurate records of their bookings and guest information in case of government audits or data requests.

Is there any National Insurance Requirement?

Paraguayan law does not require hosts to have liability insurance for short-term rental properties; however, insurance is highly recommended. Liability insurance can cover potential risks, such as guest injuries or property damage. Hosts may explore insurance options to safeguard against legal and financial liabilities that may arise from renting their properties. Some platforms provide host protection programs, so checking for coverage options is advisable.

Is there any National Zoning law/Cultural Heritage law?

Yes, Paraguay has zoning regulations, and properties located within culturally or historically significant areas may face restrictions regarding commercial activities, including short-term rentals. SENATUR and local governments work to protect these areas, particularly in cities like Asunción and Encarnación where historic sites are prevalent. Hosts looking to operate in protected areas may need to obtain special permissions to ensure compliance with cultural preservation laws.

Is there any Environmental Regulations that affects STR?

Paraguay encourages sustainable practices and may impose environmental regulations on properties, particularly those near protected areas, rivers, or natural reserves. Key areas of compliance include:

  • Waste Management: Hosts should manage waste responsibly to minimize environmental impact.
  • Water Conservation: Certain areas may have guidelines for water usage, especially during dry seasons.
  • Energy Efficiency: Promoting energy-saving measures is encouraged but not strictly mandated.

Hosts can consult with the Ministry of Environment and Sustainable Development for guidance on how to adopt eco-friendly practices.

Is there any National Tenant Protection Law?

Paraguay has tenant protection laws aimed at preventing the eviction of long-term tenants to make way for short-term rentals. The Paraguayan Civil Code protects long-term tenants, and landlords must follow due process if they wish to terminate a lease. Hosts who are landlords should review their tenant agreements and consult legal professionals to ensure compliance before transitioning to short-term rentals.

Is there any Reporting Requirements for Foreigners?

Yes, when hosting foreign guests, Paraguayan law requires that their arrival and departure details be reported to national immigration authorities. This involves:

  • Timely Reporting: Guest information should be provided within 24 hours of arrival.
  • Details to Report: Information typically includes name, nationality, passport number, and duration of stay.

Hosts can inquire with the Immigration Department for more details on reporting protocols.

Is there any Digital Platform Regulation Compliance?

As of now, no specific national law mandates digital platforms to verify host compliance with Paraguayan regulations before listing properties. Platforms like Airbnb may still set basic requirements for hosts, but the responsibility to comply with local laws ultimately falls on the host. Hosts should ensure they meet all Paraguayan legal obligations to avoid potential issues.

Is there any Consumer Protection Law that affect STR?

Paraguay’s consumer protection laws apply to all service providers, including short-term rentals. These laws require that rental agreements are fair, transparent, and accurately reflect the advertised amenities. Consumer rights protect guests against false advertising, hidden fees, and other unethical practices. Hosts must comply with these laws to ensure a positive guest experience and avoid legal repercussions.

Is there any Law that applies to Non-resident Owners?

Paraguay allows non-residents to own and rent property, but they must comply with all national regulations. Non-resident owners are subject to:

  • Taxation Requirements: Non-residents must pay taxes on rental income earned in Paraguay.
  • Property Management Requirements: Non-resident owners may need to hire a local representative or property manager.
  • Reporting Obligations: Non-residents must adhere to all reporting and registration requirements.
Is there any classification of STR in the country?

Paraguay does not have a formal national classification system specifically for short-term rentals. Accommodations are generally categorized under broader hospitality sectors regulated by the National Secretariat of Tourism (Secretaría Nacional de Turismo - SENATUR). The primary categories include:

  • Hotels (Hoteles): Traditional lodging establishments offering a range of services.
  • Hostels (Hostales): Budget-friendly accommodations with shared facilities.
  • Guesthouses (Pensiones): Smaller establishments, often family-run, offering basic amenities.
  • Apartments (Apartamentos): Furnished units available for short or extended stays.

Short-term rentals typically fall under the "apartments" or "guesthouses" categories. While there aren't distinct rules exclusively for short-term rentals, operators must comply with general regulations applicable to hospitality businesses, such as safety standards, hygiene, and business licensing.

Are there Special National Event Regulations?

During major national events or holidays, such as Carnaval Encarnaceno or Independence Day, additional restrictions may apply to short-term rentals in Paraguay. Regulations can include:

  • Stricter Guest Verification: Enhanced ID checks may be required during major events.
  • Noise Restrictions: Noise ordinances are more strictly enforced during national celebrations.
  • Curfews and Guest Limits: Limits on guest numbers or stricter curfews may be enforced.

These temporary measures are typically announced in advance by municipal authorities, and hosts should check for any special event regulations to ensure compliance.

Is there any Penalty for Violating National Rules?

Yes, non-compliance with applicable regulations can result in several penalties, including:

  • Fines: Monetary penalties imposed by municipal or national authorities for operating without required licenses or permits.
  • Closure Orders: Authorities may order the cessation of rental activities until compliance is achieved.
  • Legal Action: Persistent violations can lead to lawsuits or other legal proceedings.
  • Tax Penalties: Failure to report and pay taxes on rental income can result in fines, interest charges, and legal consequences.

Penalties vary based on the severity of the violation and the specific laws breached. Hosts should proactively comply with all legal obligations to avoid these repercussions.

Are there National Rules or Regulations Governing Short-Term Rentals in Paraguay?
Are there National Rules or Regulations Governing Short-Term Rentals in the Country?

Paraguay regulates both short-term and traditional rentals under Law No. 1,295 on Rental, Leasing, or Financial and Commercial Leasing. Key points:

  • Uniform Application: The same law applies to both short-term and long-term rentals.
  • VAT: 5% VAT applies to all rental income.
    • **Short-Term Rental Considerations:**Flexible contracts (days to six months).
    • Properties are usually expected to be fully furnished.
    • Growing demand, especially in urban centers.

Hosts should consult a real estate lawyer, register with tax authorities, and research the local market.

Is there any National Tax that affects short-term rental?

In Paraguay, national taxes on short-term rentals are:

  1. Value Added Tax (VAT): 5% of rental income.
  2. Income Tax (IRP): 8-10% progressive rates on total annual income.
  3. Corporate Income Tax: 10% of net profits (if operated as a business).
  4. Municipal Taxes: May apply (rates vary by municipality).

Hosts must register with the SET, file tax returns, and keep accurate records. Consulting a tax advisor is recommended.

permits, license
Are there any Permits, Licenses, or Registrations for Airbnb in Paraguay?
Are there any Permits, Licenses, or Registrations for Short-term Rentals in the Country?

Paraguay does not have a centralized national registration system specifically for short-term rentals. However, hosts may be required to:

  • Register with Local Authorities: Some municipalities might require hosts to register their property as a rental accommodation.
  • Obtain a Business License: If operating as a commercial enterprise, hosts may need to acquire a business license from the local government.
  • Comply with SENATUR Regulations: The National Secretariat of Tourism may have guidelines or voluntary registration programs for accommodations catering to tourists.

Process and Requirements:

  • Documentation: Proof of property ownership or lease agreement, identification documents, and possibly a business plan.
  • Fees: Vary by municipality; hosts should check with local government offices for exact amounts.
  • Inspections: Properties may need to pass safety and health inspections before receiving approval.

Hosts are encouraged to consult local authorities or legal professionals to ensure compliance with all regulatory requirements.

Is there any National Association for Airbnb owners in Paraguay?
Is there any National Association for STR owners in the Country?

There is no national association specifically for short-term rentals in Paraguay. However, hosts may benefit from joining the Paraguayan Association of Real Estate Agents (API), which provides resources, networking opportunities, and industry insights. Membership may include access to market data, legal advice, and industry support, helping hosts stay updated on regulations and best practices.

National Association for STR Owners

Disclaimer

Lodge compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.

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