Peru’s Real Estate Investment Tax Incentives Set to Expire, Raising Market Concerns
The Peruvian investment landscape is facing a pivotal moment as tax incentives for key real estate vehicles are scheduled to expire on December 31, 2026. This deadline has ignited a debate among market participants regarding the continuity of these benefits and the potential impact on the nation’s financial trajectory.
Since 2015, Real Estate Income Investment Funds (FIRBI) and Real Estate Income Investment Trusts (FIBRA) have operated under a reduced Income Tax rate of 5%. These real estate investment incentives serve as critical entry points for a wide range of investors, allowing them to participate in the property market without the requirement of purchasing entire buildings or land parcels.
Industry stakeholders argue that extending these tax breaks is essential to avoid a setback in the deepening of the capital markets. The incentives were originally designed to attract more investors, promote corporate financing, and stimulate overall market development. The potential removal of these benefits could disrupt the momentum of investment vehicles that have become staples for diversifying portfolios.
The ongoing relevance of these structures is evidenced by recent corporate activity; for example, Fibra Prime expanded its portfolio with 10 new acquisitions in 2026. Such growth highlights the appetite for structured real estate products, provided the fiscal environment remains favorable.
The decision to extend the current tax regime now rests with the upcoming Congress. The legislative outcome will be a key determinant in whether Peru continues to foster an environment conducive to institutional real estate investment or faces a contraction in market participation.
