Guatemala Congress approves residential property tax exemption

The Congress of the Republic of Guatemala approved Decree 18-2026 on July 29, 2026, reforming the Single Property Tax (IUSI) law. The new legislation exempts residential housing and mixed-use properties from this tax.

The reform passed with 121 votes in favor and 25 against. While the initiative was originally proposed by several political parties, including UNE, Vamos, Cabal, and Valor, the final version approved by the plenary includes an amendment that provides the total exemption for residential properties.

Observers note that the decision may have significant political and fiscal repercussions for municipalities, particularly regarding revenue stability leading up to the 2027 general elections. While residential and mixed-use properties are exempt, properties designated for commercial activities remain subject to taxation.