Guatemala President Bernardo Arévalo faces decision on IUSI tax reform

On 29 July 2026 the Guatemalan Congress approved Decree 18‑2026, reforming the Impuesto Único Sobre Inmuebles (IUSI). The law exempts residential and mixed‑use homes from the tax while imposing a graduated rate on commercial properties (nine per‑thousand of assessed value). The decree was signed by the congressional leadership on 6 August and sent to President Bernardo Arévalo, who has 15 days to either sanction or veto it.

Arévalo’s choice carries high political stakes ahead of the 2027 general elections. Municipalities warn that eliminating IUSI revenue threatens financing for schools, water, drainage and cleaning services in more than 50 municipalities that rely heavily on the tax. The Association National of Municipalities has called for a sustainable financing model. If the president vetoes the reform, Congress could override the veto with a qualified majority of 107 votes. Analysts note that the reform could weaken local autonomy, shift fiscal power to the central government and become a key electoral issue.

Supporters argue the change will benefit thousands of Guatemalan families by reducing housing costs, while opponents stress the fiscal impact on local governments and the potential for political manipulation of municipal finances.