Buying a home in Peru: how arras (earnest money) work and when you actually own it

When you actually become the owner: the moment matters more than the paperwork

Unlike what many people assume, in Peru you don’t need to register your purchase with Sunarp to own a home. Article 949 of the Civil Code is direct: “the mere obligation to transfer a specific piece of real estate makes the creditor its owner,” unless the law says otherwise or the parties agree to something different. In practice, this means you become the owner the moment you and the seller take on the obligation to transfer ownership — usually when you sign the sale contract or the minuta.

This doesn’t make registration pointless. Quite the opposite: registering your purchase with Sunarp is what protects you against third parties — for example, if the same seller, in bad faith, later sold the same property to someone else. That’s why, even though you’re already the owner from the moment of signing, it still pays to register as soon as possible.

What a sale contract is, in plain terms

Article 1529 defines it this way: “the seller undertakes to transfer ownership of a good to the buyer, and the buyer undertakes to pay its price in money.” From there come two essential obligations worth remembering: the seller must complete the transfer of ownership (Article 1549), and must deliver the property to you in the same condition it was in when you signed the contract, including its accessories (Article 1550) — unless you agreed otherwise.

Confirmatory earnest money: it seals the final contract

When you pay earnest money upon signing an already-final sale (not a mere promise), it’s normally confirmatory earnest money. Article 1477 states that paying it “marks the conclusion of the contract,” and that if everything is fulfilled, whoever received it returns it or deducts it from the final price.

Article 1478 covers what happens if either party breaches: if you paid the earnest money and you’re the one who breaches, you lose it to the seller. But if the seller is the one who breaches after receiving it, you have the right to demand double that amount back — without needing to prove any additional harm.

Withdrawal earnest money: only in preliminary contracts

If what you signed is a preliminary contract (a commitment to buy that isn’t yet the final sale) and you want to keep the option of backing out, the earnest money needs to be of the withdrawal type. Article 1480 is clear: this type of earnest money “is only valid in preliminary contracts” and gives both parties the right to back out.

The consequences, under Article 1481, are symmetric: if you back out after paying the earnest money, you lose it to the other party. If the person who received it backs out, they must return it to you doubled.

What to check before signing and handing over money

• That the contract makes explicit which type of earnest money you’re paying — confirmatory or withdrawal — since their financial consequences are opposite.
• That whoever is selling to you actually owns the property at that moment, since the transfer depends on the obligation taken on, not just on what a registry says.
• That the property’s condition at delivery matches what was agreed, under Article 1550.

If the seller doesn’t follow through after you’ve signed and paid earnest money, you have a concrete, quantified right you can enforce: double what you paid, if the earnest money was confirmatory, without needing a long process to prove how much you lost.

Calculate it

Buying property also triggers the Impuesto de Alcabala (property transfer tax): 3% of the transfer value, minus the first 10 UIT, which are exempt. The Alcabala calculator estimates it from your sale price and your autoavalúo.