Income tax when selling an inherited property in Peru: why your cost basis can be zero

The mistake that can cost an heir dearly

Almost everyone assumes the same thing: “I inherited the house, so my tax cost basis is what it’s worth today — I should only pay tax if I sell it for more than that.” That logic made sense before August 2012. Since then, the rule runs the other way, and it can mean paying tax on close to 100% of the sale price if you don’t take one concrete precaution ahead of time.

The rule since August 1, 2012: zero cost basis

Article 21, numeral 21.1, literal a.2) of the Income Tax Law — in its text in force since that date — is direct: “si la adquisición es a título gratuito, el costo computable será igual a cero” (“if the acquisition is free of charge, the cost basis will be equal to zero”). An inheritance is exactly that: an acquisition free of charge.

There’s a way out, but it requires proof: the same rule allows using instead “el costo que correspondía al transferente antes de la transferencia” — what the deceased person paid when they themselves acquired the property — “siempre que éste se acredite de manera fehaciente” (“as long as it is reliably proven”). Without a notarized deed, a dated contract registered with Public Registry, or equivalent documented backup proving that original cost, SUNAT applies the zero cost basis by default.

In practice, this means that if you sell an inherited house without being able to prove what the deceased paid for it, the taxable gain comes close to the full sale value — not the difference between the current value and some “entry cost” into your own estate.

The exception: inheritances from before August 2012

If you inherited before that date, the zero-cost-basis rule doesn’t apply to you. The earlier rule — confirmed in SUNAT’s own taxpayer guidance — still governs: the cost basis is the property’s autoavalúo value (its self-assessed value for property tax purposes), adjusted by the inflation-correction index set by the Ministry of Economy and Finance. This earlier rule is the one many people assume always applies — but since 2012, it’s the exception, not the general rule.

One detail that decides everything: “acquisition date” is not the date of death

To know whether the zero-cost-basis rule or the autoavalúo rule applies to you, you need your tax acquisition date — and here’s another surprise. SUNAT doesn’t count from the date the person died, but from:

• The date of the declaratoria de herederos (the formal declaration of heirs), if the succession is intestate (no will).
• The date the will was registered with Public Registry, if the succession is testamentary.

This matters twice over: it decides which cost-basis rule applies to you, and it’s also relevant for counting the casa habitación exemption period covered next.

The casa habitación exemption: when you owe nothing at all

If the inherited property qualifies as your “casa habitación” (primary residence), the sale is fully exempt from the tax. Article 1-A of the Regulations defines it as the property that “permanezca en su propiedad por lo menos dos (2) años y que no esté destinado exclusivamente al comercio, industria, oficina, almacén, cochera o similares” — stays in your ownership for at least two years and isn’t used exclusively for commerce, industry, an office, storage, parking, or similar.

Two special rules in the same article matter when there are several heirs:

• While the property remains undivided (an unpartitioned estate, sucesión indivisa), the Regulations treat it as belonging to a single owner — the estate — for this test, not as separate property of each heir.
• Once it’s been divided among co-owners, each heir is assessed separately: the share belonging to those who don’t own another property can qualify as an exempt casa habitación, even if a sibling who does own another property doesn’t qualify — without that dragging down the rest.

How the tax is calculated, and when it’s due

The formula is simple once you know your cost basis: Gain = Sale Value − Cost Basis, and the effective rate is 5% on that gain. The deadline to file and pay, via Formulario Virtual 1665, is the month following the month you received payment. If you owe nothing because you qualify for the exemption, the notary formalizing the sale will instead require a written communication that you’re not required to make the payment, under Article 53-B of the Regulations — not a proof-of-payment slip.

In summary

Selling an inherited property doesn’t always come with a big tax bill, but the default rule since 2012 works against you if you don’t prepare: zero cost basis, unless you can prove what the deceased person paid for it. Check your tax acquisition date, gather documentation of the original cost if any exists, and assess whether you qualify for the casa habitación exemption before signing the sale — not after.