Zang, Bergel & Viñes
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
Yes, as a general principle foreigners investing in Argentina enjoy the same status and have the same rights that the Constitution and domestic laws confer on local investors for owning and occupying real estate (including shares in property owning companies). However, pursuant to Decree-Law No. 15.385/44, the acquisition of property located in “frontier zones” or “security zones” by foreign individuals or legal persons requires previous consent by the National Commission for Safety Areas. In addition, Law No. 26.737 restricts the ownership of rural real estate, imposing limitations on size, location and amount for non-Argentine people and entities controlled by them.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
There are no special restrictions that somehow may affect the possibility of financial entities in Argentina lending for the purchase of real estate by foreign companies. However, if the financial entity is local, it should comply with all the normal obligations and ordinary regulations of the Argentine Central Bank, regulations on money laundering and requirements regarding information (as Know Your Client).
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
The costs and taxes applicable range between 5.6% and 9% of the purchase price, as follows (considering that the property is located in the City of Buenos Aires):
- Stamp tax: 1.8% (the seller has to pay another 1.8%, since the rate of 3.6% is in practice split by the notary public between seller and buyer). There is a tax exemption up to the amount of AR $ 975,000 in case of single, family housing and permanent occupation when it constitutes the only property in head of each of the acquirers.
- Notary public's fees: between 1.25% and 2% approx. (plus 21% on the fees as VAT).
- Notary public's expenses: 0.6% approx.
- Broker's fees: in practice between 2% and 4% approx. (plus 21% on the fees as VAT), although Section 77 of Law 24.441 states that said fees (i) cannot be higher than 1.5% and (ii) are not applicable for buyers in case of new homes.
Please note that except for the Stamp Tax, all other expenses and fees are subject to negotiation with the relevant counterparty (notary public, broker, etc.), causing the wide range of tax rates and costs described above.
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?
Ownership of real estate by foreign investors is subject to the following taxes:
- Tax on Personal Assets (TPA): this tax is imposed on assets existing as of December 31 each year. The applicable rate is 0.25% on the aggregate value when exceeding the amount of $1,050,000 (minimum exempted from TPA). The tax base is its acquisition cost (minus its yearly depreciation) or the tax value at the end of the fiscal year, whichever is higher. This tax is paid to the Federal Tax Department (AFIP) by a substitute taxpayer each year, on behalf of the foreign owner. Some Double Taxation Treaties entered into by Argentina might prevent the application of this tax to residents of the contracting State. If the property is a permanent establishment, then no TPA will be applicable, but instead the ownership would be subject to the Tax on Minimum Presumed Income for fiscal period 2018 (for following fiscal periods, this tax was abrogated according to Section 76 of Law 27260), at the rate of 1% on the value of the property. Generally TPA shall apply to real estate owned by a foreign company.
- The real estate tax; the rate for lighting, sweeping and cleaning, as well as any other tax or fees of a similar nature that may be collected by the Provincial or Municipal Tax Departments. Unlike TPA: (i) these are provincial and municipal taxes, (ii) they are generally subject to progressive rates that depend on the relevant jurisdiction involved (usually between 0.4% and 3% on the value of the property), and (iii) the burden of these taxes, as well as real estate expenses, could be passed on to another person if agreed.
C. Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?
We are not aware of any national tax breaks or other incentives for foreigners to buy real estate in Argentina. There could be provincial or municipal tax incentives, depending on the relevant local jurisdiction.
How is the ownership of Real Estate evidenced in your jurisdiction?
The Civil and Commercial Code stipulates that all agreements for the transfer (sale or purchase) of ownership of real estate must be effected by means of a public deed. Moreover, pursuant to Law No. 17.801, said documentation for all real property (except state-owned property) must be registered with the corresponding public registries of real estate property according to each jurisdiction in order to be evidenced against third parties.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
The registries are public for those who have a legitimate interest in finding out the legal status of the property, documents, limitations or bans inscribed. Therefore, the information on ownership of real estate is publicly available in Argentina.