Buying property in Argentina

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Buying property in Argentina - Guide to buying off plan and investment property in Argentina

Argentina is the eighth largest country in the world but, to many Europeans apart from football, great beef and the famous tango. Argentina represents a diverse range of ecosystems, mini-climates and a multitude of cultural attitudes. From Buenos Aires on the Atlantic with its Parisian attitude for life to the wild openness of Patagonia, Argentina offers something for everyone.

Argentina is a good option for investing in real estate, boasting a relatively low density of population, political stability and a warm welcome to foreigners. Major cities such as Buenos Aires, Cordoba and Mendoza already have a fairly established real estate market for investment properties given that they are industrial and or tourist based economies. New areas such as Bariloche, Iguazu Falls and Patagonia are more likely to be aimed eco based tourism given the pristine beauty of the landscapes.

Investing in Property in Buenos Aires

Buenos Aires has become a major destination for tourists in recent years and with very high occupancy levels in the good hotels, investors have been able to take advantage of high demand with apartments which are being rented on the short the holiday market as well as larger units which are doing well in the corporate rental sector / managed homes.

Areas such as Recoleta and Retiro are very desirable with investors for several reasons: they are larger than new units as they were built in an era when ample space was a necessity and not just a privilege. They are beautifully designed and offer an old world charm and grandeur. They are well located, within easy distance of the shopping and the coast. Demand is high as the local market both in the rental and buyers sectors.

Other interesting areas for property investment can be found to the south of Buenos Aires, in Barracas and San Telmo. Many sectors of Buenos Aires are currently undergoing renovation of the classically designed buildings in a concerted effort to save some of the grand buildings that have deteriorated through the years. These renovated properties or ones that are due to be renovated are great investments, not only from a financial perspective but also from an historical one. Many of these older properties boast floorplans of over 300 square metres with three bedrooms and two bathrooms plus, if you are lucky maids quarters. New and off plan property developments in the Puerto Madero area where the old docks were are currently selling quickly and should yield some very attractive rents.

With the massive investment into Buenos Aires and other key areas of Argentina, you will often see brand new modern buildings being constructed alongside those of the majestic past. Each of these two styles of apartments has a market you will have to decide if you want to own a piece of history and maintain it or buy a smaller modern property with all mod cons. Each has an appeal and both will rent well on either the long term or short term rental market place. If you prefer to be in an area with plenty of expatriates in Buenos Aires, then Palermo could be a good choice. Northern areas of Buenos Aires also offer some gorgeous old homes with manicured gardens which rent very well on the long term market. Families with school age children are your ideal tenant in the northern suburbs, with many demanding well proportioned homes inside one the gated communities that are prevalent.

Buying property outside of the capital:

Mendoza in Patagonia offers stunning scenery and is the fifth largest wine producing region in the world. The area is reminiscent of the wine producing areas of France and will no doubt hold an appeal to many like minded individuals and families that enjoy the countryside and eco-friendly environments.

Located in the foothills of the Andes, alongside Lake Nahuel Haupi, Bariloche is known as the St. Moritz of Argentina. Originally founded by Austrian and German settlers, Bariloche ahs become a unique destination for tourists as the architecture of the buildings is so far removed from the expected and it is like wandering around a typical village in the Alps. Bariloche has become popular with sports tourists and offers a lively lifestyle with plenty of entertainment.

Cordoba is located close to the centre of the country an is the countries second large city boasting nearly one and a half million residents. Regarded as the cultural centre of Argentina, Cordoba is home to a number of theatres, many art festivals, ambient cafes and some great restaurants. Property prices in Cordoba are marginally less than in Buenos Aires, with suburbs offering some very good buys.

Currently the beast beaches close to Buenos Aires are actually in Punta del Este, which is in Uruguay. Boasting a wonderful yacht port and marina, Punta del Este is one of the tourist hot spots for Argentinian and Brazilian tourists and international visitors with a maritime bent

Property in Argentina

Property in Argentina is available to foreign buyers without restrictions and you will find that most if not all property prices are shown in US dollars. Surprisingly for many, Argentina has a sophisticated real estate registry and it enables foreigners to trace ownership of real estate quite easily.

Finance and mortgages are not readily available in Argentina to foreigners, so it is advisable to make your own arrangements prior to starting the purchase process as all funds are typically asked for in cash.

Taxes on property in Argentina

When buying property in Argentina there are specific taxes and duties that you will need to pay:

Impuesto de Sello - Stamp Duty is paid by both the purchaser and the vendor which is typically 1.25% (this amount can change between provinces). Interestingly this stamp duty is NOT paid on First purchases. As an international investor you will only be charged this fee/tax on second and subsequent properties that you purchase

Impuesto de Activo or Impuesto sobre los bienes personales this is an annual assetâ or Personal Goods Tax. It is usually charged at 1% of the property value.

In Argentina, the government does not send out tax bills to property owners. Instead, owners are obliged to file tax returns at the AFIP Direccion General de Rentas which is the tax authority, and submit the payments

Home owners insurance is offered by most banks in Argentina but there are a number of reputable private companies that will make excellent comparisons. Expect to pay 50% more than in your home country.

Monthly maintenance charges are payable to your resort or apartment building which will pay for building repairs, services and the general upkeep of gardens and swimming pools etc. Locally known as Expensas.

For international investors to buy properties in Argentina you will need to obtain a CDI number Clave de Identification - which is an identification number used for any fiscal matters in Argentina and it will be required to complete the purchase process and the following registration.

The Escribano is a Public Notary called an Notario in other Latin countries and it is their offices that write the contracts, oversee the sales process and ensure that the property is correctly registered in the name of the new owner.

When buying a property in Argentina it is advisable to elect an Escribano, prior to starting the purchase process. This is because it is the Escribano that will oversee the purchase process, write the legal contracts and check that all paperwork, licenses and title deeds - Escritura - are in order

The Buying Process in Argentina

Once you have found a property you will need to make a reservation via your lawyer once your estate agent has confirmed the owners acceptance of your offer. Normally you will be asked to pay Reserva - between $1000 and $10,000 as a show of good faith, so that the owner and the estate agent remove he property from the market place and all subsequent viewings are suspended. This reservation fee is refundable should you change your mind regarding the purchase.

At the time of paying your reservation, a date for the Boleto will be set on behalf of the vendor enabling your Escribano to check the legalities of the property. At the signing of the Boleto the exchange of contract you will be required to pay 30% of the purchase price which is non refundable should you change your mind at this point. Should the vendor revoke on the sale, they will be obliged to pay double 60% to you. If there are discrepancies in the property paperwork then a well written contract stipulating that should there be any legal issues with the property you will be allowed the option to negate the contract without incurring the loss of the 30%. NB: All real estate agents fees are paid at the time of the Boleto.

Once all paperwork has been checked, utility bills paid upto date, property taxes paid and the contracts have been prepared by your Escribano, it is time to complete on the sale and pay the outstanding monies to the owner. The title deeds - Escritura - will be signed by the purchaser and the vendor in front of the Escribano who will formalise the contract. You will then be the legal owner of the property. The title deeds may take one or two weeks before they are ready to be collected during this time the deeds will be registered in the Property Registry. Escribano fees range between 1-4% depending on location and the amount of work that has to be done. All costs will incur a VAT charge Impuesto al valor agregado.

You may be asked to go directly to closing without a Boleto by certain estate agent sin Argentina in an effort to hurry up the sales process which can typically take between 4 and 8 weeks. Be aware that buying the property without a Boleto does NOT secure the property in the same way.

Absentee owners or international investors should probably consider making a power of attorney available for their lawyer to sign contracts on their behalf if they will not be present in the country.

Strangely in Argentina, once you have taken legal possession of the property you may find that utility bulls are in the name of an owner that was not on the title deeds. Due to the fact that changing names and addresses with utility companies can be very time consuming many owners simply leave their name on the bills. There is NO credit risk associated with doing this.

Transferring money into Argentina is straight forward depending on the day of the week and the current legislation of the moment. You are advised to speak directly to the bank who will inform you of exactly what you will be required to do. Banks in Argentina typically charge 1.5% for receiving the funds and many are officially obliged to release the funds in Argentinean Pesos