Buying Investment Property in Argentina

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Off Plan Property in Argentina - Investors' Guide

Argentina is back on track after a long time in the doldrums, with an expanding economy, huge infrastructure improvements and a massive investment in to real estate especially in Buenos Aires. 2007 was an incredible year for Argentina, only narrowly missing the levels of 2006 prices in the capital rose a further 13% on top of the 16.4% increase the year earlier according to Reporte Inmobiliario who keeps a professional eye on residential property prices in Buenos Aires and who expect an average yield of just under 5.5% with come upmarket areas of the city are proffering more than 8% for high end apartments and a little over 6% on more residential properties in the suburbs

There are no restrictions on real estate investments and property purchases by foreigners once they have obtained a CDI - Clave de Identification- which is a fiscal number issued by the government.

Rental income in Argentina is taxed at 21% for non residents plus a tax on personal Assets, an annual real estate tax and other charges. Residents and nationals are taxed on rental yields together with their regular income tax - Impuesto a las ganancias

CGT - Capital Gains Tax -is no applicable to properties owned by non-residents; however properties that are owned by companies are charged a corporate income tax of 35%

Inheritance Tax Argentina does not charge inheritance tax or gift tax

Residents of Argentina are liable for income tax on their worldwide income at progressive rates

The total cost of buying and selling a property in Argentina is between 6% and 8.5% of the value of the property.

Notary Fees- Notario - are typically 1-2%

Estate Agents commissions are 3-5% plus VAT - Impuesto al valor agregado at 21%.

Most real estate purchases are paid for in cash - mostly in dollars - as finance in Argentina is not favourable at present

Rentals in Argentina can be freely negotiated, it can be indexed to inflation and it must be payable on a monthly basis. Improvements in legislation have shortened the time it takes to evict bad tenants.

Economic Growth in Argentina

Up until 2001 the Argentinian Peso was pegged to the dollar, but finally after years of government spending it was forced to devalue. The peso floated at around 3 to the dollar and ruined many people and crippled companies.

However since the low point of 2002, the per capita GDP has grown by approximately 40%. Much of this growth has been due to President Nestor Kirchner, who was in charge 2003-2007. His successful strategies for growth and improvement rescued the country from crisis, reduced poverty, lowered unemployment and made the decision to pay off nearly $10 billion dollars in IMF loans, back in 2006, which was two years ahead of schedule. Today Argentina is one of the richest in Latin America.

Cristina Fernandez, the wife of former President Kirchner is now the President of Argentina and she continues to welcome foreign (property) investment in Argentina and improve foreign policy, pay off some more of their foreign debt, as well as head the fight against inflation. As these improvements continue, exports will increase, industry will encourage lower unemployment, which leads to a wealthier market.

Long term property investment strategies in Argentina are quite probably the most recommended at the moment. Demand for rental properties, inexpensive transaction costs and low cost of living are all positive signs for investors in property in Argentina