Real estate in Argentina

Real estate in Argentina

Argentina is a popular South American nation in which to invest in overseas property, but the process itself can be a bit confusing for foreigners. There are a number of steps that need to be taken, and it is very important to have both a good understanding of the process and a good lawyer on your side to make sure everything occurs as it should.

First, when buying property in Argentina as a foreigner, you will need a CDI, or tax number. The process for obtaining one is fairly easy, but personally time consuming. You must go to a local police station with your passport, fill out a form and pay a 10 peso fee. The next morning you must stay in your domicile so that the police can verify your address. They will show up and provide you with an Address Certificate. After receiving this certificate, you must go to the tax office, or AFIP, with 2 photocopies of your passport in addition to the passport itself. You fill out 2 copies of a CDI application and wait, usually a couple of hours, for them to call your number. Once they have verified all the necessary information, they give you the tax number and stamp the application and you can now buy property.

Real estate agents in Argentina demand a fee from both the buyer and the seller, and this can vary from 3-5% + VAT, depending on the location. Know that most properties here are overpriced with a negotiation in mind. If you find a place you like, you make an offer, usually in writing and place a small deposit with the original offer. This temporarily pulls the property off the market while price negotiations continue. After finding a property and negotiating an agreeable price, the buyer typically pays a boleto or down payment of around 30%. This is held by the real estate agent – do not give it to the seller, as you might not be able to get it back if there is a problem with the deal. If you pull out, the money is forfeited to the seller. If the seller pulls out, then they owe the buyer a fee, often up to twice the boleto.

The escritura is the closing date and when you sign the final papers. This is performed with the aid of a notary public, who is very important in this process. The notary in Argentina is actually a lawyer and called an escribano. The title check process is performed by this person, and should be very complete. The Argentine government has a very good title registry, so when it is performed correctly you can be assured that it is good. Title insurance is not necessary because of this, but is still often purchased by the buyer. The buyer chooses the escribano, so make sure you do the work and get a good one. Escribanos charge up to 4% of the selling price as a fee, and most of the good ones charge the higher amount.

The stamp duty on sales has undergone some changes on the past few years, so it is also important to have an escribano who understands the laws on this tax. Typically it is 2.5% of the sale price, but can be as much as 4% in Buenos Aries. The transfer taxes also vary by location, so again, have a good escribano who knows all the local laws and duties. Stamp taxes are usually split between buyer and seller, but this must be put into the contract. The seller also pays some owners fees upon selling.

At closing, the money is transferred in US dollars, in cash on the table. No checks, pesos or wire transfers. This is very strange to most people, and it takes a complete different process to get the money in cash. Because the Argentine Peso fluctuates so widely, the main price is paid in cash and in dollars. The whole process, from getting a CDI to paying the money in cash can take from one to two months typically.