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Argentina: A guide to buying property

Buying property in Argentina can be a protracted process, especially for overseas investors with limited knowledge of how the system works...

As such, the following guide will help prospective investors navigate a potential real estate minefield.

Getting started

To facilitate the purchase of property in Argentina, the buyer is required to have any of the following types of individual tax number:

• CUIT (Clave Único de Identificación Tributarial).
  
  
• CUIL (Clave Único de Identificación Laboral).
  
  
• CDI (Clave De Identificación) number.

CUIT

The CUIT is an individual tax identification Code, which Companies and organizations in Argentina are compelled to have in order to pay taxes. If you have a business, you can apply through the Administración Federal de Ingresos Públicos (AFIP) in the area in which your business is located.

In the absence of a business  address, your Identity Card address will suffice. There are two ways to apply for a CUIT:  in person or by utilizing a third party. When applying yourself, you are required to present the application form to the AFIP officer.  If a third party applies on your behalf,  the application form will need to be properly certified by the police, a bank or a public notary.

The form you need when applying is the “160/F form”. Individuals, as well as members of cooperatives, either being Argentineans or foreigners that wish to apply have to present this document together with a copy of their DNI. Foreigners that do not have a DNI will have to bring a copy of their passport or certificate of the immigration office (Dirección Nacional de Migraciones). AFIP will give you a copy of your application.

CUIL

This is a unique code for work identification purposes. The CUIL is an individual tax identification number used by employers to withhold income taxes and to transfer it to the government. You need this card in order to make government and business transactions in Argentina and to be assigned to the Argentinean Company's payroll.

There are several ways to apply for a CUIL:

• Through the Administración Nacional de la Seguridad Social (ANSES) website: www.anses.gov.ar.
  
  
• In person at Unidades de Atención Integral (UDAI), Delegations or Offices of ANSES.
  
  
• By telephone, through the telephone customer service units/ Unidades de Atención Telefonica (UDAT) after which documents will have to be send by mail

The application for a CUIL can be done by the employer or the employee at the nearby ANSES office or by telephone.

Argentineans or foreigners residing permanently in Argentina should also show their DNI or driving license and a copy of document which states the number of your identification document, name and last name, and your current address.

Foreigners residing temporary in Argentina and who do not hold Argentinean identification should show a means of identification and a copy of the Certificado Nacional de Población y Migraciones (DNPyM) or an entry permit issued by the Argentinean consulate or international agreements.

CDI

A CDI Number is very similar to Social Security number in U.S or a National  Insurance number in the UK.  You can go to the local police station with your passport and your local address to apply. They will verify your local address and provide you the forms that you area required to file.

A nominal fee is required, and after that you need to visit the AFIP Office, the tax authority in Argentina known as Dirección General de Rentas. The CDI number is effectively your tax ID.

Negotiation and down-payment

Once you find a place you like, your realtor will contact the owner's realtor to initiate price negotiations. It is normal in Argentina that property is overpriced to give room for negotiation.

When making an offer you are expected to make a security deposit which will be held by the realtor. This deposit is called Reserva de Compra. It is recommended not to leave a cash deposit in case the seller does not accept the offer. Normally a time period during which the owner can consider your offer is agreed upon.

If the seller accepts the offer made, the property is withdrawn from the market and preparations for the boleto de compra-venta or the escritura are made. The boleto de compra-venta is the sales agreement. At this point the buyer generally makes a down payment of 30% of the total amount.

If the buyer backs out, he/she loses the down payment. If the seller backs out, buyer gets back the 30% down payment and the seller is fined an equal amount payable to the buyer. The percentage of down payment is normally 30% but can be negotiated between the parties. The boleto is drawn up by a lawyer or public notary.

After the boleto the parties finalise the sale at the escribano or public notary where the ownership title will be given to the buyer. If the parties wish to make use of a boleto a date to sign at the escribano is normally set at least 30 days after the signing of the boleto. If you want to finish of the buying process as soon as possible you can also go directly to the escribano.

General practice is that all costs occurred before signing the final papers at the notary public are to be paid by the seller. All the costs after the final contract at the notary public, such as the costs of transferring names on the papers of ownership and the commission for the notary public are paid for by the buyer.

Navigating the mortgage market

When buying property, you might think of getting a mortgage. In Argentina, mortgages became very difficult to obtain since the crisis. It furthermore became common use to pay for property in cash!

However, little by little doors have been opening and mortgages and transfer payments are getting back in use. For the average Argentinean at this moment getting a mortgage is hard. The minimum net income required is around AR$ 1500 /month.

A further requirement is that you may not be older than 75 years on the estimate date of complete payback. Foreign nationals have must spend at least one year working legally in Argentina in order to get a mortgage. Of course, you may be able to get a loan in your home country, but securing this solely on an Argentinean property will be difficult.

Mortgages are offered on buying new estate, used estate, renovating or expanding estate or building own housing. For new estate financing is offered up till 80% of the value as long as it does not exceed AR$ 250,000. For used estate the financing maximum is 75% of total value without exceeding AR$ 250,000.

Renovation and expansion of estate can be financed up to 100% without exceeding AR$ 50,000. Mortgages to finish construction are given when at least 65% of the total construction is already finished.

Banks offer mortgages for different terms, different interest percentages and demand different requirements. However, mortgages are offered generally for periods of 5, 8, 10, 12, 15 and 20 years. Interest is around 7.5 - 11% for loans up to ten years, loans with a duration of more than ten year are subject to approximately 9 - 12%. Interest rates move a lot in Argentina, so this is a very rough guide!

Essential documents

There are certain documents you should see before you sign any sales contract.  These are the Informe de dominio and the Informe de Inhibiciones.

A copy of the Informe de dominio can be solicited for at the Registro de la Propiedad Inmueble, the estate ownership register. This document will state the exact dimensions of the premises, who the actual owner is and if there are any problems concerning unpaid mortgage(s).

It is very important to check if the dimensions of the actual premises correspond with the dimensions stated in the Informe de dominio. The Informe de Inhibiciones can also be solicited for at the Registro de la Propiedad Inmueble. This document states if the owner is allowed to sell, an example of which is when real estate taxes have not been paid.

The sales contract

A sales contract (boleto de compra-venta) normally states the following details:

• Name, nationality, address and identification of the seller and buyer.
  
  
• Address of the propery.
  
• Declaration of being registered at the Registrado.
  
  
• Price, currency and method of payment.
  
  
• Date and address of escribano where payment will take place.
  
  
• Statement of how premises will be handed over (furniture, with/without tenants, etc).
  
  
• How to resolve possible conflicts between seller and buyer.
  
  
• Statement signed by escribano that the seller has no outstanding bills on the premises.
  
  
• Name and registration number of the escribano handling the sales.
  
  
• Name and registration of realtor.
  
  
• Signatures of buyer and seller and date of contract

For more information about buying property in Argentina, please visit http://www.justlanded.com/english/argentina, an excellent and informative resource.