Tax

TAX issues
Today, Tuesday 10th July 2007, I had a meeting with a tax specialist
and she gave me the following information regarding foreign people
buying properties in Argentina.

1. You must have proof of where the money originates from i.e.
savings, bank   loan, second mortgage, sale of property etc. The
following documents are sufficient for proof:

i. a copy of bank statements or
ii copy of letter from solicitors showing that a property has been
   sold and the money received or
iii copy of documents showing that a loan has been approved and
   money paid or
iv any relevant documentation.

These documents are needed only to show that all money is legal and
above board.

2. On arrival in the country, you need to get a tax number which is
called a CDI. There are two places in Mar del Plata where this can be
done and it is a very simple process. All you need is your original
passport, a copy thereof and a small fee. You will also need an
address in the city where you are buying and this can be the hotel you
are staying in.

3. There is a yearly tax payable on each property of 0.5% - this is
calculated on the value of the property when purchased - the
purchase price will appear on the title deeds.

4. On the sale of the property, there is a tax payable on the profit of
between 1.5% and 3% (will double check this).

5. When sending money to purchase a property, it is important that
the exact money is sent and no more. This can include the
conveyancer's fee and estate agents fee. I can forward details of
ways to send money here when necessary. All transactions are
carried out in cash and the bank or money house will bring the money
on the completion day to the conveyancer's office, where it will be
counted and exchanged for the keys to the property.

6. Normally there are three steps to buying a property as follows;:
i. a reservation deposit of approx. u$s1000 and dates will be
    agreed for the boleto (intermediate stage) and completion.
ii. a boleto two weeks later - 30% of the value of the purchase is
    handed to the agents who will keep hold of this money until step 3
iii. Escritura - completion of the transaction - both the purchaser,
     the vendors, the estate agents and the conveyancer will meet to
     complete the transaction. All parties will also meet at the boleto.

If the vendor pulls out, not only do you get your 30% deposit back,
they have to pay the equivalent of 30% to you compensation.
Because of this strict law, this situation never occurs.

Between reserving a property and completion, the conveyancer will
do thorough checks on the title deeds and check that there are no
debts or mortgages outstanding. The agents will have all the original
bills from the property to show what bills the property receives and
details about monthly service charges for apartments. Because there
are usually no mortgages involved, most people don't even bother
with surveys, especially when it involves apartments. Even so,
surveys are recommended on older properties.

It is possible to skip step two if there is a lack of time and to go
straight to completion, provided the conveyancer has enough time to
do the searches.

We use a well known conveyancer (known here as a escribania) and
have never encountered any problems. We paid u$s 1000 on the
purchase of a property value u$s 43,500. This is about 2%.

The tax specialist charged us 16 pounds for a 40 minute consultation
today, so if anybody has any queries, I can contact her and even go
and see her again.

One last thing, the agents charge not only the vendor, but also the
purchaser a fee and this is normally 3% each. Although this sounds a
lot, in reality, as properties are much cheaper, it doesn't work out too
much in comparison to the UK. Quiet often, the estate agents share
the fee, because they normally work together by ringing around the
agents to find properties for customers.

I hope this information is helpful.