Buying Property in Buenos Aires

perry

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Your information fifilanoche is completely wrong . GDP per capita in Argentina is US$ 14200 per capita 2008 estimate. http://flagcounter.com/factbook/ar

Most peoples incomes in Argentina of the higher classes are in cash and I can state categorically this US 500 dollars a month income is an absolute myth for the top 20 percent of Argentines.

Regarding third world or First world this also is a ridiculous argument as countries like France, Italy and most of Europe were worse off when these buildings were built meaning the quality of architecture here from the 1920s is vastly superior in Buenos Aires
 

gouchobob

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pericles said:
Your information fifilanoche is completely wrong . GDP per capita in Argentina is US$ 14200 per capita 2008 estimate. http://flagcounter.com/factbook/ar

Most peoples incomes in Argentina of the higher classes are in cash and I can state categorically this US 500 dollars a month income is an absolute myth for the top 20 percent of Argentines.

Regarding third world or First world this also is a ridiculous argument as countries like France, Italy and most of Europe were worse off when these buildings were built meaning the quality of architecture here from the 1920s is vastly superior in Buenos Aires
I would like to say that I think Pericles is certainly very knowledgeable about the local real estate market. My opinion (even though I have not met the man, based on his posts) is that if you want to buy real estate he is better choice than the vast majority of people you could deal with. We disagree on the outlook for Argentina in the short-term( with a half-way decent government Argentina would do fine). The long term outlook for Argentina is good if the political problems there can ever be solved.
 

SimonM

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Well im glad this has genertaed a good debate ....the fat is that life is mich simplier than it seems...each one of us are going to create our own raelity...thus you can connect and take what ever you wish from life in the good sense....as there are infinite universes there are infite outcomes to what can happen in your lives....what ever you desire as thought can be turned into matter...that`s how everthing starts ...just with an idea.....so to concluded i would say that the outlook here is excellent ..why ?...because i wish it to be..simple as that ...and for those who see the skies grey, well , we all know how that story ends.
 

EMR

Registered
Well, my last comments on this issue, Steve, I agree with you on the buying versus renting for living and that is a smart thing to do. With regards to investments outside of your primary residence, I think it is up to each person, certain investments are better for certain people and it all depends on their risk tolerance etc. This is a huge world and there are multiple investment options out there and many great ones, I think it all depends on your passion for BA your feeling about the future, and also what your needs are. All I am trying to say, is there are great investments in BA for people that want them, and you can do things perfectly right.
Just be careful, and do it right. With respect to France, who the hell wants to live in France? I worked for a very large French financial company for years and France has some very serious problems with their economy, pension scheme, and finances in general, real estate is extremely high and I would bet that BA will rise much more in the future than Paris. At 2000 to 2500 a meter, you have room to run with economic growth, the Euro on the other hand is at near all time highs and so is real estate, by low sell high right? France, please, I suggest if you love it that much, go there and forget Argentina.
Real estate warranty on new buildings for 3 years in much more than most countries which are typically 1. So, in the end, no matter where you are in the world, the quality of the people you deal with is paramount and that is what people should assess when investing.
If you like BA, I think you have a great future investing if you choose to do so, if you do not want to, oh well, your choice and plenty of other good options.

GouchoBob, I agree with part of your statement, I think Argentina will explode with growth if they elect a center right president and facilitate investment. The Elections a few months ago were encouraging with Kirchner losing, that being said, I think short term is actually ok, I think there are some interesting opportunities and if the right government comes in, things will fly. That is why the risk reward is so interesting to me.
 

fifilafiloche

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How can GDP/person accurately represent disposable income, since taxes are included in the output? How do the 20% wealthiest represent the AVERAGE population, as mentioned in my prior post. Are those statistics produced by the same office claiming an inflation of 10% a year in Argentina while in reality it s closer to 30%?

I wouldnt recommend anybody to invest in France right now. Prices have gone up 160% over the last 10 years, while salaries only rose by 40%. This puts a high economic pressure on households who have also to deal with age pyramid unbalance for health and retirement spendings (baby boomers). The friggit tunnel shows how housing prices have been bubbling out of their long term trend since 2004 : http://imagik.fr/uploads/159481 Housing expenditures shouldn t exceed 1/4th of a household disposable income, they are approaching 1/3 there, which weights on the countries growth capacity, since what is spent to pay a rent to the owner or a bank can t be spent on goods and services. Government tries to deflate that bubble as slowly as possible to avoid a deep recession like in Spain, with free housing credits and tax deductible measures on that sector. This lack of courage might lead to a long period of swampy economic conditions like when the Japanese housing bubble started to deflate at the beginning of the 90s.

While argentine wealthiest population, just like in Russia, prefers to invest outside of their homeland, why should foreigners take the risk that most informed locals dont want to take?

Actually i wouldnt encourage any speculation on primary basic needs : food, accomodation, health for moral reasons. Remember that the primary use of real estate is to give people the security of a home, not capital gains.

Speculate on gold as much as you want, it is needed only by some few jewellers. Speculate on oil, so that we can get a more breathable atmosphere and rediscover the benefits of physical efforts, but let people eat, sleep and heal at affordable costs. :eek:

This is not sound that young people can t take their independence and have to live with their parents till the age of 35. There is no rational reason for them to enslave themselves into a 30 years credit plan to buy 5 meters on 10 meters rabbit cage that will be too small once they get children. :mad:

In other words, short term financial interests shouldnt prevail on long term intergenerational balances. This situation would lead to increasing instability, insecurity and poverty.

My two cents of eurofranc.

PS : as of advanced construction quality with "nouveau siècle" style, here is a bargain you can t miss in Detroit,USA
http://i.pbase.com/v3/11/488911/2/49948739.TrainStationHDR03.jpg
http://www.djibnet.com/photo/detroit+train+station/?vm=d

Beautifull facade, historic place, ample volumes, unique location, right in the center of a major town at unbeatable price per square meter. Beware of the neighbourhood tho, this is not the safest area in the US and a job can be hard to find. Would maintainance count in the apreciation of a building after all?
 

steveinbsas

Registered
Pericles' answer to fifila's question was great, and I would like to add what I have learned from experience. I did not meet Pericles until this year, so when I write about the real estate agents I met in 2006, please remember that he is not included in that group.

When I was shopping for an apartment in 2006 I asked every real estate agent I met about taxes. I was told about the ABL (Buenos Aires city tax) and was informed that they were very low and that the taxes would be about $200 pesos per year for the apartment I was buying in Recoleta. However, not one of more than a dozen real estate agents ever mentioned any other taxes.

In early 2007 I read about changes to the "bienes personales" tax in a newspaper article on line http://www.casarosada.gov.ar/index.p...k=view&id=1262, so I returned to the real estate office to inquire about it. I was told that I was not liable for those taxes in 2006 (the escritura was in late October) and more or less to just "forget" about it. The agent said there was an exemption for the tax that was going to be raised in 2007 to an amount greater then the "purchase price" of my apartment and as a resident I would not have to pay them in the future, either.

If my memory is correct, the tax rate for residents was .50% for properties over $102.000 in 2006. I believe the tax rate for nonresidents at that time (from zero) was .75%. The tax is assessed to the owner of record as of December 31st and there is never a bill sent to the property owner for these taxes, either.

In 2007 the " deduction" or "exemption" for the bienes personales taxes for residents (based on the purchase price of the property as stated on the escritura) was raised form $102,000 pesos to $300,000 pesos. As the price of my apartment was less than $300,000 pesos, I thought I was in the clear, but I never asked an accountant if I needed to do anything regarding this tax. The tax actually actually applies to all personal assets, but property and vehicles are all that seem to matter. The tax rate for property owned by non residents is now 1.25% (from zero).

At a recent gathering at Captaindave's I found myself at a table with three other expat property owners who had never heard of the bienes personales tax and of course did not realize that it applied to them! Coincidentally, all three also bought their apartments in 2006. Only one of the has a resident visa and the other two come and go (and are actually living here) on perpetually extended tourist visas. The expat with residency is in exactly the same situation I was and owes the resident rate (plus the penalty for nonpayment) for 2006, but I fear the other two are liable for the nonresident rates (plus penalties) for all three years they have been the owners of record. There is no deduction or exemption for nonresidents.

Even with residency and no tax liability, my accountant told me it is still necessary to file an annual "tax return" with AFIP to be eligible for the deduction unless (worldwide) income and assets are low enough to ask to be exempt from annual filing. I read that any foreigner who lives in Argentina more than six months a year becomes a resident for tax purposes, but those who continue to live here on "extended" tourist visas do not appear to be a target of the tax man. Only those who own properties have something to worry about. Actually, there is no need to worry. Just do the math and calculate how much is owed (including the 40% penalty) then add about $400 pesos per year for the accountant to "file" the returns.

Regarding bringing money into the country, the 10,000 dollar "limitation" on funds brought into the country applies to undeclared currency. It is possible to wire funds in much higher amounts (at least from a bank the United States) directly to Argentina for the purpose of buying an apartment. All transfers over $10,000 dollars will be reported to the IRS. While it is legal for a nonresident foreigner to use a casa de camboio, I believe that the funds must be transferred into the casa de cambio's account with the Banco Nacion of Argentina. I believe the amount can exceed the value stated on the escritura by a small percentage (to cover the closing costs I imagine), otherwise (unless there have been recent changes) 30% of the excess must remain on deposit with the Banco Nacion for one year without interest.

A foreigner with residency can transfer higher amounts and avoid the 30% hold, but must be able to declare (if not document) the source of the funds in order to demonstrate they are not subject to taxation in Argentina. I also have read that it is "completely legal" for a foreign buyer to transfer funds to a foreign seller's bank outside of Argentina when buying a property here, but I haven't done it.

In addition, if the property is valued below $300,000 pesos, the seller has residency, and is buying another property, there is an exemption of the transfer tax (ITI) and the paperwork can usually be completed within a week. If the seller is a nonresident foreigner the process is far more complicated and more lengthly...up to three months. The seller must even submit utility bills for the period of ownership so that it can be determined if the apartment was rented while the owner was not in Argentina. Unless the utility consumption drops to near zero while the owners are abroad, the tax man will assume the receipt of rental income. If the apartment really is rented, it's a good idea to declare the rental income and pay tax annually to avoid additional taxes and penalties. They will even check the seller's passport to determine when they were in Argentina versus when they were abroad in ordered to "guesstimate" rentals.

Finally, as I bought an apartment in Nunez one the same day (and in the same room) as the sale of my apartment in Recoleta, I do not have any experience or information about transferring funds out of Argentina.

I hope others will add more information to this topic and update any numbers I cited in case they have recently changed or were inaccurate in the first place. I suggest anyone considering buying a property as an investment (to rent) read the following article: http://www.globalpropertyguide.com/L...axes-and-Costs
 

Carolina Girl

Registered
I am amazed at the generosity that all of your contribute to help us neophytes.
I am going to be collecting unemployment check and social security while visiting in BA in the next month and assume I can just use my ATM for withdrawals from my us bank account. does anyone see a problem for me?

I have one other question? What is the best unit to bring dollars for exchange? $1, $5, $10 or $50s? Does anyone tip in dollars any more? Or is that an insult?

Diana
 

citygirl

Registered
You can use your ATM card at machines down here although there are costs associated with it (do a search on ATM and fees).

Re: bringing dollars - I assume you'll plan on changing them into pesos here. Easily done but for that, I would bring large currency so you don't have a huge amount of cash to carry. Supermarkets will usually change smaller bills (ie, you pay in dollars for groceries and get the change in pesos).

If you're renting an apt, it's always good to have dollars with you so you don't have to deal with the headache of getting large sums out of the ATMs (which is also difficult).
 

Ries

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I have never had a problem spending or exchanging US $100 bills- as long as they are in very good condition.
They need to be clean, unfolded, and free of tears, holes, scotch tape, and other damage.
 
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