Hefty tax on property sale!

[steveinbsas]

Try to sell your property in Buenos Aires as a non resident. You'll get all the education you need on the subject, real fast. Or just ask a qualified Escribano to explain the specifics to you.

Thanks for the evasive non-answer.

You previousluy posted that there was a "new law" in 2010 that applies to non residents iselling property in Buenos Aries.

Do you actually know what you are "talking" about?

Or are youu just making it up as you go along?

And a non resident selling property in Argentina needs a "qualified" accountant to deal with AFIP...not an escribano.

 

[steveinbsas]

Ah Stevie. You really must not have anything better to do today. Like I said, ask an Escribano, something I am not, so I won't pretend to be. I'll leave that up to the rest of you.

I don't really feel like writing a wall of text for you though. Let's just say I just recently went through something similar. Now go count some sheep brother, you need to relax. It's not that serious.

An unexpected tax rate of 35% isn't serious?

It looks like a tax rate of 14% was a very serious issue for the individual referred to in the first post of this thread.

If it wiped out all of his profit it looks more like a tax rate of 100%.

 

[TheBlackHand]

Lol.

I said my piece. Believe what you want. I was just giving a head's up to non resident property owners. I could care less about earning brownie points on the internets.

 

[steveinbsas]

Lol.

I said my piece. Believe what you want. I was just giving a head's up to non resident property owners. I could care less about earning brownie points on the internets.

It isn't a matter if "brownie points" it's a matter of credibility. Other expats (like Arlean) who are considering buying property in Argentina are searching for clear information on the subject, and they hope the "veterans" here will provide it.

As far as I know. AFIP charges 30% tax on assumed rents, and they were doing so prior to 2010. If there was a new law that applies to the sale of property owned by non residents in Buenos Aires that went into effect in 2010, why won't you provide any information about it?

I sold my apartment in Recoleta in 2009 and I consulted with two Argentine accountants. The one that spoke English said I had to do everything a (non resident) foreigner had to before I could sell, even thought I already had temporary residency.

The accountant my Escribano worked with knew better, even though he did not speak English.

I was able to sell easily and quickly, but I did have to go to AFIP with my accountant to get into the system. The escribano only went along becasue he also spoke English, but he did not deal directly with AFIP.

When I was filing my taxes a year later I asked if I had all the documentation AFIP needed. My accountant answered in the affirmative and added, "Yo soy AFIP."

I also sold again as a resident in 2010 and did not owe tax on the "gain" in pesos.

 

[ndcj]

I suspect Steve is right.

There is no magic 35% tax on the sale of property by foreigners. Capital gains do not receive any kind of special tax treatment in Argentina and capital gains through the sale of personally held real estate are not generally taxed except as part of a business concern.

The OP didn't provide any details, and the most likely explanation is like Steve said -- a combination of ITI (that you cannot avoid as a non-resident), assumed income from renting the property out, some years of unpaid impuesto a los bienes personales and penalties and interest to go with all of these. This will easily add up to 14% if you've owned the property for a few years and never bothered with paying taxes.

If you're a non-resident who owns a non-income producing property, you need to keep copies of the facturas of the electricity and gas to show AFIP in the future that you didn't rent the property out. If you rented it out and didn't pay income tax on your clearly Argentine sourced income, then it's time to pay the piper.

This is pretty much how Argentine tax collection works -- at the very least, always pay your taxes on at least the things that they'll catch up with you eventually for. Pay your ABL, patentes, impuesto a los inmuebles, tax on rental income if you're a non-resident or own several properties, because when you go to dispose of the asset in question (house, apartment, car) they will catch up with you

Better yet, pay all your taxes that correspond, otherwise don't complain about the state of public services, nor when they eventually come to collect their pound of flesh at the time of sale.

 

[CarverFan]

There was no bienes personales to be paid, ndcj, because the apartment was below the threshold for this kind of tax. His ABL was up to date. He was not negligent in any way, it seems he is now being accused by some posters as if he was fined for trying to evade due payments!!
The accountant he spoke with about it said that it was a tax on the peso profit on the value of the apartment. If I find out more, I will update.

 

[Panamahat]

The accountant he spoke with about it said that it was a tax on the peso profit on the value of the apartment. If I find out more, I will update.

 

[Panamahat]

The accountant he spoke with about it said that it was a tax on the peso profit on the value of the apartment. If I find out more, I will update.

Sorry for the double post.
The most disturbing point in this thread to me is that taxes owed as a non resident are now based on the Peso value of the property.

With inflation now at 27% this could escalate into another Peso crisis, a rapid deprecation of the Peso against the dollar. This brings currency uncertainty front and center into any real estate transaction. Not to mention getting dollars out of the country.

 

[steveinbsas]

The accountant he spoke with about it said that it was a tax on the peso profit on the value of the apartment. If I find out more, I will update.

Sorry for the double post.
The most disturbing point in this thread to me is that taxes owed as a non resident are now based on the Peso value of the property.

With inflation now at 27% this could escalate into another Peso crisis, a rapid deprecation of the Peso against the dollar. This brings currency uncertainty front and center into any real estate transaction. Not to mention getting dollars out of the country.

Aren't all taxes in Argentina calculated on the peso value of an item (including property) in the first place?

It looks like non residents are subject to a tax on the profit between the pruchase price and selling price (always stated in pesos on the escrituras..usually along with the dollar price), but I'm not sure of the rate. There have been posts by non resident sellers who had to pay 30% on "assumed" rents before they could sell, but none that I can recall about a tax on the profit in pesos.

I do "recall" a post that as of March 12, 2012 (?) all real estate sales were to be in pesos only, but I'm not sure of the date or the details of the new regulation, if it actually exists.

I got the impression that dollars brought into the country and converted to pesos could not be reconverted into dollars to complete the purchase of a property. I don't know if the seller can legally buy dollars with those pesos after the escritura. Even if they can, the amount of dollars would be limited to the price in pesos which is stated on the escritura.

Perhaps that will result in some depreciation of the value of the peso, and perhaps it will result in a decline in propery prices, but with 27% inflation real estate prices may not decline, but may not increase at anywhere near the rate of inflation.

It's already difficult to get dollars out of the country.

 

[solerboy]

Based on my friend's apartment, he is paying one third of the peso profit in tax. But in dollars he is paying 100% of profit. AFIP are clever guys.

I dont think you can criticise (or praise) the tax authorities for doing their calculations in their own national currency.