Hefty tax on property sale!

[jago25_98]

How do they stop you taking cash and never coming back?

 

[steveinbsas]

Pat downs and sniffing dogs.

 

[solerboy]

There is a limit of us$10,000 when leaving the country so it would only take a couple of weeks doing daily visits to Uruguay to get a good amount out.

Or treat a dozen trustworthy friends !

I have been acting as a power of attourney for a friend and AFIP are finally going to release the Certificate of Retentions this week. After 4 months but largely our fault not theirs.

I will report back on exactly what additional taxes are charges. She has now paid all income taxes, asset taxes fines and interest. She has never been resident in Argentina.

So it will be interesting to see if the want any more.

watch this space.

 

[La Fleur]

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.

The thread originator might like to look at this issue again. My accountant is emphatic that the threshold does NOT apply to people without permanent residence - ie temporary residents (including 'perma-tourists') must pay bienes personales on the full value of their real estate, including their personal homes. This can mount up to a lot if a property has been owned for some time and the owner was under the impression that they did not have to pay this.

I have no idea whether this is relevant in this particular case, but I thought it useful to share that perspective here.

 

[demokritos]

CarverFan,
Are you sure about this? I apologize about jumping in, but my understanding is that the bienes personales exemption for assets under 300k pesos (roughly) does not apply to non-residents - they must pay the 1.25% rate (as opposed to the .75% resident rate) regardless of the value of the property.
I'm well under the 300k exemption, and I've been paying my bienes personales for years, because I am a non-resident. It sounds like your friend is also a non-resident, because at one point you said he was charged income tax on AFIP's assumed rent calculation... Although later in the thread, you seemed to indicate that the taxes were in fact capital gains taxes based on change in documented purchase price due to peso devaluation (technically I believe there is no capital gains tax in Argentina, so this explanation does not make any sense).

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.

 

[steveinbsas]

My accountant is emphatic that the threshold does NOT apply to people without permanent residence - ie temporary residents (including 'perma-tourists') must pay bienes personales on the full value of their real estate, including their personal homes.

Perhaps something has changed recently, but my accountant has a different opinion than your accountant...at least he did in 2007 and 2008 when I had temporary residency (and a DNI) and did not pay any bienes personales on my apartment. The only reason I paid in 2006 was becasue the "threshold" then was much lower than $305K pesos and I paid the resident rate on the full value of my property as stated on the secritura.

One non resident couple I know says they pay the bienes personales based on the ABL figure, not the "price" on the escritura. That makes sense to me as the ABL can be updated annually, but everyone else I know pays the tax based on the price in pesos as stated on the escritura.

 

[solerboy]

I would love to pay Bienes Personales on my ABL figure which is about 50% of the price I paid.

 

[jimdepalermo]

temporary residents (including 'perma-tourists') must pay bienes personales on the full value of their real estate, including their personal homes.

Your accountant is right that all property owners, whether legal residents or not, must pay annual taxes on bienes personales. Residents pay 0.50 - 1.25% of the total value of holdings on 12/31 of each year. Non-residents (i.e. those without a DNI) pay a flat rate of 1.25% of the total value. but, of course, they're not required to pay taxes on property outside Argentina, which residents are required to declare.

Just to clarify, the exemption amount, currently $305.000, does not reduce the taxable base. For example, if you own personal property valued at $400.000, tax is due on $400.000, not on $95.000. On the other hand, if the total value of your personal property is $300.000, then NO taxes are due. (These values are all in pesos.)

The $305.000 exemption applies equally to residents and non-residents.

Fyi, here's the tax rate chart from AFIP's English-language pages at http://www.afip.gob.ar/english/about.asp.

. Amount . Tax rate
FROM $ 305.000 THROUGH $ 750.000 . 0.50%
FROM $ 750.001 THROUGH $ 2.000.000 . 0.75%
FROM $ 2.000.000 THROUGH $ 5.000.000 . 1.00%
FROM $ 5.000.000 ONWARDS . 1.25%

I have a call in to my accountant regarding CarverFan's original post. I will post more info when I hear from her.

 

[CarverFan]

My friend is re-submitting with a new accountant who said there were errors and he shouldn't be paying more than $20,000. Will update.

 

[earlyretirement]

Your accountant is right that all property owners, whether legal residents or not, must pay annual taxes on bienes personales. Residents pay 0.50 - 1.25% of the total value of holdings on 12/31 of each year. Non-residents (i.e. those without a DNI) pay a flat rate of 1.25% of the total value. but, of course, they're not required to pay taxes on property outside Argentina, which residents are required to declare.

Just to clarify, the exemption amount, currently $305.000, does not reduce the taxable base. For example, if you own personal property valued at $400.000, tax is due on $400.000, not on $95.000. On the other hand, if the total value of your personal property is $300.000, then NO taxes are due. (These values are all in pesos.)

Fyi, here's the tax rate chart from AFIP's English-language pages at http://www.afip.gob.ar/english/about.asp.

. Amount . Tax rate
FROM $ 305.000 THROUGH $ 750.000 . 0.50%
FROM $ 750.001 THROUGH $ 2.000.000 . 0.75%
FROM $ 2.000.000 THROUGH $ 5.000.000 . 1.00%
FROM $ 5.000.000 ONWARDS . 1.25%

I have a call in to my accountant regarding CarverFan's original post. I will post more info when I hear from her.

Jim is exactly correct on this. Non-residents don't have the exemption. I believe they did in previous years but you have to remember that the laws are always changing at AFIP. I believe they changed the laws so that non-residents were exempted from the minimum limits in 2008. They kept changing the laws almost every year so whatever the law was back previous to that you have to remember it changes all the time.

There is NO special tax for non-residents if they are up to date on all their taxes including their annual asset tax, ABL, rental taxes (if they are renting out their unit).

There is a 1.5% transfer tax that all non-residents pay based on the value they are using on the title deed. There is also a stamp tax of 2.5% and the buyer and seller typically split this 1.25% each.

The problem for many expats or non-residents is that most of them don't understand the tax obligations and either aren't paying their annual asset tax or mistakenly assume there is some exemption for them. The laws are quite different for locals vs. non-residents.

Also, for non-residents, AFIP typically asks for every single page of your passport. If you have renewed passports, they even want to see copies of all the pages of your previous passport.

It's horrible but basically it's on you to prove that you weren't renting out your property and earning income from it. They will also ask for utility bills so they can see usage of electricity, gas, phone bills, water, etc. I've even seen situations where they went to go talk to doormen in the building.

The key is not to lie to them. I've seen a few non-residents that lied and said they were using it or their "novias" and AFIP went to the building and found out they were renting it.

They WILL assess a tax and basically are guessing on the amount based on what they think you might have rented it for. It's totally crazy but true.

If your friend was living in it all those years, no way he should have to pay some phantom tax.

I've found the vast majority of accountants in Buenos Aires have no clue what they are doing. Especially as it pertains to non-residents. Also most of the people at AFIP don't have any clue either. You can talk to 10 different AFIP offices and get 10 different answers.

Lots of red tape in Argentina but it pays to know the laws. And as others correctly mentioned, it's essential to pay ALL the appropriate taxes that you legally are liable for. Especially ABL and annual asset tax. AFIP has this CRAZY interest and penalties which can be up to 30% a YEAR. Totally crazy. And if you're renting out your property it's better to at least declare something each month of the lease. If AFIP sees regular rental income tax payments, they typically will leave you alone when you sell.