Taxes for purchasing and owning land

[Neirobiologist]

Please, maybe somebody knows information about difference in taxes between the contract price and the fiscal value of the land?

The seller insists on putting low price in the escritura, but wants me to pay him in cash. We make the notary deal. We put the price in dollars. I am the buyer, I want to write the whole price in all papers, in order to avoid smth during the deal or in the future(?).

I can not find the accountant here, who can exactly explain me the way of purchasing the land and the taxes which a buyer pays while he buys a land and in the future while he owns this land. I have taken two consultations with different accountants and they contradict each other. Really, two contradiction consultations. The main question is about annual taxes in the future.

One adviser says that the owner will pay annual taxes from the real contract price, so it is good to show the low price in the contract when I buy a land.
The second adviser says that the owner pays annual taxes only from the fiscal price, so it does not matter what is the prices pointed in the esctitura.

The second question is about taxes which the buyer pays while siging the escitura. There some fees for notary and it seems there is no big difference if I show low or full price.

So what is your experience in this country? Can you share your advice please?
What are the risks if we put underprice (lower price) of the property?
What are benefits for the owner if we put underprice of the property? Or better is writing the full price?

What is the way of collecting taxes here, does the owner pay from the ecritura price or from the fiscal price? as I know it is 1,25% from the price in pesos with official rate (escritura is in USD). Maybe there some more hidden taxes?

Does here exist the escrow bank service, when the buyer puts money on the special account for the seller, but the seller can use this money only after the property contract is registered in the special government agency? thank you so much

 

[mc kenna]

What you are describing is the normal way you buy any property in Argentina, more so if it is rural.
Expect to pay the bulk of the selling price in cash to the seller at the escribano(title company). The amount showing on the title is the fiscal value of the land where your property taxes will be based after you buy. Your benefit is that showing a lower price of what you pay will keep your property taxes low.
Escribano fees, those are paid at the moment of the purchase and it is a percentage of the operation ( based on the real price of the property in most cases).
You mentioned who pays property taxes when selling? i'm assuming this property is behind on property taxes and in order to sell they have to show the seller is caught up and up to date on said taxes, this is negotiated before hand between the seller and the buyer, sometimes the buyer will bring up to date the back taxes in order to close the deal since most of the time the seller does not want to pay out any amount out of pocket, with this said, the amount of back taxes paid by the buyer will be taken off the real price.
Showing a lower price at the moment of the transaction will not affect you in any way when you buy or when you sell,( every one knows the fiscal value of the property is always way off and not updated)so if you were to sell in the future the transaction will be done in the same way.
As far as the contradictions you are finding is due to lack of clarification, what they meant to say is that all property debts and fees at escribano are negotiated with the seller, before a final price is agreed upon. For instance , some times buyer and sellers pay half of all fees of the transactions when the property is up to date and owes no property taxes, and please do not confuse taxes and fees ,ask all the questions you need until you understand before you commit to anything.
So, in conclusion , you never write the full amount on any legal document as this will affect your property tax. you do write the fiscal value of the land and maybe multiply that value by 1,5 or 2 if what is showing is a laughable amount being that the fiscal value has never been updated .
As far as escrow , i never heard of it around here, normally , after everything is negotiated and a final price is agreed upon , the buyer will pay 50 percent or more if he wants to take possession right of way or less than 50 percent and wait until title clears and comes back from the land registry which is a gov office. the remainder of the balance is paid when the title (escritura) is in your name.
I hope this helps.

 

[Neirobiologist]

I hope this helps.

MC Kenna! this helps great, thank you.)))) But still i do not understand about the future annual taxes. I do not care about notary fees. I only care about annual taxes which I would pay every year being an owner of the land. How can influence on the taxes the price from contract or the price from escritura? Somebody says that I pay annual taxes only depending on the fiscal government price of the land, wich is pointed in some government registo. Somebody says that I pay taxes depending on the escritura price. Escritura and fiscal price are the different documents? How is the pointed contract price influence on the annual taxes. What is the difference in taxes between fiscal price and escritura price and contract price? I still do not catch the idea. Please, if you know it, explain me, I need it so much.