Wham here comes the tsunami

garryl

Registered
In order to make any sense to buy, the real value of the real estate (in dollars) must crash by 50%, and a fake purchase must be reported like what Argentines have been doing in years.
In general, Argentina real estate market has zero attraction to real investors. But it's the only choice for local Argentines to hedge inflation here. The other way is to move the $ abroad, which is what wealthy Argentines do.
 

garryl

Registered
Yes



Yes from 2018 onwards
Stupid new law! The front taxes and complicated selling taxes was offset by no capital gain tax before. One of argument to buy real estate in Argentina is that there is no capital gain tax. What 's the point for investors to come to this country ? If you add new taxes, you need remove some old
taxes.
 

perry

Veteran
The taxes now for non residents to sell including this new tax is over 20 percent more or less on deeded price. This only applies for purchasers from 2018 and onwards. Prior buyers pay approximately 7 to 8 percent taxes .
 

citygirl

Registered
Real estate is not for the faint of heart in Argentina. When we sold our farm at the end of 2016, part of the payment was another piece of real estate which was rented out to a commercial enterprise. Phenomenal location, great rental history, etc. The buyer of our farm said it was worth X. We talked to several real estate agents who told us it was worth less than X but still a worthwhile asset. Once it became ours, all the headaches began. Tenant issues. Slow to pay their monthly rent. The building had issues and monthly expenses skyrocketed, taxes, etc, etc, etc. We sold it in 2018 at a great deal less than what the "experts" assured us it was worth 18 months prior but we were just happy to be rid of it.
 
Most of my friends who are realtors are lucky to sell a property every few months . Now with the new scenario it will be much more difficult . Prices in Buenos Aires in US dollars for being a cash market have been high now for a long time . There is no justification for these prices as there is a tremendous amount of offer for sale and low demand . Rental returns are at historic lows and in many cases people are losing money holding a property in Buenos Aires as costs to maintain are very high . Also now with the new capital gains tax of 15% it makes little sense to buy a property as the risk factor is high . For example if I brought a property in January 2018 for 100 thousand dollars or at that time 1 ,700.000 pesos and now resell it for the same amount US$ 100,000 this is currently 5,700,000 pesos Banco de la Nacio venta .

This means that a 15% tax must be paid on the false earning ( ganancia ) of 4 million pesos or 600 thousand pesos US$ 11,000 approximate . This is a most unfair law as it does not contemplate the sale and purchase of property in us dollars and takes the peso as its base . This means that the seller is paying for the devaluation of the peso even though he did his transaction in us dollars.

Imagine if the peso reaches 100 or more the tax will be brutal .

Please note this only applies for those who brought from 2018 .
Yes, Perry this is one thing I agree with you totally on. This is NOT time to buy. The old adage is true. Never try to catch a falling knife. Fortunately I sold many of my properties earlier this year and also last year and got really premium prices for them. I bought them mostly after the last crash so I didn't have any capital gains tax on them. I wouldn't buy now unless prices crashed like in 2002-2004. (And I don't believe they will). I still own a few properties in Buenos Aires I will just use for when I visit/retire and also renting out.

Buenos Aires is a really amazing city. And it always will be. No matter the economy. Venezuela...um is NOT.


Real estate is not for the faint of heart in Argentina. When we sold our farm at the end of 2016, part of the payment was another piece of real estate which was rented out to a commercial enterprise. Phenomenal location, great rental history, etc. The buyer of our farm said it was worth X. We talked to several real estate agents who told us it was worth less than X but still a worthwhile asset. Once it became ours, all the headaches began. Tenant issues. Slow to pay their monthly rent. The building had issues and monthly expenses skyrocketed, taxes, etc, etc, etc. We sold it in 2018 at a great deal less than what the "experts" assured us it was worth 18 months prior but we were just happy to be rid of it.

Never, never, never take a property as partial payment for one that you sell. I'd had that offered to me several times and I never accept. Just cold hard cash. I can't tell you how many headache stories I hear like Citygirl of people that take other properties as partial payment.
 

garryl

Registered
Under the current price level and new tax code, Argentina real estate has ZERO appeals to any investors.
 

lamarque

Active Member
Agree you shouldn't grab a knife when is falling, that does not mean that you could not find any opportunity, but i think you are mostly transforming this into a real-state discussion. Well i wouldn't buy a property at the moment, until prices adjust to the new reality (not sure if they will in any case).
 

Fiscal

Registered
Yes, Perry this is one thing I agree with you totally on. This is NOT time to buy. The old adage is true. Never try to catch a falling knife. Fortunately I sold many of my properties earlier this year and also last year and got really premium prices for them. I bought them mostly after the last crash so I didn't have any capital gains tax on them. I wouldn't buy now unless prices crashed like in 2002-2004. (And I don't believe they will). I still own a few properties in Buenos Aires I will just use for when I visit/retire and also renting out.

Buenos Aires is a really amazing city. And it always will be. No matter the economy. Venezuela...um is NOT.





Never, never, never take a property as partial payment for one that you sell. I'd had that offered to me several times and I never accept. Just cold hard cash. I can't tell you how many headache stories I hear like Citygirl of people that take other properties as partial payment.

Why don't you think prices will crash again?
 
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