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“Omnibus” law: Javier Milei wants to eliminate a tax for those who sell a property purchased before 2018 - La Nacion Propiedades
December 27, 2023
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Ley “ómnibus”: Javier Milei quiere eliminar un impuesto para quienes vendan una propiedad comprada antes del 2018
A pesar de repetir que “no hay plata”, el Presidente Milei presentó una ley “ómnibus” que pretende eliminar un impuesto que es de los que más recaudación genera
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Despite repeating that “there is no money,” President Milei presented an “omnibus” law that aims to eliminate a tax that generates the most revenue.
By Mercedes Soriano
Javier Milei wants to eliminate a tax for those who want to sell a property they bought before 2018
President Javier Milei sent to Congress an ambitious “omnibus” bill that, among its 664 articles, proposes alleviating the tax burden on the sale of real estate. In detail, it proposes to repeal the Tax on the Transfer of Real Estate of Individuals and Undivided Estates (ITI), which is charged to owners who sell a property that was purchased before December 31, 2017 and that is not a home. unique and permanent.
“This repeal surprises me because it is one of the most representative funds in the collection. We are supposed to be at a time when, on the one hand, they want to make strong structural reforms and, on the other, the phrase 'there is no money' is repeated," says Julián González Mantelli, city notary and legal-notary advisor. -tax.
The ITI tax, which has been in force since 1991 under law 23,905, is 1.5% of the value of the property. “For example, in a sale for US$200,000, the seller's tax is US$3,000, which at the value of the official dollar ($827.25) would be $2,481,750,” illustrates the notary and adds: “If someone makes that sale until If this law is approved, you have to pay more than $2 million for the ITI, but if you make the sale after the hypothetical approval of the project, you would save it.” This would result in a possible paralysis of property sales operations until the definition of this tax is known.
The tax that has been in force since 1991 under law 23905 is 1.5% of the value of the property
During the month of November, the College of Notaries of the City of Buenos Aires registered 4,068 purchase and sale operations, which added up to a total amount of $132,080 million. The collection for that month alone from these operations would have been $1,981.2 million with 1.5% of the ITI.
If this law is passed, the repeal would be “very positive for the taxpayer since it frees them from a heavy tax burden and is not replaced by another type of tax,” maintains the notary.
Who loses with the “omnibus” law
Although the tax would be eliminated, not all owners in the country would stop paying it for selling their property. This is because since 2018, the ITI coexists with another tax. The sanction of Law 27,430 in 2017 determined that properties that have been purchased from January 1, 2018 onwards would not pay the ITI when they were sold but would be subject to the Scheduled Income Tax, which taxes the difference between the purchase and sale.For example, if a person buys at US$100,000 and sells at US$120,000, the profit is US$20,000 and on that he has to pay 15% of scheduled profits, which would be US$3000 (at the value of the official dollar at $827.25 it would be $2,481 .750).
Since 2018, a second tax has been in force that replaces the ITI and that would not be reached by the "omnibus" law
But the “omnibus” law does not also repeal this last tax but only the ITI. The notary González Mantelli, then, describes with an example the possible scenario that the market could face if it is approved in Congress: “Assuming that a person bought a garage in the same building in 2015 and another garage in 2019 and today wants them. sell, for the one he acquired in 2015 he would stop paying 1.5% of the value for the ITI but for the one he bought in 2019 he would have to pay the Cedular Income Tax. As of the approval of this project, the 2015 garage would not pay ITI.
In short, if this measure is approved in Congress, those who sell a property purchased before 2018 (other than a single and permanent home) would stop paying the ITI, while those who sell one that they bought after the 1st January 2018 they would continue to pay the Cedular Income Tax.
Sources consulted by LA NACION affirm that the ITI collects much more than the schedular tax because the second is paid by very few taxpayers. This is because the tax is not collected at the time the deed is made, but rather the seller must resort to an accountant of his own free will one year after making the sale to render it, an obligation that very few comply with.
The keys to the tax that would be eliminated
1. What is the ITI?
The ITI is a tax on transfers of ownership of real estate located in the country. The tax rate is 1.5% of the value to be considered.
According to what the law says, “a transfer will be considered a sale, exchange, exchange, dation in payment, contribution to companies and any act of disposition, except expropriation, by which ownership is transmitted for consideration, even when such transfers are carried out by court order or due to civil competitions.”
The ITI is a tax on transfers of ownership of real estate located in the country.
2. Who must pay the ITI?
The people covered by the tax are those who purchased any type of property other than a single and permanent home before December 31, 2017.On the other hand, the following are exempt from paying this tax:
- Human persons who sell their only home to buy another. This replacement has to follow certain requirements, such as being done within a year and creating a certificate digitally.
- Members of foreign diplomatic and consular missions, their technical and administrative staff and their families, depending on the limitations established by the applicable international conventions.
- The members of the representations, agents and, where appropriate, their family members who act in international organizations of which the Nation is a part.
Whoever sells their sole and permanent home to buy another one is exempt from paying the ITI
4. On what price is the tax calculated?
The ITI is applied to the sale price of the property in question. However, the law clarifies that when the transfer of the property does not have a specific price, the market price at the time the ownership transfer is made is taken into consideration . “For example, if we exchange an apartment on Anchorena Street for another on Arenales Street, there is no money in exchange. But since it is an onerous transfer and there is no value, they must set a price or the market price is taken as a reference,” says the notary.Law No. 23,905 says that in the case of exchanges, the market price of the exchanged good or service of greatest value will be considered. If the market price is not known, the General Tax Directorate will establish the procedure to follow.
The ITI is applied to the sale price of the property
5. When the tax is collected
- When the respective sales ticket or equivalent document is signed, possession is granted.
- Granting of the transfer of ownership deed.
In acts of judicial sales by public auction, the transfer will be considered carried out at the moment the order approving the auction is signed.
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