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Bases Law: how much will the cost of a real estate transaction be reduced with the new tax scheme - Infobae
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www.infobae.com
July 12, 2024
The elimination of the Real Estate Transfer Tax (ITI) after the entry into force of the Basic Law applies to acquisitions made before 1/1/2018. There will be no retroactivity of the tax on natural persons.
By Jose Luis Cieri
The repeal of the ITI benefits both buyers and the real estate market in general (Illustrative Image Infobae)
With the promulgation of the Law of Bases and the fiscal package , the Tax on the Transfer of Real Estate (ITI) , which imposed a 1.5% tax on the transfer of properties, was eliminated. The Law of Bases and Starting Points for the Freedom of Argentines, together with the package of fiscal measures published in the Official Gazette by President Javier Milei , declares a public emergency in administrative, economic, financial and energy matters for one year.
The elimination of the ITI for individuals, undivided estates and those who carry out real estate transactions individually applies to acquisitions made before 1/1/2018. Properties acquired before that date will not be subject to any tax at the time of sale.
The ITI was established in Argentina on February 25, 1991 by a resolution of the AFIP. The repeal of this tax is total, which also eliminates the mandatory consultation with the AFIP for residents abroad. This consultation, which had to be carried out before signing any deed of sale, was a cumbersome procedure with unpredictable delays that sometimes caused operations to fail.
It is important to note that there is no retroactivity of the personal income tax for individuals, as provided for by the reform at the end of 2017.
The elimination of the ITI does not mean that all property owners in the country will stop paying a tax for selling their property. Since 2018, the ITI has coexisted with the Tax on Income Taxes, which taxes the difference between the purchase and sale, less the cost updated by the Consumer Price Index (CPI) and expenses. For example, if a home was purchased for USD 80,000 and sold for USD 100,000, the taxpayer must pay 15% of the difference of USD 20,000, that is, USD 3,000, with the index adjustments and expenses included.
The Basic Law does not repeal this last tax, but only the ITI. For example, if a person bought a garage in the same building in 2015 and another in 2019 and today wants to sell both, for the garage acquired in 2015 he would stop paying 1.5% of the value for the ITI, but for the one bought in 2019 he would have to pay the Income Tax.
The elimination of the ITI has several favorable aspects: it reduces costs for buyers by eliminating the 1.5% of the property value in the transfer and encourages real estate investment by eliminating an additional cost.
In the short term, the elimination of the ITI has a favorable impact on the seller, reducing the costs of the sale, provided that it is not a home replacement.
In a real estate purchase-sale transaction, buyers and sellers must pay the Stamp Tax, a local tax (Illustrative image Infobae)
Francisco Altgelt , from Altgelt Negocios Inmobiliarios, pointed out that “owners who want to sell a property that is not their sole and permanent home will not pay the 1.5% ITI on the sale. This is beneficial for all operations at a national level, since it is a federal tax.”
“In a real estate purchase-sale transaction, the taxes and costs to be paid by buyers and sellers include the stamp duty (if applicable), title study, notary fees, fees of the real estate professional and the notary involved, and the Income Tax. These taxes are still in force and must be considered in the transactions,” said Migliorisi.
In CABA, it is taxed at 3.5% of the amount in pesos that appears in the deed. After the elimination of the ITI, it remains in force and must be considered in transactions.
Recently, private and real estate developers asked the Government to include in the Money Laundering the possibility of buying unfinished and used properties . The Minister of Economy, Luis Caputo , announced that he will take this into account for the implementation of the new clearing of funds.
Altgelt concluded that, “in addition to the elimination of the ITI, money laundering is another significant measure in the context of the recently enacted fiscal package. During the Mauricio Macri government’s money laundering , there was greater movement in the real estate market, as hundreds of buyers were able to justify their income for the purchase of properties.”
www.buyellba.com
Source:
Ley Bases: cuánto se reducirá el costo de una operación inmobiliaria con el nuevo esquema impositivo
La supresión del Impuesto a la Transferencia de Inmuebles (ITI) tras la entrada en vigencia de la Ley de Bases rige para las adquisiciones efectuadas antes del 1/1/2018. No habrá retroactividad del impuesto cedular para las personas humanas
www.infobae.com
July 12, 2024
The elimination of the Real Estate Transfer Tax (ITI) after the entry into force of the Basic Law applies to acquisitions made before 1/1/2018. There will be no retroactivity of the tax on natural persons.
By Jose Luis Cieri
The repeal of the ITI benefits both buyers and the real estate market in general (Illustrative Image Infobae)
With the promulgation of the Law of Bases and the fiscal package , the Tax on the Transfer of Real Estate (ITI) , which imposed a 1.5% tax on the transfer of properties, was eliminated. The Law of Bases and Starting Points for the Freedom of Argentines, together with the package of fiscal measures published in the Official Gazette by President Javier Milei , declares a public emergency in administrative, economic, financial and energy matters for one year.
The elimination of the ITI for individuals, undivided estates and those who carry out real estate transactions individually applies to acquisitions made before 1/1/2018. Properties acquired before that date will not be subject to any tax at the time of sale.
The ITI was established in Argentina on February 25, 1991 by a resolution of the AFIP. The repeal of this tax is total, which also eliminates the mandatory consultation with the AFIP for residents abroad. This consultation, which had to be carried out before signing any deed of sale, was a cumbersome procedure with unpredictable delays that sometimes caused operations to fail.
It is important to note that there is no retroactivity of the personal income tax for individuals, as provided for by the reform at the end of 2017.
The elimination of the ITI does not mean that all property owners in the country will stop paying a tax for selling their property. Since 2018, the ITI has coexisted with the Tax on Income Taxes, which taxes the difference between the purchase and sale, less the cost updated by the Consumer Price Index (CPI) and expenses. For example, if a home was purchased for USD 80,000 and sold for USD 100,000, the taxpayer must pay 15% of the difference of USD 20,000, that is, USD 3,000, with the index adjustments and expenses included.
The Basic Law does not repeal this last tax, but only the ITI. For example, if a person bought a garage in the same building in 2015 and another in 2019 and today wants to sell both, for the garage acquired in 2015 he would stop paying 1.5% of the value for the ITI, but for the one bought in 2019 he would have to pay the Income Tax.
Positive implications
The repeal of the ITI in Argentina was a significant step towards alleviating the tax burden on the sale of properties. Román Andrés Paikin , from San Román Propiedades, told Infobae that “this tax, which levied a 1.5% tax on the transfer of properties acquired before December 2017 and not used as permanent housing, ceased to apply, benefiting both buyers and the real estate market in general.”The elimination of the ITI has several favorable aspects: it reduces costs for buyers by eliminating the 1.5% of the property value in the transfer and encourages real estate investment by eliminating an additional cost.
In the short term, the elimination of the ITI has a favorable impact on the seller, reducing the costs of the sale, provided that it is not a home replacement.
In a real estate purchase-sale transaction, buyers and sellers must pay the Stamp Tax, a local tax (Illustrative image Infobae)
Francisco Altgelt , from Altgelt Negocios Inmobiliarios, pointed out that “owners who want to sell a property that is not their sole and permanent home will not pay the 1.5% ITI on the sale. This is beneficial for all operations at a national level, since it is a federal tax.”
For foreigners
Another important aspect regarding the repeal of the ITI is that it also eliminates the obligation to carry out the procedure that residents abroad had to do to sell a property. “Residents abroad had to carry out a procedure at the AFIP for the retention of the ITI, where the payment of taxes was verified, a substitute responsible person was required and a lot of documentation had to be presented. This took months to complete and hindered operations,” concluded Paikin.“In a real estate purchase-sale transaction, the taxes and costs to be paid by buyers and sellers include the stamp duty (if applicable), title study, notary fees, fees of the real estate professional and the notary involved, and the Income Tax. These taxes are still in force and must be considered in the transactions,” said Migliorisi.
Which is paid in a transaction and laundering
In a real estate purchase-sale transaction, the taxes and costs to be paid by buyers and sellers include the Stamp Tax, which is a local tax.In CABA, it is taxed at 3.5% of the amount in pesos that appears in the deed. After the elimination of the ITI, it remains in force and must be considered in transactions.
Recently, private and real estate developers asked the Government to include in the Money Laundering the possibility of buying unfinished and used properties . The Minister of Economy, Luis Caputo , announced that he will take this into account for the implementation of the new clearing of funds.
Altgelt concluded that, “in addition to the elimination of the ITI, money laundering is another significant measure in the context of the recently enacted fiscal package. During the Mauricio Macri government’s money laundering , there was greater movement in the real estate market, as hundreds of buyers were able to justify their income for the purchase of properties.”
www.buyellba.com
