Real Estate Sales Do I need a Real Estate Agent or just an Escribano?

[MDirtBoy]

If I'm selling property here do I need to have an inmobilaria in the mix or can I just get my own escribano and do the deal between two parties?

Relatedly, if those two parties happen to have accounts outside of Argentina can they do the money swap between their respective accounts and never have to cross the Central Bank line? Is there a difference if they are Permanent Residents, etc?

Many thanks in advance!

 

[SamBarto]

You dont need an agent, but if your property is selling for more than 600,000 pesos you will need a COTI.

You can do this yourself online if you have a Clave Fiscal.

It takes about 10 minutes once you have all the relevant information.

 

[TioLuchi]

Agreed, you don´t need an agent.

The buyer chooses the Escribano and pays the Escribano fee.

Unless you have an extremely accommodating (and appropriately remunerated) Escribano then the money will have to come into the country. Even if you find an Escribano who will accomodate, then the buyer will have a problem when they later come to sell: unless they can find another similar (no money enters Argentina) buyer then they will be unable to get their money out without showing how it came in.

Treading the fine line between economic necessity and the law would lead most locals to suggest that a part enters in blanco and that the balance never touches Argentina. The blanco part would need to be coherent with the COTI. Even in this scenario the buyer will/may encounter a (gains tax) problem when he later sells unless his buyer is also willing to do an equivalent part under the table or offshore.

Todo complicado!

 

[TechNow]

You don't want an agent. If you already have a deal in place, then you just need an escribano.

I also recommend you find an escribano and pay a little extra for them to say the funds were paid in Argentina and then do the transaction outside of Argentina. This will save everyone a bunch of headaches.

If you already have the buyer and seller lined up, you can also do the COTI for whatever amount they agree upon because the property won't be advertised in the newspaper (that's what the COTI is for).

 

[MDirtBoy]

Ok, so...

If:
1. Both the buyer and seller are outside of Argentina and a deal is in place
2. The deal is for more than $600,000AR (see #1 need below)

Then they need:
1. A COTI for the deal
2. An escribano to say that the funds transferred hands here in Argentina

And if:
1. None, or a portion, of the funds never crosses the Central Bank line

Then:
1. The buyer will need to do the same deal when they sell or have problems with AFIP with any capital gains taxes.

Am I correct?

Is there any advantage to being a Permanent Resident in Argentina?

 

[CremaIce]

If I'm selling property here do I need to have an inmobilaria in the mix or can I just get my own escribano and do the deal between two parties?

Relatedly, if those two parties happen to have accounts outside of Argentina can they do the money swap between their respective accounts and never have to cross the Central Bank line? Is there a difference if they are Permanent Residents, etc?

Many thanks in advance!

No inmobilaria needed, just make sure you trust the Escribano whoever you use

I sold my property just over a year ago (I'm a permanent resident) and had the money transferred from the buyers USA account to my UK account, it wasn't a problem because it was documented in the Escritura that the transaction was done that way... I have since brought the money back into Argentina via the legal channels and purchased another property here without any problems..

"En el momento de celebrar la escritura de venta a mi favor, mediante tranferencia electronica de la cuenta de mi titularidad numero #### del banco #### surcusal ####, dirección en la EEUU a la cuenta indicada por el vendedor indentficada como IBAN #### SWIFT #### cuenta coriente
numero #### sort code #### de titularidad del vendedor del banco #### en la ciudad de ##### en Inglaterra .... " - just make sure the transfer is for the exact amount shown on the escritura and copies of bank documentation will be need to prove this

The biggest issue is does the seller send the money before or after you sign the escritura as the money transfer won't be instantaneous.... one party is going to have to trust the other party or have some extra written contract to make sure it goes smoothly and nobody get screwed...

 

[TechNow]

No inmobilaria needed, just make sure you trust the Escribano whoever you use

I sold my property just over a year ago (I'm a permanent resident) and had the money transferred from the buyers USA account to my UK account, it wasn't a problem because it was documented in the Escritura that the transaction was done that way... I have since brought the money back into Argentina via the legal channels and purchased another property here without any problems..

"En el momento de celebrar la escritura de venta a mi favor, mediante tranferencia electronica de la cuenta de mi titularidad numero #### del banco #### surcusal ####, dirección en la EEUU a la cuenta indicada por el vendedor indentficada como IBAN #### SWIFT #### cuenta coriente
numero #### sort code #### de titularidad del vendedor del banco #### en la ciudad de ##### en Inglaterra .... " - just make sure the transfer is for the exact amount shown on the escritura and copies of bank documentation will be need to prove this

The biggest issue is does the seller send the money before or after you sign the escritura as the money transfer won't be instantaneous.... one party is going to have to trust the other party or have some extra written contract to make sure it goes smoothly and nobody get screwed...

The language you indicate here is no longer permitted in escrituras. The money now has to be brought into Argentina. This change was made about 6 months ago I believe. Google it.

And yes this is ALMOST the biggest issue. My suggestion is (assuming Dirtboy is the middleman here, trusted by both parties, and arranging the escritura for two foreigners) is to have the seller and buyer sign the escritura, but have the escribano keep all copies of the document. If the money transfer is not made, the escribano destroys the documents. If the transfer is made, the escribano goes forward with the escritura.

The biggest issue is going to be finding an escribano who is willing to do the operation. This will be hard. And they won't charge the typical 1%. You're probably looking at 3-5% for an escribano to agree to all this. It is still going to be cheaper than bringing the funds into Argentina though because they will get pesified at a horrible rate.

Also note: When the buyer decides to sell one day, it would be a good idea for him to be a permanent resident. AFIP may ask the buyer to prove the origin of the funds when he sells the apartment and if he has nothing to show it may be a problem.

 

[earlyretirement]

The language you indicate here is no longer permitted in escrituras. The money now has to be brought into Argentina. This change was made about 6 months ago I believe. Google it.

And yes this is ALMOST the biggest issue. My suggestion is (assuming Dirtboy is the middleman here, trusted by both parties, and arranging the escritura for two foreigners) is to have the seller and buyer sign the escritura, but have the escribano keep all copies of the document. If the money transfer is not made, the escribano destroys the documents. If the transfer is made, the escribano goes forward with the escritura.

The biggest issue is going to be finding an escribano who is willing to do the operation. This will be hard. And they won't charge the typical 1%. You're probably looking at 3-5% for an escribano to agree to all this. It is still going to be cheaper than bringing the funds into Argentina though because they will get pesified at a horrible rate.

Also note: When the buyer decides to sell one day, it would be a good idea for him to be a permanent resident. AFIP may ask the buyer to prove the origin of the funds when he sells the apartment and if he has nothing to show it may be a problem.

Not exactly true. While some Escribanos won't want to do it as there is a lot of confusion about it.....it's still being done. The last transaction I did a few weeks ago...the Escribano for the buyer told me they weren't sure if it was allowed. So I consulted the Colegio de Escribanos and they said they weren't sure and to consult the Central Bank. No one really knows what is going on so it was allowed by the buyer's Escribano then you can still do it.

Although the Argentina government IS trying to definitely close this loophole. But I did this method as recent as a few weeks ago. All went smoothly.

 

[earlyretirement]

Just keep in mind for what I wrote above that the buyer definitely has to have those assets/funds declared if you want to write it on the title deed.

For example, the buyer above was a Porteño but he had his funds offshore. Fortunately he was the odd/rare type that did declare all his assets offshore out of Argentina so he agreed to doing it this way.

But I have a friend that also closed a few weeks ago. Although she got paid abroad in the UK, they just put in the title deed the buyer (also a Porteño) paid the funds in cash.

But as I mentioned in another post..the real problem going on or that will become a big problem is AFIP's starting to question where the funds were coming from and seeing how much the buyers have paid in the past decade in income tax and also how much they declared they made. That's the biggest problem for the real estate market heading into the future since so many locals don't declare all of their income/assets.

 

[MDirtBoy]

Just keep in mind for what I wrote above that the buyer definitely has to have those assets/funds declared if you want to write it on the title deed.

For example, the buyer above was a Porteño but he had his funds offshore. Fortunately he was the odd/rare type that did declare all his assets offshore out of Argentina so he agreed to doing it this way.

But I have a friend that also closed a few weeks ago. Although she got paid abroad in the UK, they just put in the title deed the buyer (also a Porteño) paid the funds in cash.

But as I mentioned in another post..the real problem going on or that will become a big problem is AFIP's starting to question where the funds were coming from and seeing how much the buyers have paid in the past decade in income tax and also how much they declared they made. That's the biggest problem for the real estate market heading into the future since so many locals don't declare all of their income/assets.

Ok, to be clear ... a foreign buyer will need to provide tax info to AFIP or is this only for Argentines?

 

[TechNow]

A foreign buyer of real estate needs to get a CDI number and once per year needs to pay "bienes personales".

When he sells the apartment he will also need to prove what it was used for.

 

[earlyretirement]

Ok, to be clear ... a foreign buyer will need to provide tax info to AFIP or is this only for Argentines?

No, foreign non-residents don't need to show any tax information from their home country to AFIP. However, when I bought a few of my properties and I was bringing in the funds in white, one of the money transfer firms asked to see copies of my USA tax returns along with some other things. Just so they were in compliance with anti-terrorist and anti-money laundering laws in Argentina.

But to my knowledge, AFIP never saw this.

 

[TechNow]

No, foreign non-residents don't need to show any tax information from their home country to AFIP. However, when I bought a few of my properties and I was bringing in the funds in white, one of the money transfer firms asked to see copies of my USA tax returns along with some other things. Just so they were in compliance with anti-terrorist and anti-money laundering laws in Argentina.

But to my knowledge, AFIP never saw this.

I believe the escribanos are required now to ask you about the origin of the funds when you buy the property. I remember filling this out when I bought my last property. You have to say where you got the money from. I was not required to provide proof, however. That may have changed. It seems like the rules for the property market change every 6 months or so. It is hard to keep up with all the new rules.

 

[earlyretirement]

I believe the escribanos are required now to ask you about the origin of the funds when you buy the property. I remember filling this out when I bought my last property. You have to say where you got the money from. I was not required to provide proof, however. That may have changed. It seems like the rules for the property market change every 6 months or so. It is hard to keep up with all the new rules.

Yes, that's right el expatriado. They do ask about the origin of funds. Some white money exchange firms are more strict than others when it comes to what all you have to show. I have several friends that also purchased, and they too had to show tax returns from their home country in order to open an account as well as C.V. and some other details.

Honestly, the right hand doesn't know what the left hand is doing and the laws are always changing. No one really knows what the laws really are anymore. Even the Colegio de Escribanos! It's not no one wants to give any definitive answers. And forget about AFIP as there are many different offices and when you ask 3 different offices answers, you can get 3 different answers.

My own Escribano told me that it wasn't possible to get paid abroad anymore (as of a few months ago). But when I actually went to inquire with the various entities, no one really knew so I guess it all boils down to the Escribano conducting the transaction (selected by the buyer).

As mentioned, as of a few weeks ago...it was still possible to get paid abroad. On the Escritura it even has the bank account # of where the funds were going. But I suspect Argentina will quickly close that loop hole as well.

But many locals have accounts overseas in Uruguay, USA, and Europe. So in many transactions, you're still seeing on the Escritura it says the buyer paid in cash yet the funds were wired abroad.

 

[TechNow]

Yes, that's right el expatriado. They do ask about the origin of funds. Some white money exchange firms are more strict than others when it comes to what all you have to show. I have several friends that also purchased, and they too had to show tax returns from their home country in order to open an account as well as C.V. and some other details.

Honestly, the right hand doesn't know what the left hand is doing and the laws are always changing. No one really knows what the laws really are anymore. Even the Colegio de Escribanos! It's not no one wants to give any definitive answers. And forget about AFIP as there are many different offices and when you ask 3 different offices answers, you can get 3 different answers.

My own Escribano told me that it wasn't possible to get paid abroad anymore (as of a few months ago). But when I actually went to inquire with the various entities, no one really knew so I guess it all boils down to the Escribano conducting the transaction (selected by the buyer).

As mentioned, as of a few weeks ago...it was still possible to get paid abroad. On the Escritura it even has the bank account # of where the funds were going. But I suspect Argentina will quickly close that loop hole as well.

But many locals have accounts overseas in Uruguay, USA, and Europe. So in many transactions, you're still seeing on the Escritura it says the buyer paid in cash yet the funds were wired abroad.

Would you be so kind as to send me a PM of the escribano who was able to do that transaction? I'd very much like to know. I'm sure dirtboy would like to know also.

 

[earlyretirement]

Would you be so kind as to send me a PM of the escribano who was able to do that transaction? I'd very much like to know. I'm sure dirtboy would like to know also.

Let me email him first to see if he wants it known that he is doing this.... I don't have permission to release his name so I'll ask him first...if he doesn't object, I'll send you a PM.

But he might not want the attention. In the deal I'm talking about his client was a high profile CEO in Buenos Aires.

 

[SamBarto]

Any non residents selling property may find this useful

http://buenosairesstay.com/buenos-a.../non-residents-selling-property-in-argentina/

 

[TechNow]

Any non residents selling property may find this useful

http://buenosairesstay.com/buenos-a.../non-residents-selling-property-in-argentina/

Selling property as a non-resident is a nightmare. Anyone who is thinking of owning property in Argentina should try and get a DNI so they can avoid this process when they go to sell. Ideally they should have the DNI when they buy.

When my father (a non-resident) sold his property here we were able to avoid all the taxes by justifying to the AFIP that I was living in the apartment. But otherwise he would have had to pay a crazy amount of taxes... like 30% or so of the selling price of the apartment.

 

[earlyretirement]

Absolutely selling an apartment as a non-resident can be a nightmare as some mentioned. It makes a HUGE difference when you have a DNI. AFIP has become a nightmare with this non-resident permit!

It helps when you follow all the laws and pay all taxes. Rental taxes (21% of all rentals plus all asset and ABL taxes). If you do, the process isn't as complicated but even when you follow ALL laws and pay ALL taxes, AFIP can still screw you.

I have a friend that sold his property a few months ago and he paid 100% of ALL rental taxes. He rented it out short-term and the company forced him to pay all taxes for the years he owned his property. He paid every ABL tax on time, he paid every asset bill on time.

He was a non-resident so he had to hire an accountant to sell. Get this.. AFIP still screwed him as they said he didn't pay the 21% tax for a few months while he owned it. (He owned it 3 years).

He had several friends that he allowed to use his property periodically. He never charged anything to his friends when they used his property. AFIP simply said he paid rental taxes for all the other months so he should be paying taxes on the months he didn't declare (how is that logic for you!).

It's no wonder that people don't pay their fair share of all taxes in Argentina when you see things like this. He wasn't granted the permit without paying thousands of pesos in "taxes" that he never had income on.

Keep in mind you can NOT sell as a foreigner without this permit.... so you have to pay it or they won't grant it. And I heard it's getting worse at AFIP so keep this in mind and have a very good accountant when you have to get the permit.

On the other end of the spectrum....I know an American in Asia and he owned a property in San Telmo for over 10 years. He never paid any rental taxes on it and he didn't pay any asset taxes either as he never knew there was one. He was going to have to pay a fortune to get the permit. He had an old DNI from many years ago when he lived and worked in Buenos Aires. He got permanent residency but hadn't lived in Argentina for over 6 years. Long story short...he got out of paying ALL taxes and didn't have to get a permit...all because he had a DNI.

System is totally screwed in Argentina.

 

[earlyretirement]

Also, it's not so much the taxes where AFIP gets you. It's the penalties and interest for the most part. The only legal taxes you have as the seller in Buenos Aires when you sell is typically splitting the stamp tax of 2.5% which is 1.25% each for the buyer and seller and then the 1.5% transfer tax.

If you are up to date on all your rental taxes then those are the only two legitimate taxes.

If you aren't up to date on your annual asset taxes, the penalties and interest are totally crazy. Something like 30% a year.

The biggest problem I have is AFIP assuming you have been renting it out even if you weren't. They ask you for EVERY page of your passport so you can't say you were staying in it. They also ask you for copies of your utility bills and water bills, phone bills, etc. So they can see the consumption.