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Money laundering and property: a complete guide to buying homes with tax benefits - Infobae
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www.infobae.com
September 07, 2024
The measure is already in place and has generated a flood of inquiries and account openings. The real estate sector considers it essential to revitalize the construction and sale of properties. How to join
By Jose Luis Cieri
For those seeking to declare and regularize undeclared funds when purchasing a property: it is key to understand the amounts and deadlines established. Up to USD 100,000 must be kept in a special asset regularization account until September 30, 2024.
In an attempt to give an additional boost to the real estate market, the Government regulated the new money laundering, allowing investment in construction, renovation, development projects and the purchase of housing in general. The measure generated an increase in enquiries and opening of accounts in banks, according to those in the sector.
Steps to take advantage of the opportunity to purchase homes through money laundering include opening a Special Account for Asset Regularization (CERA) where investors can deposit the funds to be laundered.
Once deposited, they can be used to purchase both projects in progress with less than 50% progress and already constructed properties, without incurring additional taxes on these transfers. It is crucial for buyers and developers to understand that not all investments are eligible: laundered funds cannot be used for the purchase of undeveloped land or for investments outside of real estate, such as stocks or bonds, unless they adhere to other specific exceptions to the laundering regime.
Below are the essential aspects for acquiring a property through this process:
-Define the purpose of the property : Determine whether it will be used for rent or as a habitual residence. In the latter case, an exemption from the Personal Property Tax and the Value Added Tax (VAT) is contemplated.
-Subsequent sale and implications for Income Tax : If the taxpayer sells the property in the future, a 15% tax will be applied to the sale. In addition, the cost of the property may be updated according to the Consumer Price Index (CPI) from the date of purchase to the date of sale, in accordance with the documentation supporting the transaction.
- Possibility of joining the REIBP : By joining the Special Regime for Payment of Personal Property Tax, the regularized cash can be included in the tax base of this tax with a rate of 2% for the fiscal periods 2024 to 2027. "Thus, the housing acquired with the regularized funds will be included in the payment of this tax," Litvin clarified.
If there is no extension, they could be withdrawn as of October 1, 2024. “However, these funds can also be used before the end of the stage by purchasing, for example, a property,” Domínguez clarified.
For example, if you want to buy a property worth USD 100,000, the steps to follow are as follows:
1) The person who whitens must open a CERA account in an Argentine bank. In general, banks take 24 business hours to open them when the procedure is carried out online.
2) Deposit the USD 100,000 into the CERA account.
3) Transfer the laundered funds from the CERA account to another account in your name. To do this, the Bank will ask you for a sworn statement indicating that you are transferring the funds for the purpose of carrying out an onerous transaction. This transaction consists of purchasing a property.
4) Pay the seller for the property with the funds until September 30. Although it is recommended that payment be made by bank transfer so that there is traceability, the rules do not prevent the withdrawal of money and payment in cash. Some banks allow a procedure to increase the amount of the transfers to make a large amount like these. “It is important to find out from the Bank the term of the accreditation since it may not be immediate and it is something that must be considered at the time of signing the deed,” Domínguez recommended.
5) The deed transferring ownership of the property is the element that proves that the onerous transaction was carried out. It could also be a purchase-sale agreement.
6) The seller receives the funds from the sale of the property and can use them without restrictions.
7) The buyer can dispose of the property he purchased without restrictions on keeping it for a certain period of time.
Litvin added: “If the choice falls on already built properties, the money from the buyer’s CERA can be transferred to the seller’s CERA, also tax-free. This approach seeks to encourage investment in the real estate sector, vital for economic recovery.”
When comparing the current money laundering scheme with previous alternatives, there are advantages such as tax exemption up to USD 100,000 and the possibility of investing in a variety of financial vehicles without incurring special taxes.
However, Litvin warned of the downside of the lack of a “ fiscal buffer , crucial for those who choose not to participate in the laundering.” On the associated risks, he mentioned that the purchase of off-the-shelf properties presents challenges, such as the possibility of cancellation of the project before 31/12/2025, which would require the funds to be returned to the CERA, with possible withholdings if they are withdrawn before the deadline.
The fund transfer process, which is carried out immediately once the saver provides the project registration code and the CBU of the recipient account, allows for a smooth financial transition towards the real estate purchase.
Currently between CABA and Greater Buenos Aires there are more than 80,000 homes for sale, of which more than 50% are suitable for money laundering.
If the development is cancelled before December 31, 2025, the funds must be returned to CERA, which could affect the investor's liquidity.
Damián Tabakman , president of the Chamber of Urban Developers (CEDU), highlighted that the money laundering process attracts new demand at zero cost for investments in constructions with less than 50% progress, although - he clarified - "the volume of transactions is still low, since investment decisions are usually postponed until close to the deadline."
The process of buying houses under construction through money laundering (more details can be found on the CEDU website) works like this:
Steps to buy in works
The purchase of a property under construction with regularized funds is permitted in real estate developments with a degree of progress of less than 50% until July 8, 2024
Tabakman stressed the importance of the initial deposit before the end of September. “We have seen an increase in account openings and intense banking activity, which makes us optimistic about the results of money laundering in the medium and long term,” he concluded.
The purchase of a property under construction with regularized funds is permitted in real estate developments with a degree of progress of less than 50% until July 8, 2024
Tabakman stressed the importance of the initial deposit before the end of September. “We have seen an increase in account openings and intense banking activity, which makes us optimistic about the results of money laundering in the medium and long term,” he concluded.
www.buysellba.com
Source:
Blanqueo y propiedades: guía completa para comprar viviendas con beneficios fiscales
La medida ya está en marcha y generó un aluvión de consultas y apertura de cuentas. El sector inmobiliario la considera esencial para revitalizar la construcción y venta de propiedades. Cómo adherir
www.infobae.com
September 07, 2024
The measure is already in place and has generated a flood of inquiries and account openings. The real estate sector considers it essential to revitalize the construction and sale of properties. How to join
By Jose Luis Cieri
For those seeking to declare and regularize undeclared funds when purchasing a property: it is key to understand the amounts and deadlines established. Up to USD 100,000 must be kept in a special asset regularization account until September 30, 2024.
In an attempt to give an additional boost to the real estate market, the Government regulated the new money laundering, allowing investment in construction, renovation, development projects and the purchase of housing in general. The measure generated an increase in enquiries and opening of accounts in banks, according to those in the sector.
Steps to take advantage of the opportunity to purchase homes through money laundering include opening a Special Account for Asset Regularization (CERA) where investors can deposit the funds to be laundered.
Once deposited, they can be used to purchase both projects in progress with less than 50% progress and already constructed properties, without incurring additional taxes on these transfers. It is crucial for buyers and developers to understand that not all investments are eligible: laundered funds cannot be used for the purchase of undeveloped land or for investments outside of real estate, such as stocks or bonds, unless they adhere to other specific exceptions to the laundering regime.
Details
“The current asset regularization regime allows, under certain conditions, the use of regularized funds for the purchase of homes. There are several issues to take into account regarding the fiscal and legal implications of the money laundering regime in Argentina ,” César Litvin , tax expert at the Lisicki, Litvin & Asociados firm, told Infobae .Below are the essential aspects for acquiring a property through this process:
-Define the purpose of the property : Determine whether it will be used for rent or as a habitual residence. In the latter case, an exemption from the Personal Property Tax and the Value Added Tax (VAT) is contemplated.
-Subsequent sale and implications for Income Tax : If the taxpayer sells the property in the future, a 15% tax will be applied to the sale. In addition, the cost of the property may be updated according to the Consumer Price Index (CPI) from the date of purchase to the date of sale, in accordance with the documentation supporting the transaction.
- Possibility of joining the REIBP : By joining the Special Regime for Payment of Personal Property Tax, the regularized cash can be included in the tax base of this tax with a rate of 2% for the fiscal periods 2024 to 2027. "Thus, the housing acquired with the regularized funds will be included in the payment of this tax," Litvin clarified.
How to buy with USD 100,000 laundered
Sebastián Domínguez , CEO of SDC Tax Advisors, explained that during September “the laundering of up to USD 100,000 is free of charge and the funds can be withdrawn after the completion of the first stage of the laundering.”If there is no extension, they could be withdrawn as of October 1, 2024. “However, these funds can also be used before the end of the stage by purchasing, for example, a property,” Domínguez clarified.
For example, if you want to buy a property worth USD 100,000, the steps to follow are as follows:
1) The person who whitens must open a CERA account in an Argentine bank. In general, banks take 24 business hours to open them when the procedure is carried out online.
2) Deposit the USD 100,000 into the CERA account.
3) Transfer the laundered funds from the CERA account to another account in your name. To do this, the Bank will ask you for a sworn statement indicating that you are transferring the funds for the purpose of carrying out an onerous transaction. This transaction consists of purchasing a property.
4) Pay the seller for the property with the funds until September 30. Although it is recommended that payment be made by bank transfer so that there is traceability, the rules do not prevent the withdrawal of money and payment in cash. Some banks allow a procedure to increase the amount of the transfers to make a large amount like these. “It is important to find out from the Bank the term of the accreditation since it may not be immediate and it is something that must be considered at the time of signing the deed,” Domínguez recommended.
5) The deed transferring ownership of the property is the element that proves that the onerous transaction was carried out. It could also be a purchase-sale agreement.
6) The seller receives the funds from the sale of the property and can use them without restrictions.
7) The buyer can dispose of the property he purchased without restrictions on keeping it for a certain period of time.
Legal and tax aspects
According to Litvin, those who regularize up to USD 100,000 can deposit these funds in a CERA until September 30, 2024 without incurring tax costs. “If they choose to acquire properties before this date, they must present appropriate documentation, such as the sales contract, to validate the transaction,” he clarified.Litvin added: “If the choice falls on already built properties, the money from the buyer’s CERA can be transferred to the seller’s CERA, also tax-free. This approach seeks to encourage investment in the real estate sector, vital for economic recovery.”
When comparing the current money laundering scheme with previous alternatives, there are advantages such as tax exemption up to USD 100,000 and the possibility of investing in a variety of financial vehicles without incurring special taxes.
However, Litvin warned of the downside of the lack of a “ fiscal buffer , crucial for those who choose not to participate in the laundering.” On the associated risks, he mentioned that the purchase of off-the-shelf properties presents challenges, such as the possibility of cancellation of the project before 31/12/2025, which would require the funds to be returned to the CERA, with possible withholdings if they are withdrawn before the deadline.
The fund transfer process, which is carried out immediately once the saver provides the project registration code and the CBU of the recipient account, allows for a smooth financial transition towards the real estate purchase.
Developments
In the process of acquiring a property through money laundering, the projects must be duly registered and verifiable .
Currently between CABA and Greater Buenos Aires there are more than 80,000 homes for sale, of which more than 50% are suitable for money laundering.
If the development is cancelled before December 31, 2025, the funds must be returned to CERA, which could affect the investor's liquidity.
Damián Tabakman , president of the Chamber of Urban Developers (CEDU), highlighted that the money laundering process attracts new demand at zero cost for investments in constructions with less than 50% progress, although - he clarified - "the volume of transactions is still low, since investment decisions are usually postponed until close to the deadline."
The process of buying houses under construction through money laundering (more details can be found on the CEDU website) works like this:
- Tax Residence : They must be Argentine tax residents as of 12-31-2023, even if they are not registered as taxpayers.
- Re-acquisition of Residency : Those who were Argentine tax residents before 12-31-2023, reacquire Argentine tax residency as of 1-1-2024.
- Income Tax : They will begin paying income tax on their income in the country and abroad from 1-1-2024, and will be able to retire again from 1-1-2025.
- Exclusions : Those who have been public officials in the last ten years, their immediate family members, as well as companies in which these subjects have a majority stake and/or control are excluded from money laundering.
Steps to buy in works
- Account Opening : Open a special account at the bank to deposit the money to be laundered.
The purchase of a property under construction with regularized funds is permitted in real estate developments with a degree of progress of less than 50% until July 8, 2024
- Signing the Ticket : Sign the purchase ticket with the developer who has a project “suitable for money laundering”.
- Fund Transfer : Transfer money from the special account to the developer's account.
- Project Certification : For the project to be “suitable for money laundering”, the developer must register it as such with the AFIP, based on a report from a registered architect stating that the work is less than 50% complete.
Tabakman stressed the importance of the initial deposit before the end of September. “We have seen an increase in account openings and intense banking activity, which makes us optimistic about the results of money laundering in the medium and long term,” he concluded.
The purchase of a property under construction with regularized funds is permitted in real estate developments with a degree of progress of less than 50% until July 8, 2024
- Signing the Ticket : Sign the purchase ticket with the developer who has a project “suitable for money laundering”.
- Fund Transfer : Transfer money from the special account to the developer's account.
- Project Certification : For the project to be “suitable for money laundering”, the developer must register it as such with the AFIP, based on a report from a registered architect stating that the work is less than 50% complete.
Tabakman stressed the importance of the initial deposit before the end of September. “We have seen an increase in account openings and intense banking activity, which makes us optimistic about the results of money laundering in the medium and long term,” he concluded.
www.buysellba.com
