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New tax relief in CABA: how to avoid the 3.5% Stamp Duty and save on the purchase of your first home - Infobae
Source:
www.infobae.com
January 08, 2025
The reduction of this tax is now in force. Who benefits from it when purchasing a property and what does the real estate market sector think?
By Jose Luis Cieri
Tax benefits apply to first-time home buyers and buyers under certain criteria for permanent occupation (Illustrative Image Infobae)
A tax cut that will benefit sellers and buyers in real estate purchase and sale transactions has come into effect. From now on, a change in the Stamp Tax for these transactions in the city of Buenos Aires is in effect .
According to laws 6,805 and 6,806, which modify the Buenos Aires Tax Code and Tariff Law, the exempt amount for single-family and permanently occupied housing increases from $56,270,730 to $205,332,000 (approximately USD 170,000 at the free dollar exchange rate ).
This change will allow buyers to avoid paying 3.5% on the value of the property, provided they meet the exemption requirements, which will reduce transaction costs.
According to the Buenos Aires Official Gazette, this modification can represent a saving of up to USD 5,950 on properties that meet the conditions : “As an example: a property sold for USD 170,000 will no longer pay the 3.5% tax, which would be USD 5,950.” This scheme seeks to balance the tax burdens amidst the high costs involved in these operations.”
De Bártolo explained that among the key benefits is the reduction of the high transactional cost of notary fees, real estate payments and state taxes.
Furthermore, the update of the tax base "will facilitate access to owning a home and will stimulate the middle-high segment of the market ," he stressed. In this context, those who acquired properties intended for exclusive, family and permanent use were especially favored.
Alejandro Moretti , a member of the Board of Directors of the Buenos Aires Real Estate Association, said that the greatest beneficiaries will be "those who buy their first home or those who, after selling their only property, decide to buy another and maintain the criteria of this benefit."
Notaries will be responsible for verifying compliance with the conditions for accessing the exemption (Illustrative Image Infobae)
However, he warned that properties above the established figure or those who own other property in CABA will continue to pay 3.5% in operations.
It should be noted that the increase in the exempt threshold responds to the increase in the value of the real estate market measured in dollars .
“The adjustment to the tax base had been requested repeatedly. We were pleasantly surprised that it was implemented. We regret that the base rate of 3.5%, one of the highest rates in the country compared to the 2% applicable in the Province of Buenos Aires, was not reduced,” said De Bártolo.
As explained by the real estate sector, transactions that do not exceed $205,332,000 will be exempt from the tax, while the rest will continue to divide the 3.5% between buyer and seller. For example, a deed valued at $300,000,000 will imply that each party pays 1.75%, that is, $5,250,000 or its equivalent in dollars.
An inevitable side effect will be a temporary reduction in tax revenues from the real estate sector.
However, Moretti is confident that this will be offset by the dynamism that it will generate in the sector: “Whenever a tax is eliminated or reduced, it generates more investment, and in the long run it generates more revenue.”
Construction and real estate are major drivers of local investment.
Moretti suggested in statements to the digital media that “the new tax base should be adjusted by exchange rate, since real estate transactions are typically agreed in dollars.”
He also described the potential operational challenges: “The change will help make the act of signing the deed more agile and simple, although compliance with the requirements will have to be rigorously confirmed . ”
This highlights the importance of buyers consulting with their notaries before signing the deeds, the sector reported.
In addition, mortgage loans , money laundering and investment in real estate played a central role in the recovery of a segment that suffered more than five long years of crisis.
"The measure will allow for a reduction in the tax burden on home ownership in a context of inflationary adjustments. Beyond the challenges, it offers an incentive for first-time home buyers and promises to boost an activity that is necessary for the local economy," concluded Moretti.
www.buysellba.com
Source:
Nuevo alivio fiscal en CABA: cómo evitar el 3,5% del Impuesto de Sellos y ahorrar en la compra de la primera vivienda
Ya rige la reducción de este gravamen. A quiénes beneficia en la compra de un inmueble y qué opina el sector mercado inmobiliario
www.infobae.com
January 08, 2025
The reduction of this tax is now in force. Who benefits from it when purchasing a property and what does the real estate market sector think?
By Jose Luis Cieri
Tax benefits apply to first-time home buyers and buyers under certain criteria for permanent occupation (Illustrative Image Infobae)
A tax cut that will benefit sellers and buyers in real estate purchase and sale transactions has come into effect. From now on, a change in the Stamp Tax for these transactions in the city of Buenos Aires is in effect .
According to laws 6,805 and 6,806, which modify the Buenos Aires Tax Code and Tariff Law, the exempt amount for single-family and permanently occupied housing increases from $56,270,730 to $205,332,000 (approximately USD 170,000 at the free dollar exchange rate ).
This change will allow buyers to avoid paying 3.5% on the value of the property, provided they meet the exemption requirements, which will reduce transaction costs.
According to the Buenos Aires Official Gazette, this modification can represent a saving of up to USD 5,950 on properties that meet the conditions : “As an example: a property sold for USD 170,000 will no longer pay the 3.5% tax, which would be USD 5,950.” This scheme seeks to balance the tax burdens amidst the high costs involved in these operations.”
Key benefits for buyers
The measure responds to historical requests from sectors related to the real estate sector, as argued by Jorge De Bártolo , president of the College of Notaries of CABA. According to his statements to Infobae , this exemption will be “of great help to buyers, especially to the average public, who usually have tight numbers for the acquisition of a property.”De Bártolo explained that among the key benefits is the reduction of the high transactional cost of notary fees, real estate payments and state taxes.
Furthermore, the update of the tax base "will facilitate access to owning a home and will stimulate the middle-high segment of the market ," he stressed. In this context, those who acquired properties intended for exclusive, family and permanent use were especially favored.
Economic implications and eligible units
To qualify for the exemption, properties must meet strict conditions: the home must be single-family, and intended for permanent occupation.Alejandro Moretti , a member of the Board of Directors of the Buenos Aires Real Estate Association, said that the greatest beneficiaries will be "those who buy their first home or those who, after selling their only property, decide to buy another and maintain the criteria of this benefit."
Notaries will be responsible for verifying compliance with the conditions for accessing the exemption (Illustrative Image Infobae)
However, he warned that properties above the established figure or those who own other property in CABA will continue to pay 3.5% in operations.
It should be noted that the increase in the exempt threshold responds to the increase in the value of the real estate market measured in dollars .
“The adjustment to the tax base had been requested repeatedly. We were pleasantly surprised that it was implemented. We regret that the base rate of 3.5%, one of the highest rates in the country compared to the 2% applicable in the Province of Buenos Aires, was not reduced,” said De Bártolo.
Fiscal impact and dynamics between the parties
With this new scheme, it is hoped that the cost relief will encourage the conclusion of agreements between both parties.As explained by the real estate sector, transactions that do not exceed $205,332,000 will be exempt from the tax, while the rest will continue to divide the 3.5% between buyer and seller. For example, a deed valued at $300,000,000 will imply that each party pays 1.75%, that is, $5,250,000 or its equivalent in dollars.
An inevitable side effect will be a temporary reduction in tax revenues from the real estate sector.
However, Moretti is confident that this will be offset by the dynamism that it will generate in the sector: “Whenever a tax is eliminated or reduced, it generates more investment, and in the long run it generates more revenue.”
Construction and real estate are major drivers of local investment.
Projections and challenges in implementation
This change places a crucial role in the hands of notaries as agents for withholding and confirming tax benefits. Despite the adjustments, some specialists stress the need to go further.Moretti suggested in statements to the digital media that “the new tax base should be adjusted by exchange rate, since real estate transactions are typically agreed in dollars.”
He also described the potential operational challenges: “The change will help make the act of signing the deed more agile and simple, although compliance with the requirements will have to be rigorously confirmed . ”
This highlights the importance of buyers consulting with their notaries before signing the deeds, the sector reported.
Advances
The update of the Stamp Tax exempt amount to $205,332,000 is presented as a key tool to boost the real estate sector, which expects to close 2024 with more than 52,000 deeds. The December data is yet to be incorporated to confirm the best performance in seven years.In addition, mortgage loans , money laundering and investment in real estate played a central role in the recovery of a segment that suffered more than five long years of crisis.
"The measure will allow for a reduction in the tax burden on home ownership in a context of inflationary adjustments. Beyond the challenges, it offers an incentive for first-time home buyers and promises to boost an activity that is necessary for the local economy," concluded Moretti.
www.buysellba.com
