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Properties: The impact of the devaluation on sales and the fine print of the new stamp tax - La Nacion Propiedades
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Propiedades: el impacto de la devaluación en la compraventa y la letra chica del nuevo impuesto de sellos
Los especialistas ahora sí hablan de una “leve recuperación” del mercado y la fiebre del trimestre de agosto a octubre empieza a enfriarse
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Specialists now speak of a “slight recovery” of the market and the fever of the August to October quarter is beginning to cool down
By Mercedes Soriano
The real estate market recorded the best November sales in the last five years
November once again smiled on the real estate market. Despite going through a change of government, with the uncertainty that this implies, 2023 was positive for the purchase and sale of properties . The city of Buenos Aires is a clear example of the trend, since in the 11th month of the year 4,068 operations were carried out. The number is celebrated by the sector, as it is consolidated as the best November since 2018.
In fact, the total number of property purchase deeds in November was 20.7% higher than last year's level. Although it is far from the peak of 6,805 purchase and sale agreements signed in 2017, 2023 shows a good streak.
November data places it as the eleventh best month in the last five years
“In what is more seasonal, perhaps it can be read that it was a quarter (August-October) with more activity than usual and especially in an electoral year and now - with those operations completed - that escalation has softened . Hence there is a 10 percent decrease compared to the previous month,” analyzes Jorge De Bártolo, president of the College of Notaries of the City of Buenos Aires.
It is worth noting that the year generally continued with an upward trend in property sales. Since August, the monthly results are around or even exceed 4,000 operations per month.
Even so, the December results are pending to make a complete and reliable summary of 2023.
Since August, the monthly results are around or even exceed 4,000 operations.
“Another positive fact is that we have added 19 months of year-on-year growth and that outlook is not a boom, but at least it is reassuring that there is a slight line of recovery . Beyond this data, what we want as an institution is that bases be generated so that a housing policy is reflected, a key factor for the aspirations of any family."
In another order, in November there were 166 deeds formalized with a mortgage in CABA. In that sense, the increase was 12.2% compared to the same month in 2023.
Your own home, further and further away
When buying a home, the buyer has to face a series of taxes such as real estate fees, notary fees, and deed costs.This December, the Buenos Aires legislature updated the 2024 rate table and with it the amount of another tax to pay: the Stamp Tax for the purchase and sale of real estate. The buyer who has more than one property in his name in the city is charged a rate of 3.5% of the value of the property, to be paid equally between the buyer and seller.
But those who do not have real estate in their name and therefore acquire this property for the purpose of single, family housing and permanent occupancy, are granted a tax exemption of a certain amount . If applicable, a fixed sum determined by the Government is subtracted from the value of the property and a 3.5% rate is applied to the surplus.
The amount that during 2023 was $10,950,000 will become $24,889,350 in 2024
That is the benefit figure that the legislature updated this December for next year. The amount that was $10,950,000 in 2023 will become $24,889,350 in 2024 . At the current official exchange rate of $824.5, the amount went from covering US$13,280 in 2023 to covering US$30,187.2 in 2024, as long as the value of the dollar does not increase.
Santiago Levrio, institutional director of the community of Urban Developers -Alianza Urbana-, believes that the updated amount “toughens access to housing” , given that historically the tax on stamps for a single home was able to cover US$110,000.
Julián González Mantelli, city notary and legal-notary-tax advisor, validates these data: “ Originally, these amounts represented figures closer to US$100,000 but due to the devaluation they were liquefied .”
This year alone, the devaluation of the peso posed a different reality for the buyer who purchased their unique home at the beginning of the year compared to today. For example, whoever purchased a home for US$100,000 on January 2 when the official dollar was quoted at $184.75, the value of the pesified property was $18,475,000. Therefore, the tax was $646,625 and as the buyer and seller paid it equally, each would have paid $323,312.5 for this tax.
Originally, the amount of exemption from stamp taxes represented figures closer to US$100,000 but due to the devaluation they were liquefied
However, if that same property were purchased today for US$100,000, its value in pesos at the official exchange rate would be $82,450,000, from which the exemption of $10.95 million would have to be subtracted and the total tax would be $2,502. .500. That is to say, the buyer of his first and only home in the city would have to pay $1,251,250 in stamp tax (and the seller would pay the same amount), almost four times more than he would have paid in January.
This reality would change - although not very significantly - if that same buyer decides to purchase the property in the first days of next year. Assuming that the exchange rate remained the same, the buyer could pay less for the same tax: $1,007,311.38, , since the fixed amount would rise.
González Mantelli explains in dialogue with LA NACION that, since the 90s, each province has the ability to dictate its tax code and regulate the stamp tax therein. “In Buenos Aires, for example, they take into account the tax valuation of the property, which is $1,154,400, much lower than the city's exemption amount, , although this year they have not yet updated the rate law for 2024. On the other hand, On the other hand, in the province the rate is 2%, lower than that of the city,” he says.
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