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Rental Law: Javier Milei assured that he wants to repeal it - LN Propiedades
November 20, 2023Rental Law: Javier Milei assured that he wants to repeal it, will this time be the charm?
The president-elect Javier Milei declared among his first announcements that he wants to repeal the rental law, a premise that he always maintained
Javier Milei and the rental law: after becoming president-elect he made his first statements and referred to the repeal of the rule
The president-elect, Javier Milei, assured today that his idea is to repeal the Rental Law so that contracts can be freely agreed upon.
In statements to Radio Miter , Milei stated that this rule must be “repealed and understood that it is a contract between parties . ”
“ The only thing the Rental Law has done is cause damage .” “He ended up harming those he intended to protect,” stated the libertarian leader.
In July 2020, the rental law was passed, which received changes to some of its points in October 2023 . After having gone through extensive debates in committees in May 2022 without achieving anything, finally this year Congress returned to the issue of repealing or modifying the rule in force between August and October, both in the Chamber of Deputies and in the Chamber of Senators.
However, the leader of La Libertad Avanza was always in favor of the repeal because for him the changes are a “waste of time” since he considers that the law as it stands will not advance or solve the underlying problem in the market. real estate between tenants and owners.
Javier Milei and his block always opposed changes to the rental law in Congress
In the month of August, after PASO, his block was key to the quorum in Deputies that enabled the session but when it came to voting on the reform of the Rental Law he opposed any modification: first he voted along with Together for the Cambio, against the proposal of the Frente de Todos, and later together with the Frente de Todos and the Left he voted against the initiative of Together for Change and the federal blocks. He didn't budge from his idea of repealing or anything.
In October, after passing through the Senate, the changes to the law were again discussed by Deputies and were promoted by 128 votes in favor and 114 against. The deputies from the Frente de Todos, two deputies from the Federal Interblock, one from Juntos por Río Negro and four from the Left supported the changes. On the other hand, the deputies of Javier Milei (La Libertad Avanza), Together for Change and some provincial legislators opposed the ruling party's modifications.
Milei had already spread his opinion through his press team: “A new rental law is not needed. We must eliminate it and stop interfering in private contracts by destroying property rights. The only thing they will do is harm the most vulnerable with fewer properties, of lower quality and at more expensive prices.”
Something that the market has evidenced in recent times with real numbers: the increase in published rental prices since the law was passed in 2020 was almost 900% and the number of properties on offer on real estate platforms was drastically reduced.
"In the third quarter, an increase was observed in the published price per square meter for rental of used apartments, which averaged 204.8 % for single-room apartments, 212.5% for two-room apartments and 193.0% for three-room units ,” observes the latest report released by the General Directorate of Statistics and Censuses of the Buenos Aires Government.
And regarding supply, when the law was passed in 2020 there were 9,700 apartments for rent in CABA, and 10 months later , that number was reduced to 8,500, despite the fact that the historical average is 15,000. Currently Zonaprop publishes only 5,423 apartments for rent. In the real estate market, there has been talk for months that the immediate future will be “zero supply” and there are already neighborhoods in the city where that prophecy is coming true, such as Pompeii or Versailles.
La Libertad Avanza intends that there be no law but an agreement between the parties: owners and tenants
Publications and contracts in dollars
In his first public announcements after being elected president, Milei also highlighted that contracts can be agreed “in any currency . ” “Monetary freedom is part of the things we want to advance,” the president-elect concluded.His statements refer to one of the points that were changed in October regarding the currency in which rental announcements should only be published and contracts agreed upon: in pesos .
But, as the saying goes "law made, trap made": since the sanction of the changes to this part, a little more than 30 days passed and most of the publications that were previously in dollars began to say "check price."
In the first quarter of 2022, just over two out of every 10 rentals were in dollars. That number grew to a new high in the third quarter of this year and seven out of 10 were converted to US currency . The figures arise from the same report released by the General Directorate of Statistics and Censuses of the Buenos Aires Government.
Owners and real estate agencies put "check price" on the portals because rentals cannot be published in dollars and so that prices in pesos do not become outdated.
However, the new rental law that came into effect on October 18 prohibits publishing rental notices in any currency other than the Argentine peso. This caused a drop in publications on offer on several portals. But days later it went up again with notices requiring “check price” as it did not declare a value in its publication . That is, the owners who offered their apartments in dollars downloaded them from the platforms and then uploaded them again without a price.
“As the rule prohibits offering and making rentals in dollars, there was an exodus of publications on real estate portals ,” says Verónica Balayan, owner of Maure Inmobiliaria, a fact that makes sense when one considers that between 60% and 70% of the Offer published in Zonaprop was in dollars . And now that same percentage requests to “check price” from tenants who are searching.
Who else said they wanted to repeal the law but did not do so?
At the end of 2021, Sergio Massa - who at that time was president of the Chamber of Deputies - was the first official to admit the failure of the law a year and a half after it was in force: he suggested suspension for 90 days and up to He asked for its repeal. Even one of the main promoters, the former deputy of Together for Change Daniel Lipovetzky , acknowledged that the norm “had errors” and that “it did not work.” And Mauricio Macri tweeted “the rental law is a very bad law, which clearly failed. We have to repeal it and take the time to make another one that solves the problem.”Despite the 23 projects presented in May 2022 and the two opinions finally reached, no political force managed to generate consensus to gather the votes necessary for the sanction of a new law . The issue was also not part of the agenda for extraordinary sessions of Congress in early 2023.
Last April, the idea of repeal returned at a lunch between Massa and Alberto Fernández in which they agreed that “the law does not go any further.” Finally, in August, the opinions pending treatment were debated in Deputies and the opposition's opinion achieved the approval of the majority. In October, during its passage through the Senate, the debate was resumed and new modifications were made to the proposal and it returned to the Deputies for final approval. In all instances, the Milei bloc voted against because they never supported the changes but rather went for repeal.
The inaccessibility of a rental has been entering and leaving the public agenda at the pace of political interests with concrete shocks in the market that is paralyzed by each threat of repeal. Will this time be the charm?
The latest changes to the rental law
- Contract adjustments will be semiannual.
- The coefficient under which the adjustments must be calculated is the Casa Propia index.
- Owners will not be able to request payment of months in advance from the tenant.
- The requirement that rental advertisements be made in national currency (pesos).
- Owners will be exempt from paying Personal Property for the properties they use for rent.
- Exemption from paying the monotax for income from the rental of up to two properties.
- The possibility for both parties to deduct 10% of the annual amount of the rental contract from Income Tax .
- They will not pay the tax on the check in the bank accounts intended to collect those contracts that are duly registered with the AFIP.
- The obligation to register contracts with the AFIP is maintained , in accordance with the provisions of current law.
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