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The increase in Kicillof's real estate tax in the Province was approved up to 200%: How much will be paid - La Nacion Propiedades
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Se aprobó el aumento del impuesto inmobiliario de Kicillof en la Provincia hasta un 200%: cuánto se pagará
La ley impositiva 2024 se sancionó con modificaciones y los aumentos quedaron en un piso de 140% y un máximo de 200%
www.lanacion.com.ar
December 29, 2023
The 2024 tax law was approved with modifications and the increases remained at a floor of 140% and a maximum of 200%
By Mercedes Soriano
Axel Kicillof managed to get the legislature to approve the increase in the real estate tax in the province of Buenos Aires up to 200%
Last night, the Legislature of the province of Buenos Aires approved the 2024 tax law proposed by Governor Axel Kicillof, which provides for increasing the real estate tax up to 200%. In the session they also approved the request to take on debt for the equivalent of US$1.8 billion.
Progressive limits on the growth of the real estate tax were established with respect to the previous year, although with modifications to Kicillof's original proposal. The initial project intended for 90% of taxpayers to have increases equal to or less than 200% and the remaining 10% to have increases of around 300% . However, the three blocks that made up the Juntos bench (PRO, UCR and CC) negotiated with the ruling party to lower the limits to 200% for the highest assets and to 130% for the floor, instead of the 140% that had been proposed.
The sessions in both chambers began after 10 p.m,simultaneously. By nightfall, an agreement had been reached to advance the sanction of the regulations with strong modifications to to the projects sent by the Executive Branch. The Senate validated both norms at the stroke of midnight and Deputies completed the process half an hour later.
What is real estate tax?
This is the tax on real estate property applied by all Argentine provinces and the city of Buenos Aires. In the case of the Province of Buenos Aires, it is collected by the Collection Agency of the Province of Buenos Aires (ARBA) . The “basic” tax corresponds individually to a property and the “complementary” tax is charged in the case of owning a group of properties within the same floor.
The percentage of real estate increase in the province of Buenos Aires is determined according to the tax base of the tax, that is, the tax valuation of the property
Changes in real estate tax
The proposal presented by Kicillof aims to change a tax collection dynamic that would affect the pocket throughout the year.1. Seeks that all these taxes are adjusted progressively
According to official sources, progressive tax growth limits are established with respect to the previous year, , which increase with greater assets. That is to say, the value of the tax will increase progressively throughout the year in relation to the total tax paid the previous year. .
Government sources explained to Télam that "in property taxes we maintain progressivity, , with differentiated limits so that those with the greatest wealth contribute more" and it was indicated that "an extra fee will be charged from the Rural and an extra fee from the Urban only at 10 “% of the items with the highest valuation.”
The percentage increase is determined according to the tax base of the tax, that is, the tax valuation of the property . This is calculated according to the position it occupies in the table and the percentage is added for the excess amount. This calculation has a limit compared to the previous year, in this case 2023. “It could happen that due to the values of the new table, the owner is classified in a higher increase than before but according to the limit that applies perhaps the increase will be smaller for 2024″, says tax accountant Sebastián Domínguez.
For owners whose tax base is up to $5,054,912, the maximum increase can be 130%
As an example, the accountant illustrates: “If last year the real estate tax paid was $100,000 and the tax base was less than $5,054,912, in 2024 the tax may be adjusted up to 130%. That is to say, you would pay a total of $230,000.”
Domínguez details what happens if the owner has more than one property in the province of Buenos Aires: “Each property is analyzed separately and then the scale it falls on is examined according to the sum of tax bases to determine the increase that corresponds to it. ”.
In the city of Buenos Aires this same tax is updated based on the Consumer Price Index of the same city. In detail, the index is applied five months back. For example, in January 2024 the CABA CPI for August 2023 is applied, in February the September one and so on.
For the specialist, the General Paz dividing line defines how abrupt the impact of the increase is. “In the city there is an update but it is not as abrupt as what is intended in the Province”, He says. In that sense, he explains that for the owner of a single home who has the smallest tax base, the tax would increase 130% over the total he paid last year, below inflation. On the other hand, for the minority that the tax would be adjusted by 200%, the update could run above inflation if it closes the year below that figure.
The increase limit for the highest assets will be 200%
The tax at the country level
Due to the growing relevance of a relative price correction, a study by the Argentine Institute of Fiscal Analysis (IARAF) evaluated the dynamics of provincial property taxes in the last 13 years, since the significant inflation experienced in those years has resulted in a real deterioration in the collection of these taxes.Regarding the real estate tax, they analyzed that “the real value of the consolidated collection of the provincial real estate tax in the period 2011-2023 had a constant increase until 2018, and then also decreased constantly until reaching a level 43% lower to the maximum point in 2018. That is, if in 2024 we sought to return to the actual collection of the 2018 tax, the tax should grow by 75.4% and remain on par with next year's inflation.
Provincial real estate tax collection
Taking into account the tax collection in relation to the size of the economy, experts maintain that the dynamics of the tax are similar to reality. Compared to the year with the highest collection in terms of GDP (2018), 2023 would have a reduction of 0.19 percentage points of GDP.
“To recover the real level of collection of 2018 next year, the average increase in two taxes (real estate and patents) should be 66%. If the collection of both taxes were increased to the 2018 level, revenues would grow by 0.28 percentage points of GDP, which is equivalent to 30% of the projected provincial revenue loss for 2024 of 0.93% of GDP,” they conclude.
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