 Real
estate investment opportunities in Argentina are beginning to rival
those in more well-known emerging markets, in part due to the country's
rapidly growing economy. With GDP rising by 8.5% in 2006 alone and
further growth of 7.5% predicted for 2007, Argentina possesses a strong
economy that provides solid potential for investors. Combine this with
a government backed tourism industry which has grown 10% year on year
since 2003, and property prices which have risen 50% since 2002.
According
to the Argentine real estate trade group, Camara Inmobiliaria
Argentina, housing prices have increased 50% since 2002, while The
Guardian reports that Argentine property prices have been rising
steadily over the last few years, with house prices in the Buenos
Aires' wealthier districts up by as much as 25% last year alone. Yet
although real estate prices have soared, they still look surprisinglycheap, with "The Guardian reports that Argentine property prices have been rising steadily over the last few years" |
prices in prime real estate locations still only one-tenth of what they are in the United States and Europe. The
rapid increase in house prices has left the market out of reach of many
Argentineans, creating a high demand for rental properties and thus a
superb opportunity for the real estate investor. Rentals can also prove
profitable for the buy-to-let investor. In major tourist and business
areas in Argentina, apartments are often provided fully furnished, at
prices lower than the better hotels. Online booking agencies make the
process simple and profitable for the overseas investor.
In
summary, Argentina has a booming economy that presents a wealth of
opportunities for the real estate investor, both in the rapidly growing
domestic market and in the thriving tourist industry. With impressive,
consistent growth in both sectors, backed by positive government
initiatives, investors can expect both steady capital growth and
generous rental income for the foreseeable future.
Argentina: Purchase Process
Below is the standard purchase process in Argentina, and issues that may affect that purchase:
- This
market is open to all; there are no restrictions on foreign ownership
of property in Argentina. Foreigners have the same rights in this
respect as nationals, except for Argentine land near a foreign border.
In this scenario, some additional paperwork is required, which may take
a little longer.
- As a foreigner, you will need a CDI,
or tax number. The process for obtaining one is fairly easy, but
personally time consuming. You must go to a local police station with
your passport, fill out a form and pay a 10 peso fee. The next morning
you must stay in your domicile so that the police can verify your
address. They will show up and provide you with an Address Certificate.
- After finding a property and negotiating an agreeable price, the buyer typically pays a boleto or down payment of around 30%.
- The
escritura is the closing date and when you sign the final papers. This
is performed with the aid of a notary public, who is very important in
this process.
Costs of a standard property purchase in Argentina include the following:
- Stamp Duty is typically 2.5% of the sale price, but can be as much as 4% in Buenos Aires.
- Buyers and sellers both pay agents' fees of 3%, with 1% each to the notary, and a sales tax of 3%.
- There is a net wealth tax that is levied at a rate of 0.5% on the total value of all the taxable assets.
- Rental
value corresponding to real estate properties belonging to local
taxpayers exceeding $ 1,500 a month is assessable with 21% VAT. Rent
related to real property occupied by the tenant exclusively for
dwelling purposes is exempt from VAT.
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