Investment Process
Buying real estate in Argentina differs
from the process' found in many countries. Almost ALL transactions are
conducted with CASH in U.S. Dollars, at a table, where the seller
literally counts the money in front of you.
(Note: Bring crisp,
pristine bills or the seller may reject them, seriously.)
It is
impossible for foreigners to get a loan from a local banking
institution, and very difficult for locals to obtain financing (must
haves: excellent job/salary, sizeable amount of assets). If you are
able to get a loan, the terms are NOT in your best interest (10 years,
10% interest, and 50% down).
1.
You need to register for a tax identification number - CDI. A CDI is
the equivalent of a Social Security Number in the United States. But
before you can obtain a CDI, you need a certificate that verifies your
address, which needs to be verified by the police. You can find the
appropriate police station by going here: Federal Police Website
When you arrive at the police station, tell them that you're applying
for a "Certificado de Domicilio" (Address Certificate) and bring a
photocopy of your passport, along with the original. You will fill out
a form and pay the local police 10-15 pesos ($3-5 U.S.). A policeman
will visit you at your apartment or hotel to verify that you have a
temporary residence in Argentina, usually the following day. The
policeman will give you a signed certificate after visual inspection.
This paper is important.
What you need: Passport, Copy of your Passport, 15 pesos, Address
2.
The AFIP is similar to the IRS in the United States; the AFIP is the
tax authority in Argentina. The next day, when you have the address
certificate you need to go to the AFIP Tax Agency that corresponds to
the address on the certificate (AFIP website).
When you find the correct agency/address, bring your verification of
residence, your passport (original and 2 copies of the first page) to
the AFIP.
When you arrive, go to the information counter and ask for the "Formulario CDI" (CDI Form). Before you fill out the form, go to the "Mesa de Entradas" (Entrance Desk) to take a number. This will save you time, because the wait is usually between 2-4 hours. Next, fill out the form, and wait for your number to be called. After your number has been called, the process requires an additional 5 minutes.
We suggest you get there when the office opens to minimize the wait (a
magazine or book might be useful as well). You will be issued your CDI
number during this transaction. Now you now have the power to purchase
property in Argentina, and pay taxes!
What you need: Passport, 2 Copies of your Passport, Signed verification of residence/form, Pen
3. Now
you need to find a purchasing agent that you can trust. In Argentina,
the BUYER and SELLER pay commission fees, ranging between 3-5% EACH.
There's also a VAT Tax (21% of 3-5%).
Very often, agents
representing the buyer are motivated more by a high purchase price,
rather than helping their client negotiate True Market Value. The
difference between Nancy Landi International and our competitors is that we build Long-Term Relationships, and thrive off of referral business.
It's important that you find a professional that will help you:
- negotiate on your behalf, IN YOUR BEST INTEREST (i.e. researching the market to know the True Market Value, through comparison to similar properties)
- understand the strengths and weaknesses of the property (i.e. fantastic proximity to restaurants and stores, but 10 blocks from the subway)
- understand the area and the nuances of the neighborhood (i.e. proximity to: schools, subway, shops, restaurants, museums).
Property in Argentina is sold by square meter. Translation: 1 square meter = 10.76 square feet. Each property is priced differently based upon many factors, some of which you may want to consider:
- the type of building (new construction vs. older - apartment/condo vs. town home
- the floor the apartment's on
- the natural sunlight
- the view(s) from the property
- the property's amenities (doorman, sauna, pool, Jacuzzi, tennis court, etc.)
- the properties monthly fees
- the properties location (in reference to: museums, theatre, grocery, subway, etc.)
- the properties construction materials
- the layout (open vs. confined)
4.
Once you've found an agent you trust and a property you want to buy,
you need to prepare your money for transfer. When you make an offer
(reserva), you typically need to give $1,000 to your realtor to show
that you're offer is serious. The owner does not receive this money;
it's held in trust by your agent.
When you make your offer to the owner or owner's agent, they have three options:
- accept your offer (this is rare)
- reject your offer
- counteroffer (this is the most common)
Your offer will usually have an expiration date of 3-7 days to give the
seller time to think. During this time, the seller/seller's agent is
prohibited from showing the property and accepting other offers. Also,
the seller's agent is ethically obligated to present the offer to the
owner, but many times fails to do so (to leverage your offer against
prospective offers).
Working with a trusted agent can help mitigate these risks. Also, it's
important when investing in real estate that you remain emotionally
detached, or you risk making a bad decision.
5. You have two options when the negotiation is finished and both parties have agreed to a purchase price:
Boleto (Down Payment)
The boleto is a usually a 30-40% down payment of the purchase price and
is used when the transaction is planned in the future (i.e. 2 months).
This is the point of no return, and if you decide to back out of the
deal, you will lose your sizeable deposit. Also, there's a law in place
that requires the seller to pay you double the down payment if they
choose to back out of the deal. This legal mechanism virtually
guarantees that no one ever backs out, and keeps the seller honest
(i.e. accepting a slightly higher offer).
Important note: if a boleto is used, all agents are paid their commissions at the time of the boleto.
Bypass Boleto, Proceed to Escritura
The escritura is the final deed transfer. At this stage, you pay the
remaining purchase price. The legal fees are also paid at this time to
the Escribano - a lawyer/notary public who does the due diligence on
the property and clears title.
If you do bypass the boleto, I would recommend that you use a Seña,
which is like a mini-boleto used to keep the seller "honest". Usually
this is 10% of the purchase price, and is used if the purchase date is
scheduled short-term. Like the boleto, the seller must pay you double
the deposit if they back out of the transaction, and you will lose your
deposit if you back out.
A Seña is good if the time between offer
acceptance and Escritura is minimal (i.e. two weeks), but there's still
enough time for the seller to get cold feet/accept another offer. The
Seña/Boleto are both down payments which help ensure that people follow
through with their word. Business practices in Argentina are not always
legitimate, and many times a breakdown in trust and communication can
sour a deal. And that's why it's important that you use an agent that
you can trust - Nancy Landi International.
info@nliproperties.com
