real estate & property management guide buenos aires, argentina

Buying real estate in Buenos Aires Argentina is relatively straightforward. There are bureaucratic hurdles, but it is important to follow the rules, as playing it straight will make your life easier when the time comes to sell an investment property.

Coming out of the stalls and down the fairway is finding the property.  There are many estate agents or Realtors (inmobiliarias) and we only deal with agents that we feel conduct business in an honest and professional manner.

Understanding fees levied by the inmobiliaria is your first hurdle.  Estate agents or Realtors charge both ends of the transaction, buyer and seller, and typically, you should expect to pay fees of between 2 % and 5%.

Critical research when Buying Buenos Aires real estate

Never be rushed, if you lose a property because of uncertainties so be it. When buying investment property, buy with your head and not your heart – heed our advice.

Choosing the right location with easy access to communications (subte, etc) are very important. Is the property far away from main avenues like Santa Fe, Alvear, Callao, etc? Is the subte close by? Is your property in the main tourist hub? Step across some of the major avenues that are boundaries and you are in another barrio and the property prices change. Knowing the city and understanding property values and buying trends for both sales and rental is critical when choosing an investment property.

Is the barrio or neighborhood safe? Like all capital cities Buenos Aires houses some of the wealthiest and poorest neighborhoods, is the property located in or around an area known for high crime.  This is particularly important if you are looking outside the main ‘tourist barrios’ and at the low end of the market.

Are you talking to a reputable inmobiliaria? This is important because we will base our initial offer and pay our reserve based viewing the property and on the property particulars that should be correct and verified by the agent.

What is happening in the building and locally? Before suggesting a property, we speak to the porter, neighbors, and local real estate businesses.  The state of the common parts, the service charge and the company that manages the apartment building are important ‘indicators’ that we research on your behalf. We always know somebody local and what is ‘said’ to be happening -environmental factors affect property price.

Is the property sound, does it need work? We have both structural engineers and architects who will attend older properties to quote on works before you make an offer.

Do the floor plans provided by the agent and your measurements match? It is important to both measure the property and check your findings against the floor plans provided by the agent to prove the square meters. Agents calculate property price in dollars by the square meter covered and uncovered.

You cannot buy a property in Argentina without a CDI, (Clave De Identificación). I have avoided writing about the personal administration necessary to buy real estate in Buenos Aires Argentina and in particular about obtaining a CDI, (Clave De Identificación) from the AFIP, because I deal with this process in detail in my next article.

Once you have found a property, you can make an offer, this may be the full asking price or a slightly lower price or indeed much lower price if the property is grossly overpriced -  owners always ‘chance their arm’ and the owner can only say no. We provide market comparisons and help you decide on what offer you should make.

At this point it is not common to involve a surveyor in property transactions, but if you are unsure of anything or plan to make alterations seek advice before making an offer. However, going back to an earlier point, this is a major investment, take your time and if the agent or the owner will not give you time, move on to the next property.

However, it is important that you understand the psyche of owners because an unreasonable offer can cause bloody-mindedness and make for difficult negotiations.

Remember that owners buy their apartments with hard cash, a loss making deal or selling below market value is rare.

Once seller and buyer agree on a price, you will need reserve the property. To do so, you make a small deposit with the selling agent to indicate your seriousness, something in the region of us$500 to us$1000, called a Reserva de Compra (reserva).

At this point, we always insist that we use our own “escribano” for the purchase and verify floor plans provided by the agents – sometimes, the plans from the title deeds are available.

These points are important and they explained in detail later in this buying real estate Buenos Aires Argentina guide. Most owners will not handover any information until you make your interest clear by paying a reserva.

When you pay the reserva, you will sign a pre contract that will give you an agreed number of days in which to find a formal deposit called a boleto de compra-venta (boleto).

Some sellers may want to complete the transaction partly in “black”, that means they declare part of the sale price and receive the rest of the payment “under the table” so to speak.

Beware! This practice is illegal, okay it will save on stamp duty, but when you come to sell, it will exaggerate profits and may increase your future tax liabilities.  We use the word ‘may’, because currently, there is no capital gains tax on property sales.

To be clear, when selling your property asset you pay no tax whatsoever on the profit you make.

The formal deposit is normally around 30% of the purchase price of the property, you will sign a contract boleto de compra-venta (boleto) with the seller in which you agree to complete the purchase within a given period, perhaps one month from the date of payment.

There is one minor problem when signing the boleto, you need to pay a deposit of 30%, so on a sale value of us$100,000 you will need us$30,000 in cash.

Whilst laws allow foreigners to transfer funds into the country for the purchase of property, strict regulation ‘police’ money transfers, and you can only allowed to transfer funds for the final contract, not for the deposit stage boleto.

“Income from non resident investment applied to purchasing real estate—Code 489—

shall be exempt from the statutory deposit insofar as the funds are settled

simultaneously to the signing of the deed (Communication “A” 4762)”

We suggest that you consult us about opening a bank account and transferring money to Argentina as there are ways to resolve this issue, but planning will save you both time and money.

Once the boleto is signed, you are committed to the purchase and the seller is committed to the sale, if you pull out the seller will keep your deposit, if the seller pulls out, he will be required to refund your double your deposit!

The boleto may also state the location for the signing of the final contract (escritura), the details of your escribano and any furniture or special conditions to the sale.

The time between paying the boleto and signing the escitura gives an escribano sufficient time to investigate the property further and more importantly for foreign buyers, the time to arrange the cash.

Before you complete your purchase, a public notary, escribano, examines the title deeds (Informe de dominio).

The role of the escribano is to check the title deeds and convey the sale, check that all expenses due to be paid by the seller are paid up to the sale date.

The escribano will not visit the property and will only be concerned with the property described in the title deeds.

The escribano will obtain the Informe de dominio from the land registry (Registro de la Propiedad Inmueble).

This information provides comprehensive details of the property dimensions and any outstanding loans secured against the property

We stated earlier in this buying real estate Buenos Aires Argentina guide, but its importance requires a second mention – the buyer should ask to see a floor plan of the property and confirm that the space you are buying is included in the title deeds. You are paying by the square meter.

In addition, we have come across the odd situation where property owners extend their properties into common spaces like stairwells, balconies and terraces or claim a roof terrace they use exclusively as their own, but the space does not appear on the title deeds.

Many times, owners know their neighbours and get away with this by informal agreement, but they do not hold legal title to that space. It is not common, but be aware.

It is possible to move directly to the final contract (escritura) stage but this is uncommon and inadvisable, your escribano must have adequate time to make very important checks before completion.

Both the buyer and the seller will be required to pay 1.25% stamp duty but there are concessions for first time buyers so discuss this with the escribano or estate agent. The escribano will charge a fee of between 1.5% and 2%. I is advisable to agree with the seller before any contact is signed as to who will be paying fees.

After your purchase, you will need to pay an annual property tax that is of 1.25 per annum as a non-resident based on a value of the property in the title deeds. It is important this is paid on time as there are penalties, so you will need an accountant. In addition, there will be taxes on any rents you receive.  You can consult us about costs and returns on Buenos Aires real estate investment.

I write this buying real estate Buenos Aires Argentina guide for general information based on my own experiences. I do not intend to replace proper legal and financial advice.

If you wish to consult us about real estate investment in the Argentine either face-to-face or online contact Terry Alan Clarke at help [at] sos-prop.com

Other Reading:

• Property Investment – Why Argentina?

• Buenos Aires Property Management

• Property Investment Costs & Returns

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