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Mortgages
Real Estate Financing in Mexico,
Latin America and the Caribbean
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Buying Real Estate in Argentina
Legalities and OwnershipIn order to buy real estate in Argentina, you
require a CDI Number, which is very similar to Social Security Number in U.S.
You can go to the local police station with your passport and your local address
to apply. They will verrfy your local address and give you the forms that you
area required to file. A fee of less than $10 USD is paid. After that you need
to visit the AFIP Office, the tax authority in Argentina known as Dirección
General de Rentas. The CDI number is effectively your tax ID.
After
getting a CDI Number, you will be eligible to buy a property in Argentina and
register it in your own name. In Argentina, a notary, or escribano, is
responsible for supervising the legalization or real estate transactions and
title transfers. Argentina has a realatively sophisticated title registry that
enables foreigners to trace property ownership easily. The notary will inform
you if there is any problem with the property's title, or escritvra. A
notary fee of 1 to 4 percent will be charged depending upon the notary you
choose.
Financial MattersFor foreigners interested in buying property in
Argentina, financing is by and large a remote possibility. Fianancing in
majority of cases is not available to foreigners. Under most circumstances,
foreigners must pay 100% cash in advance. The interest rates on mortagage
financing are extremely high, and in the past have not been less than 15% per
annum; the have a reltively short period, 10 years, and often require a down
payment as high as 50% of the purchase price. If you don't have the needed
funds, you would be best to look for financing in your home country. The reason
being as a foreigner you won't be able to show an income or a credit history in
Argentina. Real Estate buyers pay brokerage fees plus VAT taxes when working
through real estate agents as professional service fees require a VAT Tax in
Argentina. The standard brokerage fee in Argentina is 3%.
Once you have
decided to buy a property, the next step is to demonstrate your seriousness with
your realtor by putting up a deposit of some amount called reserva which is
similar to an earest money deposit in the U.S, which is placed in escrow. Often,
such a deposit can be as little as $10,000 USD. At this point, the seller will
consider your offer. If the seller declines, your deposit is returened to you.
Once a deal is accepted and formalzed, a down payment, or boleto, of 30% of the
property value is normally paid buy a buyer. If the buyer backs out, he or she
will lose the down payment. On the other hand, a typical agreement also provides
pnealties for the seller if the seller as well who has to return the down
payment amount plus an additional 30%. All realtor's fee are paid at the time of
the boleto.
Other Important IssuesIf you are buying a property in Buenos Aires, a
stamp tax known as impuesto de sello of 1.25% of purchase price is to
be borne by both buyer and the seller when transferring the title of a property,
though the stamp tax rate differs from province to province in Argentina. This
tax is waived for those purchasing property for the first time. So, if a
foreigner plans to buy more than one property the tax applies. An annual "asset
tax" or "personal goods' tax", impuesto del activo in Spanish, is
another tax that you are subjected to as a property owner in Argentina. Usually
it is charged as 1% of the value of your property and applicable equally to
foreigners and local citizens.
It is important to note that the
government does not send a bill to property owners. Rather, property owners need
to file a tax return with Argentinean Authorities, the AFIP Office,
(Dirección General de Rentas) and submit it along with payment. Almost
all the major banks in Argentina provide Homeowners' insurance. Chubb Group (http://www.chubb.com) is one such
company offering you real estate related insurance policies in Argentina. Costs
run about 50% more than what you may pay for similar insurance coverage in the
United States or other countries of the world.
All apartments in
Argentina carry a monthly maintenance fee, the "condo fee" refered to normally
as expensas. The monthly fee covers any building repairs, services, and
upkeep.
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