URGENT - Warning on capital gains taxes when foreigners sell their properties
This notice was on Craigslist. Does anyone know anything more about this. Sounds like it could be a real problem for expats who buy local property.
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NOTICE:
BE CAREFUL, Americans are being FINED huge amounts when selling!
Reply to: [email]hous-226252253@craigslist. Org[/email]
Date: 2006-10-26, 10:39PM ART.
I just thought I'd WARN all you Americans who are buying properties in Argentina. The local tax authorities, (AFIP) are applying ALL KINDS of fines and "surcharges" to foreignors selling there properties. It is EASY TO BUY, all you need is a "CDI", which takes 2 hours to get. BUT, when you go to sell your property. The local AFIP inspector holds onto your title, AND the funds, and starts a LENGTHY legal process, taking up to 6 months, before they "free" the sale of your property and give you "what's left" of the sale.
I am NOT selling anything. Just giving ALL of you a warning. I wrote the procedure on my website, you should read it! [url]www.hereicomeargentina.com[/url]
Just 2 weeks ago the "AFIP" sent out a bulletin to ALL "escribanos" and accountants giving them the detailed requirements for foreignors to sell. And it is LONG and requires LOTS of red tape. And added TAXES. JUST because you are foreign!
Sorry to burst all of your hopes, but YES, the AFIP IS applying FINES and Penalties!
Hello Everyone,
Sorry to burst everyone's bubble, but it is ALL TRU. Sad to believe, and some of you will refuse to accept it, but the AFIP is cracking down on EVERYONE, not just foreigners. Here is a "rough" detail of what they do and HOW: (remember that not EVERY local AFIP inspector will apply ALL the same fines and penalties, but the following is a "rough" outline of what they usually do)
When the "foreigner" goes to sell, the Escribano is LEGALLY obligated to submit a special "PERMIT" that the foreigner must fulfill. The "sale" is actually PUT ON HOLD why the local inspector does a THOROUGH audit on the history of the property.
I've seen properties take UP TO 6 months to sell, JUST BECAUSE of this inspection.
Here's what the AFIP inspector looks at:
The ORIGIN of the Funds:
He starts with the ORIGIN of the funds for your purchase. Did you bring the money LEGALLY into the country, passing it through the requirements of the Banco Central? MANY Americans come here, and go to exchange house, get their money and buy the properties WITHOUT ever declaring the origin of the funds or proving how the money was made. I am NOT SURE what the exact penalty is here, but I do know they are asking this question and giving fines!
"Impuesto a los Bienes":
They then look to see if you have paid your annual tax, called, "Impuesto a los bienes". This is a sort of a luxury tax and is usually around 0.75% of the "declared value". MANY Americans confuse this tax with the "ABL" tax paid 4 times a year, (usually received by mail) They are two different things! The yearly tax, "Impuesto a los bienes" usually requires a a document to be filed, by your tax accountant. If you never paid this tax, you can "catch up" at the time of the sale, but you will still need an accountant to prepare and present the docs for you.
Rental Income:
It's not over yet! The AFIP then looks at your passport and asks you, "Did you stay in the property, or rent it out?" If your passport shows you were out of the country, then you will BE REQUIRED TO CLAIM RENTAL INCOME. Even IF you didn't rent it. They will "presume" you did and add some "figures" to your fines and penalties. THIS is an area I CANNOT give exact numbers because I have not met an accountant here that knows the actual answer! (And I've talked with several! They are all taking about it, but the general consensus is that EACH individual AFIP Inspector comes up with his own numbers!
Declared Values on Titles:
The saga continues: The AFIP then checks the original DECLARED value, (what you declared in your title when you first bought it) and compares it with the actual values of properties in that neighborhood. And here, once again, I cannot give you exact numbers of fines or penalties. BUT, I know they are sometimes "adjusting" those figures, causing you to have an increase in both the "Impuesto a los Bienes" AND the "Impuesto a los Sellos", (a "stamp" tax required when bought or sold)
O. K. You can breath now. There are more details, but I am having a hard time getting all the information because it is not consistent between one AFIP office and another. The accountants have access to the information but there is SO much of it that not all can handle it.
Now, if you are actually STILL reading up to this point, wow, congrats! I am the original author of this notice I published on Craigs List. I followed a link to this website to see what everyone was talking about. I didn't know many of you were discarding it as trash and untrue, so I thought I'd ASK A QUESTION TO ALL OF YOU; If you think it is "bull----", then PLEASE TELL ME, if I am wrong, then what information do you have?"
True, NO CAPITAL gains tax, BUT lots of fines and penalties!
Let me clarify what I said. There are no capital gains tax in Argentina, but thats not the problem. What I am saying is there are all kinds of other fines and penalties that they are applying, ESPECIALLY for foreigners! And they all add up!