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  1. #33

    Fair enough

    Thomaso:

    Your points are well taken, too. AFIP is going after cheating Argies big time, not targeting us in particular. And a lot of basically honest foreigners bent rules or broke them because they were advised as you indicate, and apparently with some cause.

    I suppose some penalties will be applied, and that is a risk that rule benders take in the first place.

    I think people buying in now will be fine, I understand (for example) that it is not that hard to set up a bank account and transfer funds the official way now. A friend of mine just closed, using Banco Galicia as I recall.

    HF

  2. #32

    Agree

    HF, I agree with your assesment, but want to point out that AFIP started targeting the Argies a couple of years ago as they were the most agregious offenders of not paying taxes and skirting all normal rules of property investment. In fact there are constant reports about the Gov't increasing tax collections over the past three years, something Kirchener pushed for upon his election.

    I think alot of foreigners did not comply simply because their advisers (real estate, lawyers) told them not to because the system was broken and nobody cared.

    PS: got a letter from my building administration about AFIP collecting info from their records, I think they are fighting the proposed system based on some constitutional, lack of authority under the law stuff.

    See ya soon.

  3. #31

    What is so unreasonable about AFIP policies?

    Americans who own real estate in Bs. As. Are a subset of those who travel there in the first place, and naturally tend to be pretty independent folks. For some reason, may of them do not seem naturally inclined to pay tax on rental property income. That is Argentine source income, supported by Argentine government infrastructure, and Argentina tax is plainly owed.

    You might think the Argentine government inefficient, but that is no excuse not to pay taxes, particularly a country that you chose for your investment. You can deduct the amount of tax or get a credit (I don't know which, I am not sure if its VAT or income tax) against American taxes on the same income, assuming you are honest enough to report that income. I don't rent my place out but generally understand that the rates are low compared to US tax rates.

    Yes, AFIP may hold up transfer of funds if you have declared no income. Yeah, you have to prove you were using it yourself (use your passport to show when you were here) or that it was empty ($ 0 or tiny electricity bills will help; save them) This process is a response to fairly open and obnoxious foreign non-compliance with tax laws, and in my opinion it is no worse than having to support deductions with receipts in the USA. Many countries inclduing G-8 members impose restrictions on payments out of country in order to stop tax evasion.

    As to requiring wire transfers, that will be great. The counting of $ 100 bills and then moving them by armored car is a pain in the neck and a nerve-racking way to close deals. If it stops underreporting of transfer price so that a comparatively low annual tax of 0.75% of purchase price can be effecitvely collected, more power to them. This 0.75% rate is lower than tax rates in most US cities, I believe. More important for foreign investors, this will likely create demand that will lead banks to make the transfer process practical, even if they act in a conspiracy to hold the line on currency movement / conversion fees or even increase them.

    Foreign investors moved funds through private banking houses or by suitcase or whatever because the bank system was cumbersome and unreliable, and I am informed that it is already much better and easier for foreigners to work with. If we lose 1 or 2% in the process, so what. That is in effect a trivial tax on investment.

    IMHO all of this relates to legitimate government control of tax revenue and funds transfer, and does not indicate an increase in the chance of expropriation. [[Others may differ, I view expropriation as extremely unlikely for cultural and global economic reasons.]]

    The sky is not falling.

  4. #30

    I am NOW Purchasing a property here FROM English owners: The journey begins!

    I thought I'd make a comment about what I have to go through while buying a property here in Buenos Aires FROM English owners.

    The first step, which has started about 30 days ago, was for the English to get a permit from the AFIP. They left a power of attorney to their accountant and he submitted the request right away. They took 3 weeks to give the "o. K." to sell. We are putting the actual REAL price on all the paperwork, so maybe by seeing a rational figure, the inspector didn't take so long. NOW, the "red tape" has slowed down. Thanks to the effect of January, everyone must be on vacation, but supposedly from this point, we will submit all the paperwork to the AFIP and await the final approval. We are trying to do the "Escritura", (signing) in the first week of February. I will keep everyone posted on how this all goes. REMEMBER, this is pretty much what those of you who have purchased props will eventually have to go through. Better learn what you are up against ahead of time!

    Paul
    Last edited by Chascomus; 01-11-07 at 01:03. Reason: mispelled

  5. #29
    Is it feasible to incorporate locally to bypass some of these issues? I know that in Costa Rica and other places it is a viable option.

  6. #28

    transfers

    The way around it is pretty simple, pay part by wire (taxable) and under the table, ps I have sent at least 20 large transfers to banks with no deductions for taxes at all, not once.

  7. #27
    Senior Member


    Posts: 1043
    The government indirectly and unintentionally legitimized small parts of the economy via the corralito.

    The legitimization of Argentine real estate transactions, however, is about as likely as a communist governor of Texas.

  8. #26

    And now the local AFIP wants to require ALL SALES of props be done by BANK TRANSFERS!

    The AFIP, (Argentinas "IRS") is now claiming that by next year they will require ALL purchases of properties to be paid by "official" bank transfers, (wired or check). Instead of the common method of taking out stacks of 100 dollar bills and counting them one by one. This would mean that MOST AMERICANS will have a HUGE obstacle when trying to buy, since most Americans are doing the wire tranfers of money to "under the table" exchange houses.

    The AFIP wants to gain more tax revenues and try to stop the "under-valued" prices put on the titles.

    The Argentines will find an easy way around all this. But HOW WILL FOREIGNERS BUY properties if they have to go through SO MUCH red tape to transfer money? Anyone have some actual experiences to share?
    Last edited by Chascomus; 11-20-06 at 15:24. Reason: forgot to add info

  9. #25
    Quote Originally Posted by Hunt99
    By the way, "triple net" is the operating profit one makes from a real estate investment net of mortgage, net of taxes, and net of maintenance costs. In order for an investment like this to make sense, it ought to be well above the amount one could make from a safe investment, such as bonds, CDs, and the like.
    Thanks. I always enjoy learning something new.

    I rented an apartment in Recoleta for a spell, and the woman who owned it told me that from an investment point of view, she could have done much, much better investing her money in something along the lines you mention. For her, it was simply an issue of wanting to have an apartment she could go to from time to time to get away from it all.

    I also have a porteno friend who lived in Washington DC at the same time I did, and who saw (and profited from) the phenomenal rise in housing prices a few years ago. He understood that DC was my most recent frame of reference for real estate investing, and warned me in the clearest possible terms not to buy something here for any other reason than to live in it.

    Those are my fundamental data points on real estate as an investment here. I personally have no thoughts about owning property here other than from a quality of life point of view.

    SL

  10. #24
    Senior Member


    Posts: 1543
    Quote Originally Posted by StrayLight
    But I'd not wish ill on my fellow mongers who have chosen to do so, any more than I'd want a friend wishing my dick would fall off from fucking hookers.

    SL
    True enough, and I see the basis for your point. However, I don't think it's wishing ill on people to warn them against doing something pretty foolish. Which was why I used the hyperbole that I did.

    By the way, "triple net" is the operating profit one makes from a real estate investment net of mortgage, net of taxes, and net of maintenance costs. In order for an investment like this to make sense, it ought to be well above the amount one could make from a safe investment, such as bonds, CDs, and the like.

  11. #23
    Thomaso,

    My accountant is a VERY reliable and trustworthy guy from the town of Chascomus, 1 hour from the city. We worked for the same factory 10 years ago and now he has his own practice. Still doing all the accounting for the entire family of my wife. He said he would be glad to handle cases I bring him. But I think it would have to be by phone as a visit to his office is a bit of a ride. He comes to the city often, once a week. And all our paper work we send with the couriers.

  12. #22

    Impuesto a los bienes

    Stray light,

    I just talked with the accountant and she said the impuesto a los bienes is between 0.5 and 0.75% , yearly, and it pretty much goes up according to the "evaluacion fiscal" (fiscal value) that the province tells you each year. She said it almost never goes down. And the formula you mentioned, I think is confused with the deductions, (long term) you can "capture" on a business investment for a "SRL".

    The impuesto a los bienes is NATIONAL. Neither province nor capital. Everyone pays.

    Quote Originally Posted by StrayLight
    Here's a question for you.

    An Argentine accountant told me last year that the "impuesto a los bienes" is computed as follows.

    The total value of your property is divided into 80% for the building or apartment, and 20% for the land on which it sits.

    The first year, you pay the 0.75% on the total amount that you paid.

    Every year thereafter, the value of the building or apartment is decremented by 2% , and that after 50 years (if you keep it that long) you are only paying the tax on the land.

    Can you authoritatively confirm or discount that?

    Thanks,

    SL

  13. #21
    Quote Originally Posted by Hunt99
    I'm glad we cleared this up. If you don't know what triple net is, you have no business commenting at all about real estate transactions.
    My comment was about a member monger wishing ill on his fellow mongers. A very nice sentiment.

    Furthermore, having bought property in Argentina, I have every business commenting about real estate transactions here. I'm guessing that I know a hell of a lot more about them than you do. Perhaps what I don't have any business commenting on is the investment value of purchasing real estate here. But investment is not why I bought a place here, so you'll get no argument there on my part. Nonetheless, from what I've heard I tend to agree with you that it's not such a good idea. But I'd not wish ill on my fellow mongers who have chosen to do so, any more than I'd want a friend wishing my dick would fall off from fucking hookers.

    SL

  14. #20
    Senior Member


    Posts: 1543
    Quote Originally Posted by StrayLight
    Not only do I have absolutely no idea, I don't even know what I "triple net basis" is.

    But I do know a preacher when I hear one. LOL!

    SL
    I'm glad we cleared this up. If you don't know what triple net is, you have no business commenting at all about real estate transactions.

  15. #19
    Quote Originally Posted by Hunt99
    SL, how much do you think the typical Yanqui investor in BsAs real estate makes on a triple net basis?
    Not only do I have absolutely no idea, I don't even know what I "triple net basis" is.

    But I do know a preacher when I hear one. LOL!

    SL

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