Buy Property in Chile
The Real Estate Buying Process in Buenos Aires
**Please note that this information was correct as of January 2007-things change quickly in Argentina so be sure to check, double check and triple check before believing anything**
The process of buying real estate here in Buenos Aires is not actually all that complicated once you know how the system works and who you can trust. The following information is a guide to how things should work, although in reality there are usually one or two minor hiccups along the way.
Firstly, you need your tax number. The tax authorities issue a temporary number called a CDI to non-residents. In order to get this number your need to go to the tax office (AFIP) that corresponds to your address in Buenos Aires. Before going to the tax office, however, you need a police certificate or "certificado/constancia de domicilio" which is used as "proof" that you're living at a certain address. The address could be a hotel or apartment. You need to go to the police station that corresponds to where you're living, show your passport, pay 10 pesos and ask for the certificado. The next morning, a policeman will stop by your hotel/apartment and make sure you're actually living there. Don't worry, they're not interested in your immigration status! With the certificado, take 2 copies of the photo page of your passport and 2 copies of the page with your entry stamp to your corresponding AFIP office and be prepared to wait for a couple of hours.
Once you have this tax number, you're legally able open a bank account and to buy property.
Secondly, you need to find your property. Once you find a property that interests you, you usually pay a ‘reserva’ of around US$1000 to the real estate agent and make your offer. You should always offer around 10-15% lower than the asking price. Argentina is not like the UK or US where properties often sell for more than the asking price. That never happens here.
This reserva is generally valid for between a week and 10 days, during which time the agent is not allowed to accept any other offer on the property. The reserva should be 100% refundable should you choose not to go ahead with the purchase and it important to make this explicit before signing any documents.
Should the owner accept your offer, the next step is to pay a “seña”. Many people talk about signing a ‘boleto’ of up to 30% of the value of the property. This is almost always illegal, unless the 30% boleto is less than US$10,000.
Why? Because non-residents are not allowed to bring more than US$10,000 into the country undeclared. When non-residents send money to Argentina, the government takes 30% and holds it for a year (to avoid currency speculation). The only exception to this rule is for the purchase of real estate. However, the bank that brings your money into the country (and there are only 2 or 3 that are legally registered to undertake this type of transaction) can only release the funds when you sign the final contract for the property and only if the amount on the contract corresponds to the amount sent into Argentina. So that makes signing a boleto of over US$10,000 impossible and illegal.
Many people have been using private banks or exchange houses to avoid these regulations. Some agencies that help foreigners buy property here have been encouraging their clients to do this without warning of the risks. They have been committing a crime and, at some point, the government and tax authorities are going to start cracking down on these illegal inflows of money. It is not worth the stress and worry of this when it is possible to do things legally for a small amount more.
What most people do is sign the aforementioned seña. It’s basically a mini-boleto, usually of around US$5,000. If the seller backs out they have to return the money to you and double it. Same for the buyer. However, it’s important not to sign anything until you’re sure that there are no problems with the property; debts, inheritance problems, non-authorised sellers are common-ish issues. A notary public, or “escribano” does the title searches and acts as your title insurance. The property registry system here in Argentina is centralised and very effective so a good escribano will spot any potential issue immediately.
Assuming everything’s in order, you sign and pay the seña and then the escribano finishes his job by writing up the contract and getting the appropriate government stamps. The time between signing the seña and the final contract or “escritura” can be as little as 2 weeks. It is when you sign the escritura when the bank releases your funds. And when you hand over the entire amount of money in physical cash. That’s right; property sales are conducted in cash. Bank transfers are almost unheard of. It’s a strange system but that’s the way it is here.
So that’s basically the real estate buying process here in Buenos Aires. If you know what you’re doing, it should all run according to plan. If you’re unsure of how things work then you need to be very careful about who you trust and which professionals you use. Real estate agents are, on the whole, completely untrustworthy and you should never use an escribano recommended to you by an agent as they could well be in cahoots and be trying to scam you. You should use an escribano recommended to you by a friend, associate or anyone who has had a positive experience with one.
If you need help with searching for and buying a property here in Buenos Aires then contact us at realbuenosaires@hotmail.com and check out Real Buenos Aires for more information about buying and costs.
Property purchase process:
•Organise tax number
• Find property
• Pay reserva
• Pay seña (assuming all papers are in order)
• Sign escritura and hand over cash.
• Take possession of property.
We now work in Valparaiso, Chile. We offer investment services to foreigners wishing to buy real estate in Chile
