(iii) a detailed description of the property to be acquired; (iv) the current condition of the property to be acquired; (v) time of conveyance of the possession over the property; (vi) tax treatment of the transaction; (vii) general obligations of the parties; (viii) appointment of a notary public for the granting of the transfer deed; and (ix) provisions in connection with parties’ failure to compliance with their respective obligations. b) Transfer Deed. Once the due diligence of the title has been completed and the certificates have been obtained, which usually takes about 30 days, the parties shall grant the transfer deed which has substantially the same content as the preliminary purchase agreement. Parties may directly sign the transfer deed and not sign a preliminary purchase agreement. The notary public is usually chosen by the buyer. The fees of the notary usually range from 1 % to 1.5 % of the purchase price. The fees and expenses relating to the due diligence over the title to the property are usually paid by the seller, while the remaining fees are paid by the seller. c) Registration with the Real Estate Registry. The final stage for acquiring property is the registration of the transfer deed with the Real Estate Registry of the jurisdiction where the property is located. Once registered, the buyer’s ownership over the property is enforceable before third parties. Such registration entails certain fees which

are usually comprised in the notarial fees and are also assumed by the buyer. The times involved in the registration of the deed will depend on the relevant jurisdiction, but in average this should take between 1 and 2 months. TAXES. Please find below an outline of the main taxes involved in the sale of real estate property according to the latest tax reform. a) Real Estate Transfer Tax. If the real estate property was acquired before January 1, 2018 (“ the date ”) , individuals tax residents (“ individuals ”) selling real estate property are taxed at 1.5 % tax rate over the price of the sale. This tax is withheld by the notary public. If the real estate property was acquired after the date, individuals are taxed at a 15% tax rate over net income (sale price minus acquisition cost). The transference of any rights over real estate property are also taxed at a 15% tax rate (net income) if such rights were also acquired after the date (this includes the transfer of participations in real estate trusts). b) Corporate Income Tax. Local companies selling real estate must pay CIT over the sale of real estate property at a progressive tax rate over the net income. The current law has changed the fixed tax rate (30%) applicable until fiscal year 2020 for a progressive one, according to the following criteria: a) if the net income of the company does not exceed ARS 5 million (approximately USD 50,000) in the fiscal year, a 25% tax rate applies;


ILN Real Estate Group – Buying and Selling Real Estate Series

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