The Property Banks Buyers Guide to Argentina
Registration Requirements:
Procedure 1*.
Seller must obtain a domain certificate
and a personal inhibition certificate from the Real Property
Registry
Time to complete: 14 days (regular errant) or 2 days (urgent errand)
Cost to complete: Domain Certificate: ARS 42 (regular errant) or ARS
72 (urgent errant) Personal Inhibition Certificate: ARS 37 (regular
errant) or ARS 67 (urgent errant)
Comments: The domain certificate sets forth that the property is
free and clear of liens and or encumbrances The personal inhibition
certificate sets forth that there is no judicial order restraining
the seller from disposing his assets.
The domain certificate automatically blocks the property for a
period of 25 to 30 calendar days (depending on whether the public
notary is registered or not in the Province of Buenos Aires) during
which no lean on the property or transfer of the property may be
registered Fees are usually paid by the seller (but it is negotiable
between buyer and seller)
Procedure 2*.
A surveyor measures and values the property
Time to complete: 14 days
Cost to complete: ARS 300 (paid by seller)
Comments: In order to execute the public deed with the intervention
of a notary public, it will be needed to obtain a certificate issued
by a surveyor describing measures, boundaries, and tax appraisal of
the tract of land and buildings. A surveyor, then, must go to the
property and take the appropriate measures.
Procedure 3*
Obtain a certificate issued by a surveyor describing measures,
boundaries, and tax appraisal of the tract of land and buildings
(may not be necessary)
Time to complete: 1 day
Cost to complete: Already paid in Procedure 2
Comments: This certificate issued by the surveyor, is needed for the
execution of the public deed, is given to the seller. It is not
necessary to get new certificates for each transference since they
are valid for all transactions executed before their expiration date
(1 year since issuance in the case of land and 2 years in the case
of buildings). However, it is included as another procedure because
it is most probable that a new surveyor certificate will be
required.
Procedure 4.
The public deed is executed by the parties with the intervention of
a notary public
Time to complete: 14-28 days
Cost to complete: Notary public fees: 1-1.5% of the purchase price
(usually paid by buyer) Stamp Tax: 4 % of the purchase price
(usually paid jointly) Transfer Tax: 3% of the purchase price (paid
by seller) (1.5% if the seller is a person rather than a company)
Comments: The public deed is the only document which is mandatory by
law to transfer title to a property. As possession is required
together with the title (public deed) to acquire real property,
prior or upon the execution of the public deed the buyer must be put
in actual possession of the property. Transactions subject to
Capital Gains Tax are not subject to Transfer Tax (this is the case
when companies are parties to the transaction).
Capital Gains Tax is paid by the seller. However, this tax is not
applicable if the money collected by seller for the transfer of
property is used to buy another property within a year of the sale
or for the construction of a new property. In this last case, for
the tax waiver to apply, the construction has to start a year after
or a year before the transaction and it has to be completed 4 years
after the date of the transaction.
The notary will retain the 3% for the transfer tax, but if the
transaction is subject to Capital Gains Tax (CGT), he will use this
amount to pay the CGT. It is most likely that for mid-size and large
companies a broker participates in the transaction If the
transaction has been arranged through a broker, his fees will be
about 3% of the purchase price
Documentation shall include: - Domain Certificate (obtained in
Procedure 1)
- Personal Inhibition Certificate (obtained in Procedure 2)
- Certificate issued by a surveyor describing measures, boundaries,
and tax appraisal of the tract of land and buildings (obtained in
Procedure 3)
- Receipt of payment of all taxes and utilities related to the
property, or affidavit issued by the pertinent authority or public
utility certifying that there is no debt
- Tax ID for each party (CUIT/CUIL/CDI)
- Powers of attorney or pertinent company’s resolution approving
the transaction and empowering the signing parties.
Procedure 5.
After the execution of the public deed, the notary public files the
property transfer for registration with the Real Property Register
Time to complete: 28 days (regular errant) or 7 days (urgent errant)
Cost to complete: ARS 42 (regular errant) or ARS 84 (urgent errant)
Comments: Upon registration, the buyer will have perfect and
complete title to the property. The registration fees are usually
paid by the buyer. Additional Comments It is a common business
practice that after the seller and the buyer have agreed on the
price, the buyer makes a symbolic down-payment (earnest money) in
assurance of his earnest and good faith and the seller signs a
document (reservation of property) trough which he agrees on the
price and undertakes the obligation not to further offer the
property to third parties.
If the buyer decides not to complete the transaction without a
reasonable justification, the seller is entitled to keep the earnest
money as indemnification. On the other hand, if it is the seller who
decides not to complete the transaction without a reasonable
justification, he shall refund the earnest money and pay an equal
amount as indemnification.
While the notary public prepares the material for the granting of
the public deed, both parties are usually willing to secure the
transaction and establish all the terms and conditions on the
purchase. It is also common practice that the parties enter into a
binding purchase agreement. The purchase agreement does not transfer
title to the property, but it is enforceable and it provides legal
remedies for the parties in case one of them defaults on one of his
obligations.
It is customary that the buyer makes a significant down payment
(approximately 25%) upon execution of the purchase agreement. Medium
size and large companies tend to engage their legal counsel in these
processes. It is likely that the parties will retain a public notary
in order to certify the signatures of the parties.