Buenos Aires Real Estate Consulting on Buying and Selling

Are you considering investing in the captivating landscapes and vibrant culture of Argentina? The good news is that foreigners can indeed purchase real estate in this South American gem. With just an active passport, you can embark on your journey of property ownership in Argentina. However, before you dive in, it's important to understand the intricacies of the local real estate market and legal landscape.

Unlocking Real Estate Opportunities

Argentina offers a wealth of opportunities for foreign real estate investors. Whether you're dreaming of a charming countryside retreat, a sleek urban apartment, the diverse property market has something for everyone. From the bustling streets of Buenos Aires to the serene vineyards of Mendoza, the options are as varied as the country's landscapes.

Untangling Legal Complexities

While the prospect of owning property in Argentina is exciting, the legal process can be a bit complex, especially for those unfamiliar with local regulations. Navigating property rights, ownership titles, and legal documentation requires a keen understanding of Argentinian law. To ensure a smooth experience, enlisting the guidance of legal experts who are well-versed in both real estate and local legislation is paramount.

Breaking Down Language Barriers

One of the challenges that foreign investors might encounter is the language barrier. All legal processes and documents are conducted in Spanish, which can pose difficulties for non-Spanish speakers. To effectively navigate these challenges, it's advisable to assemble a team of professionals who can bridge the language gap and provide accurate translations. By doing so, you'll be better equipped to comprehend the legal requirements and make informed decisions.

Building Your Dream Team

As you embark on your journey to own real estate in Argentina, surrounding yourself with the right professionals can make all the difference. Consider partnering with a reliable local real estate agent who has a deep understanding of the market trends and property values. A seasoned attorney specialized in property law can guide you through the legal intricacies and ensure your interests are protected. Additionally, having a proficient translator by your side can help you communicate effectively and avoid misunderstandings.

Conclusion

While the process of buying real estate in Argentina as a foreigner might have its complexities, it's a venture that can be incredibly rewarding. From the vibrant culture to the breathtaking landscapes, Argentina has much to offer to those who choose to invest in its real estate market. By embracing the guidance of experienced professionals and understanding the legal landscape, you can confidently embark on your path to property ownership and make your Argentine real estate dreams a reality.

Before buying my first apartment in Argentina, I scoured the Internet looking for information. I found conflicting information. I emailed realtors and I got 5 different answers to the same question. I talked to lawyers who also gave different answers to the same question. It was very frustrating.

Before moving to Argentina, I starting researching the laws here. I found that owning property here as a foreigner was very safe. Real estate prices have steadily risen over the years – even during times of economic crises (about every 10 years). Like many others, I knew the currency was going to eventually get devalued. It was inevitable.

Property prices have always been priced in US Dollars so even though the currency devalued, property prices have held up their values. I was here during the crash in 2002. . That was clearly the time to buy. The locals literally couldn’t withdraw their money in their savings and checking accounts for months. There were people that were panic selling their properties to come up with cash. I’ve always been adventurous but I wasn’t THAT adventurous to purchase during that crises. 

Looking back, I wish I did because the property took a tremendous dip in prices and they rebounded fairly quickly.  I figured that was most likely a “once in a lifetime opportunity”.

I started putting ads online and in the paper asking foreigners that purchased property here to email me. I offered to pay them $250 each to fill out a questioneere. I asked them what mistakes they made, how they got cheated, what realtors they used, how they transferred money here and what taxes they were charged. I was amazed at the high percentage of people that got swindled or were given wrong information or charged false taxes or fees.. I spent several thousands of dollars in those surveys but it paid off tremendously for me.

Remember that buying real estate here in Argentina is tremendously different than buying anywhere in the world.  Transactions are 100% in cash, literally paid with u$s dollars over the table.  It sounds primitive and it is truly hard to imagine paying for a property with cash over the table but almost all transactions are conducted this way.  I have purchased tens of millions of dollars of real estate here on behalf of individual investors and only a few of them didn’t involve paying cash over the table.  I have purchased multi-million u$s dollar buildings where the seller demanded the actual cash.  Most people except drug dealers or the Mafia  have never seen that much cash on the table.  I have and it’s quite surreal.

When you purchase property here in Argentina your first step is to get what is called a CDI number. The CDI number is the equivalent to our Social Security number in the USA. It’s a tax ID number that is required to purchase property here in Argentina if you are not a resident. Your lawyer can get it for you (if you pay them)  but I opted to do it myself so I could learn about the process.

Getting your CDI number is a very time consuming process.  You first need to make a photocopy of your passport and go to the local police station. You need to bring your actual passport as well. You tell them you want to apply for a CDI number. You fill out a form and you pay a very small fee. You must give them an address of the hotel or apartment you are staying in. The following day or so, they will send an officer to verify that you are staying there. He/she will give you a paper that you must take to the AFIP office. The AFIP is the equivalent to our IRS office in the USA. It’s the tax authority here in Argentina.

I went to the AFIP office in downtown Buenos Aires and I waited in line 2 hours. Make sure you have 2 photocopies of your passport with you. I didn’t and when I got to the front of the line they told me it was required. I think the employee working there took pity on me and told me to go around the corner and get photocopies made and let me cut back in line. They take both photocopies of your passport and then they give you a paper that is basically your CDI application. They simply handwrite in your CDI number on the paper and then they stamp it with their official AFIP stamp. Voila! You now have a CDI number and can purchase property in Argentina.

If you want to get your CDI # on your own we have outlined the process.  However, if you would like to retain our firm to get this CDI for you, please contact us and we can give you details and costs for our firm to do this for you, saving you valuable time and stress.

Your next step is finding a reputable and knowledgable real estate agent. This is not as easy as you might think. I found that the vast majority of realtors in town don’t have too much experience. In the USA and Europe my experience has been that the realtors are very knowledgable and really “sell” that property to you. They give you all the reasons you should buy the property. Here in Argentina, many realtors don’t know simple answers to simple questions. 

For example: which way does the sun set and rise (so you know how much natural daylight there will be in the apartment)? Why is the seller selling? How long have they lived here? The answer to most simple questions is usually. “I don’t know”.  And in fact, more times than not the realtor has never been to the property and it’s their first time just like you.  And even getting them to schedule a showing can be like pulling teeth.

Also, a MAJOR difference here in Argentina vs. many places around the world is they charge the BUYER a commission to purchase property here. Yes, you heard that right. The standard commission is 4% + VAT taxes (21% on that 4%) of the purchase price.   So if you purchase an apartment for $100,000 then you would pay a realtor’s commission of $4,840 ($4,000 + $840 in taxes as professional service fees have a VAT tax on them).  

I did find a realtor that is truthworthy and I find them honest to deal with. Still, compared to realtors in the USA and Europe they just don’t compare here in Buenos Aires. Also, you will never hear a realtor say, “don’t buy this..it’s priced too high”. Realtors are given a percentage of the purchase price when you buy so it’s in their best interest for you to pay the highest price possible. Not once did my realtor tell me, “Mike – this is overpriced. Let’s offer a lower price”.  I’ve found that many “realtors” don’t have much experience compared to First world countries.  Most that I have seen were secretaries or working in a totally different profession and came to work as a realtor because they could speak English.   Some realtors I talked  to never even owned a property personally or went through the buying process themselves.

Basically, property in Buenos Aires is priced for the most part by the square meter. (1 sq. meter = 10.76 sq. feet). That price per sq. meter will go up or down based on what part of town you are buying, the type of building (new construction vs. older), the floor the apartment is on, view/no view, etc. Mainly though property is priced by the sq. meter. New construction is priced high compared to existing buildings. Property prices also vary depending on the exact location and the condition and quality of the apartment and building and the services and amenities in the building.

It’s a strange process here going around seeing listings. Unless the realtor is the same for the buyer and seller you almost always have your realtor, the seller’s realtor and many times also the owner. I find the system here is very stone-age. No one trusts anyone here. The realtor’s are all very guarded in their listings. It’s very primitive with everyone thinking the other person will screw them over.

Another thing is that each apartment you look at usually has a spec sheet that details the number of sq. meters, the floor, the address, the monthly expenses of the apartment, etc. It also has things like a “luminosity scale” that measures the amount of natural sunlight. Guess what? The seller’s agent is the one filling out that 1 out of 10 rating. What her idea of 10 and a normal person is rarely correct. Also, the number of sq. meters is many times incorrect on these sheets. I have seen over 5,000 apartments now so I can go into an apartment and basically guesstimate within a few meters the actual size of an apartment. Many times the wrong size was listed on a spec sheet. When I called them out on it, they claimed it was a mistake. The number of actual sq. meters is listed on the title to the property. Since property is priced by the sq. meter, it’s important that you have an accurate size.

Ok. So let’s assume you find your dream apartment. What next? You make an offer (reserva). Typically, most properties are priced a bit high so there is room to negotiate. For example, if an owner wants $100,000 — they will try asking for $106,000 to give room to negotiate and get their $100,000. Again, it all comes down to knowing the property prices in each respective part of town. 

You need to place a deposit with your offer. Typically US $1,000 is enough. If it’s a really expensive property they will ask you to put more. I made an offer on a $800,000 house the other day and they wanted a “reserva” of $10,000. I made another offer on a $400,000 house and $5,000 was enough. Keep in mind the seller isn’t getting that money. It’s held in trust by your realtor. It basically shows that you are serious about purchasing the property. Once you make the offer the seller has 3 options. (1) accept your offer; (2) reject your offer or more commonly (3) counter-offer. I usually offer under the asking price unless the asking price is already fairly priced (which is rare here in Argentina).

You usually give the seller a few days to a week to think about it. Your offer (reserva) has an expiration date. They must respond by that expiration date.  If your offer price is too low, the seller’s realtor can refuse to take it to their client.  Also, remember that ethically they are supposed to take the property off the market but many, many, many times I have caught realtors first hand still shopping the apartment after the reserva is accepted.  A good test is you can have a local call the seller’s realtor to see if they are still taking offers on it or willing to show the property.  Many times the realtors are unethical and are still shopping it on the open market.      Also remember that the deal can fall apart until a “boleto” is done which basically locks both sides in.

Once you agree on a purchase price after negotiations you have two options. There is something called a “boleto” which is basically a down payment of the total purchase price. Typically it is 30% of the total purchase price of the property. If the sales transaction is scheduled many months down the road the seller will ask for a “boleto”. The boleto is basically the point of no return for both the buyer and the seller. If the buyer backs out, you lose that 30% down payment. If the seller backs out, not only do they have to return that 30% but they have to double it and return another 30%. 

They do this to prevent an owner from cancelling and accepting a higher offer. The offer has to be  much higher or it wouldn’t make sense. I have never heard of a transaction not taking place once a boleto was in place.  However, I have had several deals where the seller backed out the night before a boleto trying to get more money.  Many sellers and realtors are unethical and will cheat you if they sense you don’t know the process. Also keep in mind a seller can always back out and change their mind until you sign the boleto.

You pay all realtor’s fees at the time of the boleto. The seller is paid and a date is set for the final title deed transfer which is called the “escritura”. The “escritura” is when the title is actually transferred to your name. The legal fee (which I will go into under a separate section titled “Lawyer – Notory Public – “Escribano”) is paid at the time of the “escritura”.

If both parties can close fairly quickly then they will forego the “boleto” and they will go straight to escritura. Typically though, they will ask you to do a “Seña”. A Seña is not a full blown boleto but typically $5,000 to $10,000. It works the same way as the boleto. If you back out as the buyer you lose this money. If the seller backs out they will need to refund your seña and double it.

I still recommend that you use a “seña” to lock in the seller into selling. The last thing you want to happen is a seller to change their mind and lose out on a deal you might have spent a lot of time and money looking for. The sena helps prevent the owner from changing their mind in the form of not only returning your sena but they must return it doubled. If you can avoid the boleto and use a seña that is the best option as the realtor does not have to be paid until at least a boleto is performed. The realtor will help keep things on track as they have a big incentive in the form of their commission.

The process is not easy buying here and it’s an expensive process. You should note there is NO free way to get u$s into the country of Argentina so it’s expensive. You need to pay a fee. I’ll go more into this in the “Money Transfer Fee” section. Keep in mind that virtually ALL property purchases here are in cash. Literally. Wire transfers to the owner are almost non-existent here. The locals do not trust anything but cash.  It is legal to wire directly to the seller if they have an account outside of Argentina AND it is declared and they will allow you to wire it abroad.

Almost every single purchase I have made for myself or my client was in cash with the owner sitting across the table from me at closing counting out the money. Mortgages here are non existent for the most part.  There were a few purchases where the seller allowed my client to wire the funds abroad.  This is the best possible scenario.

The buying process is very different than anywhere in the world.  It does not matter if you are an expert in real estate in other parts of the world. Argentina is another world and so is the real estate buying process here.  Just about every single thing is different here than many places.  Also, remember that even after the process things aren’t as easy as they are in the USA/UK.

When you go to furnish your property you can’t just expect to purchase furniture in a store and have it ready.  Most furniture stores have nothing in stock.  You must order it, pay 50% deposit and then they start making it.  Often times it takes up to 50 days to make the furniture.   There are so many things in Argentina that are different than other parts of the world.

The buying process here is further complicated by sellers or seller’s realtors changing their mind.  I can show so many real life examples where the seller’s realtor ruined a deal.  I had several more purchases where the seller of the property came to me and told me that they didn’t trust their own realtor and we ended up buying the property with the realtor involved both saving 4%.

Another thing that you will often encounter is the seller in many instances will want to record a false lower price on the title deed.  Unfortunately this is a common practice here.  The seller’s want to not only avoid taxes but also they don’t want AFIP snooping into their business on how they got the money in the first place to purchase their property and what they are going to do with the proceeds from the sale.

For many years up until 2018, there was 0% capital gains tax. But declaring a fake lower price is so prevalent, that the government knew they were losing out on transfer taxes so they instituted a 15% capital gains tax when selling.

We always push for “white” (i.e. legal) deals but the truth remains that many sellers refuse to sell their properties unless you record a false lower price.   Also, on many new constructions projects, they refuse to sell the property to you unless you go along with prices as low as 50% of the original prices you are paying.   We advise our clients against this practice.   There are reputable realtor firms that are involved with new construction that are advising their clients to record 50% of the title deed and we strongly advise against going that low.

"Pozo" Investments

Another way to invest in real estate and buy properties at a much lower price is to purchase a "pozo" project.   In Spanish, pozo means hole in the ground.   So here they call new developments, pozo.   You would be buying them before they break ground, when they break ground or during the initial construction stage of the property.  

There are many different payment structures these days from paying the entire purchase upfront for a discounted rate, or you can stagger your payments.   Most developers will have a payment schedule that you can select from.   And don't be afraid to negotiate the payment terms out or prices.  Most will be a little flexible.  

The earlier you buy, the bigger capital appreciation you will achieve because prices have always gone up from ground breaking to completion of the property.   The most important thing you must be aware of is there is a risk that the developer could go bankrupt and run out of money.   We have seen that happen several times.   You must go with an established builder that has done many towers with a track record over 15 years or more.   

Ask them to see other buildings that they have constructed and go see them.  This is especially important if there is no show room.  Most of these projects, they only have enough money to buy the land and they build as they raise money selling off the units.  

Our company has significant experience buying "pozo" properties and has been doing so for over two decades.  Most of these pozo projects have at least a 30% down payment and then the payments can be spread out from 24 up to 48 months depending on how big the project takes.    All payments must be made before you take possession of the property.  

Some buildings will fix their price and payment plan in US dollars.  Some will allow you to pay in pesos but these developers are few and far between these days because of the instability of the Argentine peso.  The ones that do allow you to pay in pesos will use an inflation formula called CAC rate.

Keep in mind most of these developers have an internal brokerage team and the commission you will pay is usually 4% plus IVA tax.  So it's essential to have your own realtor that is able to represent you BEFORE you contact the builder.   This way, you might be able to negotiate for the realtor to share this commission with you.   If you contact the developer directly on your own, most likely you will have to pay the entire 4% realtor's fee.   

For example, you can retain our firm if you want to buy a new construction property and most likely we can negotiate some discount to the purchase price as well as a discount in realtor's fee and we will rebate back part to you.     Most of the developers in Buenos Aires know of our firm and are very open to working with us.   Why?  Because they know that our firm understands the laws for foreigners and there are many steps and processes you need to do in order to purchase "pozo"

Many developers as well as other blogs are confused about pozo properties and they post you can't purchase as a non-resident foreigner.  This is NOT true.   We can help you get your CDI # in order to purchase these pozo projects.   We have a process in place that is streamlined.   If you are not in Buenos Aires, we have Power of Attorney documents we can send to you so we can transact on your behalf.

You can see one example of a pozo investment that our firm made here -  POZO project where we purchased over 25 units in the building.

Keep in mind it's not all rainbows and unicorns on pozo projects.   It's important to note that NO project ever finishes on time.  They are always late.  The higher the building, the later it will be.   Even looking at the example above, the developer was over 1 YEAR late delivering the properties to us.   We knew that going into the project.

Today, some developers are doing unique things like agreeing to pay US$ rent until the project is finished if you pay all the money upfront.  We have recently (August 2023) begin negotiating these deals.  On studio apartments they are paying around $300 US and on 1 bedroom apartments they are paying $500 US dollars per month until the project is delivered.   This is appealing to many investors as they are paying you in cash and the proceeds are tax free as there is no paper trail of this "rental income".

Contact our company to schedule an initial consultation where we can walk you through in detail about Pozo projects.  If you're interested, we can call the developer and in all cases, we've been able to negotiate a discount to the asking price, negotiate better payment terms, and rebate part of the realtor's fee to you.  We have never had a client in 22 years that told us our consulting fees weren't worth it or that we didn't save them time and money.

Although the process is expensive, the property itself is very affordable compared to major world class cities around the world. 

** Please keep in mind this information above pertains to buying real estate in Buenos Aires.  Other cities and areas have different procedures and laws.  Do NOT assume that the laws are the same in each city in Argentina.  For example, in cities like Bariloche, a foreigner cannot purchase real estate without getting a special permit.  That process can take almost forever.  Be aware of the laws and regulations of each city that you are buying in.

When buying or selling your property, you can fully retain our firm to close the deal for you if you're not able to come to Buenos Aires.  Buying a property entails several times when you have to physically be present for the closing.   They do not use Docusign or allow you to close remotely by signing and overnighting closing documents.   You must physically be present both when you buy and when you sell.

If you aren't able to come to Buenos Aires, you can retain us to sign for you.  This will save you thousands upon thousands of dollars in airline flights, hotels, and lost time from work.   

We will be there for you every step of the way.