While not everything is always clear and structured in Argentina, according to our document reviewers and fact-checkers who live there, the legal process of buying property is straightforward. The only documents needed are your passport and your personal Argentine tax number or CDI (Clave de Identificación).
After the sale price has been agreed it takes approximately four to six weeks until the signing of the title deed transfer (called 'escritura').
If you are not willing to stay in Argentina for this time period you can grant a Power of Attorney: letting the deed be signed by a person you trust.
We will give a brief overview of the purchasing process for real estate in Argentina. If you need a more detailed explanation, please check our Argentina Property Pack.
First, you will need an 'escribano'
What is an 'escribano'?
In Argentina, hiring an 'escribano' (notary public) is an essential and legally mandated step when buying property.
‘Escribanos’ in Argentina have broader powers than US notaries public. They play a pivotal role in real estate transactions, ensuring their legality, transparency, and proper documentation.
These highly trained professionals act as impartial intermediaries between buyers and sellers, providing a wide range of services to safeguard the interests of both parties.
We have to give credit where credit is due. It’s mainly thanks to them that owning property in Argentina as a foreigner is very safe. Your property rights enjoy constitutional protection, similar to those of an Argentine citizen.
What do they do?
'Escribanos' in Argentina are not just witnesses but highly specialized legal professionals with a deep understanding of the country's complex legal system, property laws, and regulations.
They are responsible for drafting, reviewing, and certifying the sale and purchase agreements, conducting thorough title searches to confirm property ownership and uncover any potential issues or encumbrances, and ensuring that all the required documentation is in order.
Their involvement helps prevent common pitfalls when buying property in Argentina such as unclear property titles, boundary disputes, outstanding debts, or undisclosed liens from affecting the transaction.
Why should I get one?
Actually, hiring an 'escribano' is legally required in Argentina for important acts of legal and commercial traffic, such as buying property
One of the significant advantages of hiring an 'escribano' is their ability to prevent costly mistakes and protect the interests of both parties.
Here are some things an 'escribano' will do for you:
- they conduct thorough title searches to confirm clear ownership and prevent disputes.
- they check for any unpaid taxes or liens on the property.
- they verify property boundaries to prevent future disputes with neighbors.
- they ensure all required paperwork is complete, accurate, and legally binding.
- they authenticate the identities of all parties and the legality of the transaction.
- they ensure compliance with all Argentine property laws and regulations.
- they accurately calculate and ensure the payment of all associated fees and taxes.
- they act as impartial intermediaries, ensuring transparency throughout the transaction.
- they provide specialized legal advice relevant to property transactions in Argentina.
- they minimize the risk of future legal disputes over the property.
How much does it cost?
The 'escribano''s fee is typically a percentage of the property's purchase price, around 2% of the purchase fee + VAT (21%). So, if you buy a property for $200,000, you will likely give around 4,500$ to your 'escribano'.
While this fee can vary depending on the complexity of the transaction and the location, it is a small price to pay for the security and peace of mind they provide.
There may be some 'escribanos' who advertise lower fees, it's important to be cautious. According to our customers who bought the Argentina Property Pack and gave us feedback on their purchasing experience, many of them tend to tack on additional charges later in the process. These extra costs can include government registration fees, filing fees, fees for Power of Attorney documents, translation fees, and more.
You will pay your 'escribano'’s fees at the final stage, the 'escritura' (transfer of property title).
How to find one?
To find a reliable 'escribano' in Argentina, you can start by asking for recommendations from real estate agents, lawyers, or friends who have gone through similar property transactions.
It's essential to choose a licensed 'escribano' with a good reputation and a history of successful transactions.
When engaging their services, you should provide them with all relevant information about the property and your intentions as a buyer.
Having a clear understanding of your financial situation and any specific requirements you have will help the 'escribano' tailor their services to your needs.
Then, you need to obtain a Clave de Identificación (CDI)
What is it?
When embarking on the journey of purchasing property in Argentina, a critical step is to obtain a CDI number (Clave de Identificación).
In most cases, having this CDI number is sufficient to proceed with your property purchase smoothly.
However, it's important to note that there are exceptions. For instance, in cities like Bariloche, foreign individuals may encounter specific legal requirements that necessitate obtaining a special permit to purchase real estate. The application process for this permit can be quite time-consuming and may require a significant amount of patience.
The CDI number is the equivalent to our Social Security number in the USA or in Europe.
It’s a tax ID number that is required to purchase property here in Argentina if you are not a resident. Your 'escribano' can get it for you (if you pay them).
How to get it?
The 'escribano' can get the CDI for you but, in case you want to do it yourself, here is the process.
To acquire a CDI (Código de Identificación), you must establish your address in Argentina, be it a rented apartment or a friend's residence, by furnishing a 'certificado de domicilio.'
While obtaining your CDI independently is feasible, it can prove to be a somewhat time-intensive endeavor.
First you need a domicile certificate.
To obtain a domicile certificate in Argentina, you need to visit the local police station with a photocopy of your passport and the original, fill out a form, and pay a fee of 15 pesos (approx. $3.5 USD).
A police officer will then visit your temporary residence in Argentina within a day to verify your address, and upon successful verification, you will be provided with a signed domicile certificate.
Then, you must take this document to the AFIP office. AFIP functions as the tax authority in Argentina, akin to the IRS in the United States.
During your visit to the AFIP office, ensure you have two photocopies of your passport. Submit both photocopies, and in return, you will receive a document constituting your CDI application.
The officials will manually inscribe your CDI number on this document and imprint it with the official AFIP stamp.
Congratulations! You are now in possession of a CDI number, which enables you to engage in property transactions in Argentina.
Then, you need to find a reliable real estate agent
Are they all professional?
When navigating the real estate market in Argentina, your initial and crucial step is to find a reputable and knowledgeable real estate agent.
However, this task is not as straightforward as it may seem, as there are notable differences compared to real estate practices in the USA and Europe.
You'll find that the majority of realtors in Argentina may lack extensive experience and expertise. Unlike in the USA and Europe, where realtors often excel at 'selling' a property by providing compelling reasons for purchase, many Argentine realtors may struggle to answer even basic questions.
In contrast to countries with robust regulations, Argentina lacks stringent requirements for operating as a realtor. This means that individuals with varied backgrounds, unrelated to real estate, might transition into this profession simply because they can speak English. Some may not have personal experience with property ownership or the buying process.
It's not uncommon for realtors in Argentina to have never visited the properties they are representing. You, as the prospective buyer, might find that you're viewing a property for the first time alongside a realtor who is doing the same.
Are they all trustworthy?
One significant difference in Argentina's real estate market is that the buyer is charged a commission, which the realtor earns.
The standard commission rate is typically 4% of the purchase price, subject to a 21% VAT tax.
For instance, if you're purchasing an apartment for $200,000, you would be paying a total commission of $9,680 ($8,000 plus $1,680 in taxes as professional service fees are subject to VAT).
Argentinian realtors are generally considered trustworthy and honest to deal with. However, there are important considerations.
Realtors in Argentina may not advise against buying a property even if it's overpriced because their commission is tied to the purchase price. Their incentive is for you to pay the highest possible price, so they may not suggest offering a lower amount.
They will never tell you that something is overpriced.
Buenos Aires lacks a 'comps' (comparables) system, making it challenging for buyers to assess whether a property is reasonably priced. A realtor might inform you that a property is fairly priced, only for you to later discover that you paid significantly more than someone else did for a similar property in the same building.
Everything you need to know is included in our Argentina Property Pack
Then, you make an initial offer (called 'reserva')
What is it?
This initial step involves making an offer to buy the property, commonly known as a ''reserva'.' It marks the beginning of your property acquisition journey.
Typically, most properties are priced a bit high so there is room to negotiate. For example, if an owner wants $200,000 — they will try asking for $210,000 to give room to negotiate and get their $200,000. 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.
If the property you want is above $800,000 house, you might have to make a 'reserva' of $9,000-$10,000.
As a rule of thumb, you can consider that the 'reserva' is around 5-15% of the total price (if the property is expensive, the % is less).
You make your offer, which is usually valid for a week.
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.
During this period the realtor is supposed to take the property off the market and inform the seller of your offer.
The seller can accept, reject or counter-offer.
If the seller rejects your offer, you will get back this cash deposit.
At times, sellers may attempt to negotiate the payment of the stamp tax, which typically amounts to around 4% and varies depending on the province. Ideally, this tax should be split equally between the buyer and the seller. However, the seller might employ a negotiation tactic by requesting the full payment from you.
Then, there is a Purchase Agreement ('Seña' and/or 'Boleto')
What are 'Seña' and 'Boleto'?
Once you've successfully negotiated the purchase price for a property in Argentina, the next steps involve a down payment and a contractual agreement. These steps can take various forms.
In some cases, you'll initially engage in a 'Seña' or pre-purchase agreement, followed by a 'Boleto' or purchase agreement. This sequence is common when the property market is highly competitive, and the seller has multiple interested parties. The Seña is a crucial step that demonstrates your intention to proceed with the transaction.
In less competitive scenarios, a 'Seña' might suffice as the only agreement. This is when a down payment, typically ranging from $5,000 to $10,000, serves as your commitment to the purchase.
Alternatively, you may skip the 'Seña' and directly enter into a 'Boleto' if there isn't too much demand for the property you want to buy. The 'Boleto' is the contractual agreement that solidifies the terms and conditions of the property purchase, specifying the rights and obligations of both the buyer and seller. If you sign a 'Boleto', you have to make a 30% down payment.
Importantly, in Argentina, realtor commissions are typically due only when the 'Boleto' document is signed.
In some cases, neither a 'Seña' nor a 'Boleto' may be required, particularly if the property transaction is straightforward, and both parties are comfortable proceeding without these agreements.
The timing of these agreements is crucial. Typically, the 'Boleto' is executed within two weeks of the seller accepting your offer. However, if a 'Seña' has been made previously, the seller and buyer might choose to skip the 'Boleto' and move directly to the 'escritura', the final title deed transfer.
Opting for a 'Seña' can be advantageous as it helps lock in the seller, preventing them from changing their mind and potentially costing you time and money spent on the deal. If the seller backs out after a 'Seña', they are required not only to refund your down payment but also to double it as compensation.
Your 'escribano' (Notary Public) plays a crucial role during this stage. They will verify the Argentine Central Property Registry to ensure there are no liens, encumbrances, or mortgages on the property, providing additional security for the transaction.
Once the 'Boleto' is completed, the seller receives their payment, and a date is set for the final title deed transfer, known as the 'escritura'.
The Title Deed Transfer ('escritura') and payment
What is the 'escritura'?
Now, the 'escritura' process, which is the formal transfer of property ownership. This legal document officially changes the property's title from the seller's name to yours.
One crucial point to keep in mind is that the legal fee to your 'escribano' (a notary public) is paid at the time of the 'escritura'. It's an important aspect of the property transaction.
How to pay?
When it comes to making the agreed-upon payment for the property, you have some flexibility.
In Argentina, most transactions are conducted using cash, primarily in the form of $100 US bills. This may seem somewhat traditional, but it's the prevailing practice in this country.
Particularly when purchasing property, you typically need to make your payment in US dollars because property prices are consistently quoted in this currency.
However, there's a special situation where cash isn't necessary: when the seller holds a bank account outside Argentina.
Some foreigners who have purchased our Argentina Property Pack have shared their experience where the funds never left the United States. This occurred because the sellers either already had existing accounts in the United States or opened new ones there, enabling the funds to be transferred electronically, making the process highly convenient.
But if your seller doesn't have a US bank account, you'll need to explore alternative methods for making the payment.
You can opt to bring cash or utilize a financial service to obtain the required US dollars in cash, although this may involve a fee.
So, if you're planning a purchase, be prepared to carry a substantial amount of US dollar bills into the country, possibly up to $500,000. However, keep in mind that this process isn't straightforward, and you will likely incur a commission fee.
If you choose to pay with cash, you'll likely encounter machines for counting the money. Additionally, when conducting a cash transaction, you will need to provide an explanation regarding the source of the funds to the AFIP (Federal Public Revenue Administration) through a local accountant. The UIF (Financial Information Unit) will typically inquire from both parties about the origin of the funds.
The stamp tax is typically settled during the closing of the transaction, coinciding with the signing of the official transfer deed and the finalization of all payments. The stamp duty typically amounts to around 4% of the purchase value, although this rate may vary depending on the province.
Normally, both the buyer and seller split this tax equally, sharing it 50:50. The details of this split are usually discussed and agreed upon during the trade negotiations (as mentioned above).
Disclaimer: The information provided in this response is intended for general informational purposes only and should not be construed as legal or financial advice on any subject matter. Property transactions and related legal matters can be complex, and laws and regulations vary by jurisdiction. Therefore, it is imperative that you seek the assistance of a qualified professional, such as a licensed attorney or financial advisor, who can analyze your specific situation, provide personalized advice, and guide you through the necessary legal and financial processes. The author and publisher of this response disclaim all liability for any actions taken or not taken based on the information provided herein. Remember, ensuring that you have accurate and up-to-date advice tailored to your circumstances is crucial in making informed decisions and protecting your interests.