Looking to invest in a nice apartment in Buenos Aires? You may have already contacted a few agents and viewed numerous properties online, but you still need to know the proper procedure for purchasing real estate. This means understanding how the process works, obtaining the proper documents to purchase an apartment, and knowing the costs you should expect in the process.
These issues take on a greater importance if you are a foreigner looking to buy real estate in BA.
Currently, the real estate market is very solid and has been for some time.
1) Find the property you want
Before searching for an apartment, it is important to have a specific price you are willing to invest. Often foreign buyers are not aware of market prices. Searching through listings provides a simple introduction to average prices. In Buenos Aires the most common way to compare apartment price is by the cost per square meter. For popular neighborhoods such as Belgrano, Palermo, Las Cañitas, or Recoleta price per square meter usually ranges from 2,200 to 3,000 USD.
Other factors to consider include the size and number of bedrooms you’d desire. But don’t forget that age-old adage: when buying real estate the three most important things to consider are Location, Location, Location!
2) Put down a reservation or down payment
In order to make an offer on a property or reserve it at its original price, a good faith deposit is required. This may range anywhere from 2,000 USD to 1 or 2% of the property’s value. After making an offer, you’ll have to wait for the seller’s return offer. If an offer is accepted, the initial good faith deposit will be held as a down payment; however, if an agreement is not reached, then this deposit is returned.
3) Getting your Tax Identification Number (CDI)
Argentine tax law requires the obtainment of a tax identification number in order to own property. This is called your CDI.
In order to receive a CDI you must first possess an address certificate. To obtain an address certificate, use the address of the hotel you are staying at, the apartment you are renting, or a friend’s address. Then, visit the police station that corresponds with the address you are using and bring your passport. At the police station, request the address certificate. It will cost 10 pesos and be sent in the mail within the next 24 to 48 hours.
Once you have received your address certificate, make two copies of your passport and visit the AFIP (Tax Agency) that corresponds with the address you used for the address certificate. If you are unsure about where to find the corresponding AFIP ask a policeman or visit www.afip.gov.ar.
In case you are unable to come to Argentina to complete this, your other option is to grant power of attorney to a lawyer, and he or she will take care of everything for you.
4) Signing a Boleto de Compraventa and/or Escritura (Deed)
At this point in the process, you will need to hire an escribano (notary) or lawyer to assist you on your purchase.
Signing a Boleto differs from signing the final deed, as it will not be registered in the real estate national registry. The Boleto represents an initial stage of commitment between the buying and selling parties and necessitates that the seller give the title deed to the buyer and that the buyer pay the owed money to the seller.
The Boleto grants the buyer many rights, including the ability for the buyer to use, rent or sell the property. However, the title deed must be signed before a notary to give full rights and ownership to the buyer.
5) Agent’s Commission
In Buenos Aires the buyer pays 4% commission to the real estate agent. Yes, the BUYER pays commission. Often, when interested buyers learn this they decide to go without an agent in order to avoid this fee. This is INCORRECT! Regardless of whether you use an agent or not, you be required to pay a 4% commission. Either this money will be split between the buying and selling agents, or if you go it alone, you will be paying the selling agent the full 4% and hoping he or she will do everything properly.
If you do not use an agent, you will have to locate your own escribano, lawyer and accountant to aid in the buying process. In other words, if you don’t hire an agent you will be putting your investment at risk for no reason!
While the buying process works smoothly with the aid of a professional, it is still best to be well informed about the necessary steps towards ownership. Please consult this guide to help you, but of course in the end you are the one who makes the final call.
Please let us know if you desire more information. We’d be more than happy to become your real estate agent should you choose to invest in a Buenos Aires property! Check out our listings of brand new apartments and off plan developments!