On 12 March 2021, Law N° 27.613 (“the Law”) was published in the Official Gazette, enacted by Decree N° 151/2021, which seeks to promote the development or investment in real estate projects through tax incentives and tax benefits, which will be in force for 120 days.
“Real estate projects” shall be understood as new private works that are initiated after the entry into force of the Law and that, in accordance with the building codes or similar provisions, are subject to a report authorisation or approval by the competent authority.
The regime applies to new private works such as constructions, extensions and installations, among others. It includes those that at the date of entry into force of this law have a degree of progress of less than fifty percent (50%) of the completion of the work.
Main incentives:
- Exemption from wealth tax for a maximum of two tax periods the value of investments in the construction of new private works carried out until 31 December 2022.
- The equivalent of 1% of the value of investments in real estate projects may be computed as a payment on account of personal property tax.
- Owners of real estate or rights over real estate will enjoy the deferral of the payment of the Real Estate Transfer Tax for Individuals and Undivided Estates or Income Tax, as applicable.
Tax Amnesty for holdings in domestic and foreign currency for construction investments:
- Individuals, undivided estates and the subjects established in Article 53 of the Income Tax Law, resident in the Argentine Republic, may voluntarily declare before the Tax Authorities holdings of foreign currency and/or national currency in the country and abroad.
- The deadline for adherence will be 120 days after the publication of the rule and its regulation.
- Holdings of foreign currency or national currency in the country and abroad, which is externalised under the terms of this regime, is that which has not been declared at the date of entry into force of this law, according to the procedure established for that purpose by the Federal Administration of Public Revenues.
- The funds declared must be used only for the development of or investment in the real estate projects detailed above.
- A special tax is established to be determined on the value of the holding declared, expressed in national currency at the time of payment into a special account, in accordance with the following rates:
- Deposited from 12/03/2021 and until the term of sixty (60) days running from that date has elapsed, five percent (5%);
- Deposited from the day following the expiration of the term of paragraph a) and until the term of thirty (30) calendar days has elapsed, both dates inclusive: ten percent (10%);
- Entered from the day following the expiration of the term of subparagraph b) and up to the expiration of thirty (30) calendar days, both dates inclusive: twenty percent (20%).
Subjects who make the voluntary declaration of foreign currency and/or national currency shall not be obliged to inform the Federal Administration of Public Revenue of the date of purchase of the holdings or the origin of the funds with which they were acquired, and shall enjoy the following benefits for the amounts declared:
- They shall not be subject to the presumption of unjustified increases in assets for ex officio determinations, with respect to externalised holdings;
- They shall be released from any civil, commercial, criminal tax, criminal exchange, criminal customs and administrative offences that may apply;
- They shall be exempt from the payment of any taxes they may have omitted to declare.
Consolidation of public works for social housing:
- For the purpose of reactivating paralysed or abandoned works in construction processes with contributions from the national government, it is provided that the percentage of real physical progress and building aptitude shall constitute the basis for determining the balance pending financing for the completion of the same.
- Jurisdictions shall prove in an unquestionable way the percentage of real physical progress and building aptitude of the paralysed or abandoned works, by means of technical reports issued, as a sworn statement, by professionals with competence in the matter.
- The national executive branch, through the Ministry of Territorial Development and Habitat of the Nation, will be the application authority and will determine the requirements that the jurisdictions and executing entities will have to fulfil to access the consolidation mechanism mentioned above.
The Argentine Chamber of Construction (CAMARCO) affirmed that the sanctioned norm “will serve to promote the development of the sector, recover lost jobs and achieve a greater supply of housing”.
