On June 1, 2026, Decree 406/2026 (the “Decree“) was published in the Official Gazette. Issued by the National Executive Branch, the Decree regulates the amendments introduced by Law No. 27,802 on Labor Modernization to the Income Tax Law, specifically those relating to the rental of residential properties and the sale or transfer of rights over real estate.
What Does the Decree Establish?
The Decree regulates two exemptions incorporated into Article 26 of the Income Tax Law and provides essential guidance for their practical application. Its main provisions are outlined below:
- Definition of “primary residence”: A “primary residence” is defined as a property used exclusively as the sole, family, and permanent dwelling of the person who occupies it. When the exemption applies to deemed rental income, the qualification refers to the taxpayer’s own dwelling; when it applies to a lease or sublease, it refers to the dwelling of the tenant or subtenant.
- Exemption for residential rental income: The exemption on income derived from the lease or sublease of properties used as a primary residence covers all units that the lessor or sublessor — whether an individual or undivided estate — allocates for that purpose, provided the property serves exclusively as the tenant’s or subtenant’s primary residence. The exemption also covers amounts paid for the use of furniture or other accessories or services supplied by the landlord.
- Effective date of the rental exemption: The exemption applies to income accrued from January 1, 2026, regardless of when the lease agreement was executed.
- Properties transferred free of charge: The deemed rental value of properties transferred at no cost or for an unspecified price is also covered by the exemption, to the extent the transferee uses the property as a primary residence.
- Exemption for the sale and transfer of rights over real estate: Individuals and undivided estates are exempt from tax on gains arising from the sale of properties located in Argentina and from the transfer of rights over such properties, provided the transactions fall within the scope of Article 99 of the Tax Law and are completed on or after January 1, 2026. The exemption covers both outright sales and the assignment of purchase agreements or similar commitments, even where possession has not yet been transferred.
- Limitation on the landlord deduction: The rental expense deduction available to tenants does not apply where the landlord or co-owner is an individual or an undivided estate.
Why Does This Matter?
The Decree provides legal certainty regarding the scope of two significant exemptions introduced by the Labor Modernization Law. For landlords renting residential properties, the exemption eliminates the tax burden on such income as of the 2026 fiscal year, regardless of when the lease was signed. For those selling or transferring rights over real estate, the Decree clarifies the conditions for accessing the benefit — which is of particular relevance for transactions currently underway or about to be completed.
Entry into Force
The Decree entered into force on June 1, 2026, the date of its publication in the Official Gazette of the Argentine Republic.
