In the City of Buenos Aires, the Tax Code establishes that the taxable base of the real estate tax is the homogeneous tax valuation that cannot exceed 20% of the market value of the property.
This measure, totally arbitrary and discriminatory, reaches only real estate located in the Autonomous City of Buenos Aires.
The AFIP adopted as a reference for this increase the index used by the Government of Buenos Aires, using as a base the value of the fiscal valuation multiplied by four.
While it can be understood to want to update the base to reduce the existing gap between the tax value and the market value, The truth is that two taxes are charged for the same property: the “real estate tax and the Personal Property Tax”.
Residences used for housing are exempt from this tax, however, when the value of the property declared as housing exceeds 30 million pesos, the personal property tax must be paid with a progressive and distortive rate
By using the fiscal value multiplied by four as a base, the minimum exemption of Personal Assets will be reached more quickly, affecting legal certainty and harming mostly the middle class, which seems to be the most frequent target of government policies.
How much is paid for personal property:
A person who has their home, where they live (with a tax price of $19,642,099 according to the new tax revaluation), two apartments plus Taxed Household Assets in the Personal Assets declaration pays today a total of $3,612,700 .
For not exceeding the non-taxable minimum of Personal Assets ($6,000,000), today it is not subject to paying the tax.
This measure reaches approximately 250,000 city dwellers and more than 7,000 properties.
The floor of 6 million pesos to a solidarity dollar of $187 is equivalent to US$32,085, while the average value of a two-room apartment is US$125,000.-
This is a trap that breaks legal certainty. The pocket of the people is no longer, they must understand, the ruling political class and stop making arbitrary decisions.
The officialization of this arbitrary measure that discourages investment and the generation of employment will have an outlet in the corridors of the CSJN, which will have in its hands the power to declare this new attempt to destroy the Buenos Aires middle class, private investments and that we try to instill the culture of work.
Lawyer Specialist in Labor Law. President of APREA
Source: Ambito
