LivingInPatagonia.com

Process of Buying Real Estate in Patagonia

Written by Jamie  

Whenever a person interested in real estate in Bariloche asks me about the situation, I always explain to them how the title process works. There is a lot of misinformation, rumors, etc about this. The following information is based on ours as well as friend’s actual experiences.

To begin with, a little history. After Ted Turner and Douglas Tompkins purchased large parcels of land in the national parks of Argentina, the government, concerned about foreigners buying up all the good land, over reacted and started to interpret an old “Zona de Seguridad” law differently.

In a nutshell, all foreginers/non Argentine citizens must go through a process to receive approval to have the title put in their name. From what I have heard, permanent residents of 2 years are treated like an Argentine citizen and receive automatic clearance, although I have no confirmation on that. The area that requires Zona Seguridad is roughly within 100km of the Chile border, and as a rule of thumb, anywhere west of Ruta 40. For example, our finca in San Rafael as well as the apartment in Buenos Aires did not require this, but our land in Los Molles (by Las Leñas) did.

The process of receiving clearance can take from at least 6 months to a year or more. In my group of professionals I have asked, only one foreigner has been declined clearance. So, this brings up the question of how can you purchase property in the Zona Seguridad area without recieving title? As with everything in Argentina, es posible pero…

If you decide to buy property here there are three main ways to maneuver around this situation that I am aware of. It is important to decide which of these ways works best for your situation before making the final payment on the property. You begin the actual process of getting clearance after the final payment has been made.

The first option, the safest and most popular is to set up a trust (fideicomiso) with an Argentine company. The idea is to set up a trust where you and the company own the property. There are reputable companies and lawyers that can assist you in this. The fees I have been quoted, and apparently the norm, are around US$2,000 to set up, US$1,000 to maintain each year, and US$2,000 to take out of the trust when you recieve your clearance. The trust administers and pays all the bills, taxes etc., which is nice, especially if the foreign buyer does not plan to live in the country. The negative, besides the price, is all home improvements (more than basic things such as painting, etc.) must be paid out of the trust account. And if you sell the property before it is taken out of the trust, you need to pay capital gains tax on the profits. Normally capital gains tax in Argentina varies from very little to none at all, but that is a topic of another entry.

Option number two is to find an Argentine you trust to buy the property on behalf of you, buying “en comision”. You then sign a special power of attorney that protects you. The POA states that if your Argentine signee were to die you still would receive the title. It also states you have the right to sell the property, even before you receive the clearance.

Option number three is like number two only the title stays in the seller’s name until the clearance is granted. The POA is between the buyer and the seller. Again, the POA protects the buyer against losing the property in any way and allows owner to sell if they choose. Both POA’s have a life span of 10 years and the ability to rewrite the POA for another 10 years.

Those three options all can work to buy the property and then you begin with the process of receiving clearance. I suggest using an escribano, a special lawyer/notary, that has a good track record of assisting foreigners with the process. Even though we bought in Bariloche, we chose an escribano in Buenos Aires. We have learned that most everything in Argentina goes through BA anyways, so why not skip a step? You can expect to give fingerprints and provide documents to receive clearance. We wrote a nice cover letter with our plans.

To sum it up, if a foreigner wants to buy in the “promised land,” they can. There is just some more hoops to jump through. But as we like to say here “¡Vale la pena!” which translates to “it’s worth the effort!”

March 9, 2009 Update

New resolution and information can be found here