Incentives to the construction of residential real estate

The credits for the purchase or construction of residential real estate will be granted by financial entities to individuals who fulfil anyone of these three conditions:

•      to own a plot of land and want to construct on it;

•      to have executed a leasing agreement on the real estate that is the subject of the credit;

•      to have leased a residential real estate for a period equal or higher of eight months and to have paid the respective rents in due order.

The credit must be destined for the purchase or construction of a sole, permanent real estate for family use and in principle, the credit instalments credit should be similar to the rent that buyers are paying. The real estate property may have a maximum surface area of 120 m².

The tax benefit for construction companies is limited to Value Added Tax (VAT). In general, VAT is levied on the difference between: i) the VAT arising from the sales of goods and services (Tax Debit), and ii) the VAT invoiced by the suppliers of goods and services (Tax Credit). If the Tax Credit is higher than the Tax Debit, the difference constitutes a Tax Credit (“IVA Saldo a favor”) which, in principle only can be set off against VAT obligations.

Under this regime, construction companies will be able to set off this Tax Credit against other national taxes, or may request the reimbursement from the Argentine Tax Authority.

Finally, the project provides that construction companies may adopt any legal form and the benefit also covers individuals who develop constructions activities at its own risk.