Real Estate in Bariloche, Argentina
Navigating the Labyrinth of Bureaucracy
|Kayaker on Lake Nahuel Huapi near Bariloche.
Bariloche, Argentina is one of the last frontiers of decently priced properties, within a land of incredible, untouched, protected natural beauty. The views are intoxicating. A raw landscape beckons the outdoor lover and the bustling city located on the shores of Lake Nahuel Huapi offers a rich culture and international cuisine.
The area of Bariloche is a true paradise. It is a place like no other in the world because of its serenity and national parks. But what does it truly take for a foreigner to own property in the paradise of South America?
Bariloche is within the Zona de Seguridad or secured zone. It is possible to purchase inside this area, but it is difficult to find much data about the process and there is a lot of misinformation floating around in cyberspace. When my husband and I decided that we wanted to move to Bariloche permanently we felt it was in our best interest to do our own homework. We spent months researching this portion of the buying process before taking the leap into owning. In studying the situation, we found that there are certain aspects to the riddle that help in obtaining clearance.
Owning within the Zona de Seguridad, if not an Argentine citizen, can seem to be a labyrinth of a paperwork and bureaucracy. But with the help of Argentine lawyers, companies involved in the process, and submitting the correct paperwork, it is possible.
The Zona de Seguridad was a law that was created back in the late 1800’s because of government concerns regarding the conflicts between Chile and Argentina. It was set up to protect land within 100 kilometers of the Chilean border, the entire length of the country, or another way to look at it, anything west of Ruta 40.The Argentineans wanted to be sure that the land lining their borders was not bought up by foreigners, and, thus, creating a security concern. This law gathered dust until the 1990’s, when major real estate tycoons such as Ted Turner and Douglas Tompkins bought extensive plots of land. Once again, the fear of losing important property to foreigners brought this law back to the forefront.
Currently, with the new Cristina Kirchner administration, the entire cabinet has been changed to new blood. Many people involved in submitting the paperwork and dealing with the process believe that this is a good thing. Our lawyer helping us with the process, Escribania Dalessio who is based out of Buenos Aires, feels that this will eventually help the way in which the law is read. In creating a new Zona de Seguridad cabinet, it is believed that the new department head will be able to help speed up the process, though it is still an unknown at this point. The virtue of patience, which is needed in all facets of life in Argentina, is a true requirement when purchasing within Zona de Seguridad.
The process which can take anywhere from six months to two years, or more, is most easily understood and dealt with by obtaining a professional company to represent the buyer. There are lawyers and notaries that have created a needed business helping foreigners understand what is exactly required to obtain title. For clearance within the Bariloche area the most knowledgeable companies tend to be based out of Buenos Aires. It is extremely important to do the homework on which company would work best for the particular situation and to have the requisite paperwork in order before traveling to Bariloche. The paper trail needed, such as a police report and bank statements, are much easier to obtain while at home, instead of abroad. Also, it is best to start the process as soon as the property is chosen and the down payment has been paid.
The actual paperwork needed depends on each situation. Large plots of land such as ranches and huge agricultural farms, at this time, are slower to move through the process. This is due to more paperwork being needed and being subject to possible environmental studies. Also, a property that has no plans of being improved is not looked favorable upon. But each case needs to show a few details. For example, paperwork from an architect showing plans of improvement or building on the land, clean police reports, as well as displaying that the property is a possible resource of local jobs, will help in the acceptance The bureaucracy likes to see that the buyer is willing to help stimulate the economy. It is important to have these facts in writing and included in the first submission.
Once the property is decided upon, there are four different routes that the foreigner can take. They are as follows:
Fideicomiso: Also referred to as a trust, this is considered to be the safest and most popular of the options out there. The fideicomiso is a corporation or business that is created by Argentines. The trust is set up at the time of putting money down on the property. This is not a way for the foreigner to get around the clearance process, but instead is a way to purchase the property, knowing that they will never be denied ownership of the property because the title is held by the Argentine company. That is not to say that the foreigner is not able to try for clearance on their own while the property is in a trust.
There are reputable companies in Argentina that are set up for this purpose alone. With the fideicomiso, the foreigner is able to purchase the property under the company’s name. There is a special power of attorney (a poder) that explicitly confirms that this is the buyer’s property and that the company has no power over the property without said persons consent. The company, with the owner’s money, is responsible for taxes on the place, as well as paying for any major improvements on the land. In exchange for their services there is a fee, which varies from company to company, but is around US$1500 to US$2000 per year. If the owner of the property decides that they would like to sell the piece before obtaining clearance, they will be subject to the capital gains taxes applicable at the time of sale. Also, any income that may be derived from the property will also be subject to a corporation income tax fee because of being held in a trust.
En Comision: En comision is different than the fideicomiso, in that the buyer has a relationship with an Argentine that they trust. The person purchases the property on the buyer’s behalf, with the buyer’s money. This is all written out in a power of attorney (again, a poder). The poder strictly prohibits the Argentine to sell, rent or do anything with the property. It is also stated that the piece, in case of death of the Argentine native, goes to the foreigner, with this option, the capital gains taxes and corporate income taxes can be avoided. The important point here is that the Argentine is completely trusted, because if clearance is not obtained the property will remain in the name of the said Argentinean. It is extremely important that the buyer move ahead on trying to obtain clearance immediately to show that they are not trying to get around the Zona de Seguridad process.
En Comision #2: The second version of the en comision involves the seller of the property and should only be done if the buyer knows and absolutely trusts the seller. It is the same process as the previously mentioned option. The power of attorney is, basically, the title until clearance is issued. The poder is applicable for ten years. If at the end of ten years an answer has yet to be received, it can be written for another ten years.
Permanent Residence: The fourth option is only applicable to those that plan on living in the country full time and are willing to travel the long road to permanent Argentine residency. According to different companies that we spoke with, after two to five years of permanent residency the buyer of the property is treated as an Argentine citizen. They then go through the regular process that any Argentinean would have to go through to receive clearance.
As stated before, there is a way to work through the bureaucracy madness, if so desired. It just takes patience and an understanding that things do not work the same way as in other countries. When we found our place, with its million dollar view, we knew that we were up to the challenge of jumping through the hoops. For us, it was worth it. Each day that I look out my window and see the sparkling, blue waters of Nahuel Huapi and snow-capped Andes mountains, I know there is no other place on earth where I would rather be.
Update: As of March, 2009, the process for buying in all Zona de Seguridad areas has changed for properties 5,000 square meters or under. Resolución 166-2009 states that properties located within the Zona de Seguridad area are automatically approved for foreign buyers if the property has the following criteria:
- Located in an urban or suburban area
- Less than 5,000 square meters/approximately (1.25 acres of land)
- Not purchased for a business purpose