Money Laundering as a Boost for the Struggling Real Estate Market in Argentina

After the approval of the Law of Bases and the fiscal package, real estate companies are asking the Executive Branch to consider incorporating into the regulation the possibility of money laundering funds being used to purchase used properties. The Argentine Real Estate Chamber (CIA) formally sent a note to President Javier Milei and Minister Luis Caputo requesting that the purchase of used properties be exempt from the 5% rate outlined in the legislation.

The asset regularization regime exempts those declaring up to US$ 100,000 from fines, while larger amounts face progressive aliquots ranging from 5% to 15%. However, some real estate companies believe that money laundering, along with the return of mortgage credit, could help reactivate the struggling sector. Recent data showed a significant increase in property sales in May, and mortgage loans have also shown positive growth. The sector sees money laundering as a potential boost for recovery.

Real estate agents believe that money laundering could help stimulate growth in the sector by attracting more buyers who may otherwise be deterred by high taxes on purchases. Additionally, they argue that allowing for specific destinations of money laundering to be exempt from taxes could encourage more investors to participate in the market.

The president of the CIA, Ivan Ginevra, explained that while there is no specific provision for real estate investments in this case, it is possible to allocate funds from the Asset Regularization Regime to investments in used properties and exempt them from established aliquots. He believes that this would provide an additional boost for recovery efforts in the sector.

In conclusion, while some real estate companies are focusing on ways to attract buyers through tax incentives like money laundering exemptions, others are also looking at ways to stimulate growth through increased access to mortgage credit and investment opportunities.

Overall, it remains unclear whether or not money laundering exemptions will become a reality for real estate purchases in Argentina. However, it is clear that many stakeholders are focused on finding solutions