Government seeks new properties up to $ 113,000 to lower price

While other sectors of the economy add to the tax burden or are even hit by new taxes, developers who build homes
up to 140,000 UVA (equivalent to 113,000 USD) will not pay 10.5% VAT, a decline which, according to the manufacturers themselves, will then be transferred to prices. With this measure, the government seeks to promote the construction of units for the people who buy them as first home.

The benefit is already included in Articles 96, 97, 98 and 99 of the 2019 Finance Act, but exempts the regulations of the

AFIP

this will define how it will work. The industry's discussion with the government is whether this benefit will be paid – as it happens in the renewable energy sector – or whether the manufacturers will have to pay it and then it will be paid back.

The exemption will apply to projects launched on or after January 1, or those whose progress does not exceed 25%, and which still expires in December 2022. In addition, the exemption will not apply to projects that have been completed. exemption will not be unlimited. : will manage up to 60,000 homes nationwide, with a maximum limit of 3,000 homes for those created before 2019.

Consulted by
THE NATION, the housing secretary,
Iván Kerr, explained that the scheme would be similar to the RenovAr, which would benefit renewable energy projects, and that it was to encourage the private developer to focus on building for the sectors intermediate.

"This was a very much requested measure by the sector because the tax issue would not be a matter of this type of ministries, and if you also add the provinces by establishing stamp duty exemptions, the gross income would speak a big boost, like what is promoted in Colombia or Chile for a while, "said the official, adding," Uruguay has a law on social housing according to which builders who build dwellings in specific areas of Montevideo benefit from a total exemption from VAT and property tax ".

"The exemption will make housing more accessible and stimulate the construction of new projects for the middle or lower clbad," said Damián Tabakman, president of the Chamber of Entrepreneurs for Urban Development (CEDU), who was working in settlements with Kerr and Miguel Camps, president of the Association of Housing Entrepreneurs (AEV).

According to Tabakman, completed projects will not be limited geographically, nor will they stipulate a number of environments, but the only restriction is price. On the other hand, consulted on the question of whether a building can contain this type of housing and other more expensive and continue to benefit from the exemption of the corresponding units, replied in the affirmative, although the The regulation sets the minimum proportions so that it is not just a department of a building, but there will be a relationship to respect.

The government's initiative could also encourage developers who sourced land in accessible neighborhoods, by reflecting on the demand they had purchased with UVA credit prior to the devaluation, to be encouraged to start projects.

"This is a positive signal for the sector, we are privileged and we appreciate it, although it is not generic for any kind of development, it is a measure that needs to be supported because the government is working hard to achieve the zero deficit, "said Tabakman. , although he admitted that the proposed measure would in no way generate the boom that UVA credits had made.

The promoter Gonzalo Monarca, president of the group of the same name and one of the largest land purchased in accessible neighborhoods banking on the credit market, gives concrete examples of the effect of the measure. "The properties that will cost up to 140,000 UVA will decrease by 10% because we will transfer the profits," he said, adding that small apartment deals would rise from $ 60,000 in neighborhoods like La Boca at USD 80,000 in areas like Belgrano. In his calculations, he estimates that with a construction cost of $ 1,300 per square meter and considering the impact of the land, it could generate units from $ 2,100 per square meter. In other words, a unit of 40 square meters above the minimum of 23 meters allowing the new building code of the city of Buenos Aires could be sold at a price of 84 000 USD. A level that would also allow more buyers to access financing. "Another good news is that rates are going down," added Monarca.

Finally, Camps, AEV, said the exemptions could also be used indoors. "There is a question with the costs of the land, the opportunity is generated in the interior, where there may be a demand with a greater purchasing power." It is necessary to calibrate where the conditions exist so that the credit amounts and payments I think it's a good product for the cities of the interior, "he said.

Incentive for new projects

• 140,000 – UVA: That's the limit of the VAT exemption, equivalent to around $ 113,000. The idea is to encourage the construction of "social housing"
• -10% – Low price: The non-payment of 10.5% VAT would be transferred directly to the prices. They want provinces to do the same with raw income and seals
• $ 60,000: With the exemption, it is possible to build smaller apartments, about 60 000 USD, although the final value depends a lot on the neighborhood.

The official and sectoral vision

• Iván Kerr – Housing Secretary: "If the provinces were added with stamp duty exemptions and gross receipts, we would talk about a big boost"
• Gonzalo Monarca – Developer: "It will be possible to make apartments from 60 000 USD, although it depends on the place.Without exemption, we would talk about about 10% more values"
• Damián Tabakman – President of the CEDU: "This is a positive signal for the sector, at least in this segment where taxes are low, we are privileged and we appreciate it"
• Miguel Camps – President of the AEV: "You have to see what niche you can face, what public has this buying power, it seems like a good product for the cities of the interior"