New single real estate registry proposed in Argentina
A new single registry for rural properties it to be created in Argentina so that it can be determined who owns what in a move that is likely to make the South American’s country’s real estate sector more transparent.
The new registry will be created as part of a set of new ruled that will also limit the amount of rural land foreign buyers can own, it has been confirmed.
Foreigners are already restricted in what they can buy in the South American country and are unable, for example to buy property along the country’s borders. But the new rules will not affect properties already in foreign hands, officials said.
The proposal in a new bill to be put to Congress is to limit rural land ownership by foreigners to 2,500 acres limit on rural land ownership by foreigners. The bill will also would create a single registry for rural properties to replace the current 23 provincial registries that are not easily searchable.
Officials said that the proposed law is based on strong legal limits on foreign land ownership in Brazil, Canada, the United States and France. For example, foreigners can generally own any amount of rural land in the United States, but purchase or sale of such property of as little as 10 acres by foreigners must be reported to the US Department of Agriculture within 90 days. Violations of the law can result in fines of up to 25% of the property’s value.
In Argentina it is estimated that foreigners own 11% of the country’s 445 million acres (180 million hectares) of productive land, according to the Argentine Agricultural Federation, which has long pushed for limits. The proposed law would limit the total foreign ownership to 20% of the total productive land.
More and more foreign buyers are interested in property in Argentina as it is seen as an emerging property market with huge potential. Brazilians, Americans, Canadians and French buyers are looking for second homes as prices are expected to escalate in the medium term.
Property sales increased by 16% in the first three months of 2011, according to the Argentina Real Estate Chamber. Prices are now around d 20% up on a year ago.
Argentine President Cristina Fernandez stressed that if the proposed national registry shows that more than 20% of productive land is already in foreign hands, the law won’t affect the owners’ property rights.
She added that creating a unified property registry and limiting foreign ownership could provide Argentina’s government with more tools to control industrial agriculture. There have been concerns about the number of global companies buying land.
In the country’s Patagonian desert, for example, the ownership of vast sheep ranches by American and European businessmen, including the family that owns the Benetton clothing line, has led to conflicts with indigenous populations.
In the fertile Pampas grasslands outside Buenos Aires, former ranches that provided inexpensive beef to Argentine households have been converted into huge soy plantations. Companies, many of them under foreign ownership, produced soy last year on more than 44 million acres.
Foreign ownership of water resources has also been controversial. But not all foreign owners are exploiting the land. Douglas Tompkins, founder of the Esprit and North Face clothing lines has preserved swaths of wilderness in Argentina and Chile including land covering part of an important aquifer.
To read more about buying property in Argentina read our special feature in the May edition of Property Wire Confidential magazine: here