How real estate revaluation can affect the real estate business

The announcement of the migration of the Revenue Agency for real estate valuations in the orbit of the Ministry of Economy, with the aim of updating the value of properties in the area, generates negative expectations in the real estate sector. In general, employers do not see the measure with good eyes because they take it for granted it will negatively affect the market for buying and selling real estate and also for rents which is already quite beaten.

“We understand that he will try to bring the asymmetries between market and fiscal valuation closer together. But we want to wait to see the details of this provision because, without a doubt, a real estate revaluation has an impact on the entire business chain, including rents “warns Mariano García Malbrán, president of the Chamber of Real Estate Services Companies (CAMESI) Precisely, the official objective, as also implemented by Minister Batakis already in the province of Buenos Aires in 2012, is to unify the criteria by which property values ​​are evaluated .

The analyst of the Real Estate Report, the German Gomez Picasso, said that it is “a very sensitive issue, which will generate a lot of discussion”. “Definitely him the impact will be negative in all sectors of the market: from the highest profile investor to the tenant who, if property taxes are raised, will end up having an impact on what they pay in taxes and rent, “he said.

“This is a general tax because it will be paid by the person with the most purchasing power to the one with the least. We must consider carefully how much he will pay because we have been talking about it for years and it could never be done ”, says the analyst. “Furthermore, it is very difficult to re-evaluate each property in the country, because a property located in the same block, in the same block, can have a value of m2 with a difference of 200% and 300%”.

Another market reference adds that “not all properties are undervalued relative to their tax value. Some have a higher value than their real value and others are fine. Therefore, applying the same formula to adjust all of them would not be fair,” he said. . .

However, according to the director of CAMESI, “the time has come to seriously analyze how urban real estate investment affects the taxpayer in taxes as a profit and not in other investments that are the exception. These are inequities that the government is able to assess ”. he pointed.

From the Centro Professionisti Immobiliari (CPI), Marta Liotto explains that the minister has not yet “referred to any specific real estate revaluation decision, so it is premature to express an opinion on how it would affect the market. However, it is important to remember that the premature and unconsulted implementation of The tax changes will certainly generate more complications for the sector “she stressed when asked about the topic.

Liotto added that “to avoid a scenario that nobody wants, from the Professional Real Estate Association of the City of Buenos Aires we make ourselves available to the Minister to provide you with all our knowledge of the sector so that each policy defined takes into account the reality and needs of the market “, He added.

Another impact of the real estate revaluation is expected in the real estate sector. ConstructionAccording to Gomez Picasso. “It will have a very negative impact on the business, which it depends on whether there are investors willing to invest in housing to sell or rent. This will lead to less construction. Therefore, there will be less work, “concluded the analyst.

Another industry representative agrees: “By raising taxes on property owners, what they do is further discourage the industry. In countries like Uruguay, Chile or Bolivia, there is a lot of mortgage credit for the middle class, here you can’t. . And what’s more, it discourages the market. “