Argentina is looking to lift the Foreign Farm Land Law restrictions
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Argentina is looking to update or remove the restrictive Foreign Land Law restrictions that have frozen the Real Estate Market
The new business-friendly Argentine Government is working on draft legislation to make positive changes to the land law, enacted in 2011, which since being introduced has produced severe and ambiguous restrictions on the sale of land to foreigners.
According to Martin Borrelli, the Undersecretary of Registration Affairs of the Ministry of Justice and Human Rights, the body where the National Land Registry is centered, the government is looking to make drastic changes to the current law to make the situation more like that of Brazil which has also removed restrictive laws around foreign land purchases..
“We are studying a modification which is still in a early draft stage. We intend to make changes,” confirmed the national official. Borrelli said he could not anticipate what those changes are yet because we are still working on them.
While another source said that they could move directly to repeal the total law because it is so badly written. “President Macri already okayed this so this could also be done,” said the source, who asked not to be named.
A few weeks earlier, representatives of rural Real Estate Farm Brokers met with officials of the Agricultural Ministry and then with the National Land Registry. There they took their concerns because since the implementation of this law investments by foreigners has stopped, creating severe hardship for sellers.
Under the law, the 15% limit to all ownership or possession of rural land in the national, provincial territories, and departments or municipal was established. By that standard, foreign holders cannot acquire more than 1,000 hectares each, or its equivalent in the core area (defined for Northern Buenos Aires Province, southeast of Córdoba and south of Santa Fe). Meanwhile, buyers of the same nationality can not exceed 30% of the individual regions.
Cristina Kirchner’s government had passed that law in haste and some say in spite, with the assumption to curb all foreign ownership of farm land. However after a census was held checking ownership through the National Registry of Rural Lands, it was found that only 15.8 million hectares were owned by foreigners. Strictly speaking, that is only 5.93% on a total of 267.6 million hectares, including rural, mining and other activities.
In addition, at that time it was also revealed that no province had exceeded the limit on the holdings. Amongst those listed as foreign owners they were in the main, Americans. Owners of that origin were holders of 1.13% of rural land in the country, with a total of 3,042,680.69 hectares, followed by Italians (2.3 million hectares) and in third place, the Spanish (2.1 million hectares), among many other nationalities.
Under the law, foreign holders are prohibited from owning land with major water bodies. For some experts that is too restrictive. Farm Brokers believe that there are 20 million hectares that could be sold to foreigners.
GTSA, who is a major marketer of Argentine Farmland , expects that these law changes will take place within 12 months.
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