Recently appointed President Javier Milei has passed a “mega decree” that includes the repealing the land foreign ownership rules
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The Government will remove the rule that in 2011 limited the sale of fields to foreigners. This law is amongst the 200 pages of other modified or removed to fire up Argentina’s economy and remove the damage that 70 years of Peronism have done to one of the world’s most important economies.
These points, among others, are contained in the megadecree of necessity and urgency that the Government will announce. This Wednesday, according to reports, President Javier Milei will present the general outlines of the initiative that will have economic deregulations, reduction of state expenses, and changes in legislative work, for example.
As this media learned, the decree of necessity and urgency will advance on mostly outdated laws in agriculture. There are issues related to viticulture, cotton, the National Institute of Yerba Mate (INYM) reform, and land law.
Regarding this last aspect, in 2011, with Kirchnerism in power, Law 26,737, Protection of the National Domain over the Property, Possession or Tenure of Land, was passed. He limited the amount of land a foreigner could acquire to 1,000 hectares in the core zone, and then the different provinces drew up their own equivalences.
At that time, the excuse for passing the law was that the country had a significant territory in foreign hands. It was stated that they could not have more than 15% of the country’s rural lands. However, later, the data reflected something else: that the “foreigned” surface was, with 16,253,279 hectares, 6.09%. That is, over a total rural area of 266,707,361 hectares. By 2020, the level of foreignization had fallen to 5%.
Due to this law, an active rural real estate market began to lose its shine and the values of the farms in the best agricultural areas of Argentina, such as in the north of Buenos Aires, began to detach from the prices of the United States. Amid this law plus the exchange rate, while prices stagnated in the US, they continued to rise and even more than double.
It is worth remembering that in 2016, the government of Mauricio Macri made the land law more flexible with a regulatory decree, although maintaining the requirement of a limit of 1,000 hectares for a foreigner who wanted to buy in the country. Acquired rights were recognized so that a foreigner who already had fields could sell and buy back without the limits of 1000 hectares.
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