New “Lease Law” Now in Force

Law 27737 was passed and became effective on October 18, 2023, introducing tax exemptions that apply to the current 2023 fiscal year. This new law amends the legal regime for real estate lease agreements, especially certain aspects that had been modified or introduced through Law

 27551 (the “Lease Law”). Law 27737 also introduces certain incentives to encourage the supply of real estate for leasing with housing purposes.

The Chamber of Deputies had approved the bill, but the Senate amended it. The Chamber of Deputies finally passed it with the amendments, after holding a vote of 128 yeas and 114 nays.

The relevant modifications are:

• Parties can agree on the duration of lease agreements for housing, but it cannot be less than six months. In the former law, the price could only be modified yearly.
• Prices must be adjusted using a new coefficient “composed of the smallest variation resulting from comparing the average of the 0.9 variation of the Wage Variation Coefficient, published by National Institute of Statistic and Census, and the variation of the Reference Stabilization Coefficient, published by the Argentine Central Bank.” In the former law, indexes were composed of equal parts of the Consumer Price Index (IPC) and Average Taxable Remuneration of Stable Workers (RIPTE).
• The price of lease agreements for housing can only be fixed in “local currency”. Lease advertisements must also be in local currency.
• The lessee holding the property can no longer waive the minimum term of 3 years.
• The derogation of the statutory minimum term of furnished room leasing for any "temporary" purpose was extended. Under the former law, the derogation was limited to tourism, leisure, or "similar" purposes.
• Tenants can terminate lease agreements for housing without paying compensations—although with proper notice—after the first three months of the agreement. Under the former law, this term was interpreted to be six months.
• The Executive Branch must periodically disclose and publish the statistics about the situation of rental housing (demand and number of rented homes) and of the social renting program (demand, beneficiaries, and measures taken).

The new law also includes tax exemptions for real estate lessors who duly registered their contracts before the Argentine Tax Authority (AFIP):

a) Less lessors will be excluded from the small taxpayer’s simplified scheme (monotributo) for those who rent more than one “operational unit” and some will be exempted from paying monotributo for revenues of up to two real estate leases.

b) Lessors will be exempted from the personal assets tax for those real estates leased for housing, up to a certain amount.

c) There will be an exemption of debits and credits tax for those bank accounts “used exclusively” for operations regarding housing leases.

d) There will be a new income tax deduction—both for lessors and lessees—of 10% of the total annual amount of the rental of real estate for housing. This deduction is added to those already in force.
 

Finally, the new law invites the provinces and the City of Buenos Aires to pass other tax benefits for real estate leased for housing