Construction is always business. A low-profit business that pays off in the medium and long term, but is extremely safe. These characteristics are what make the “brick” the classic haven of conservative savers. And there are thousands of conservative savers.
Let’s add to the advantages of this activity that under conditions such as the current ones, after a strong devaluation, the construction costs measured in dollars they are cheap compared to those of other times. Less dollars make more square meters that in the end they are sold in dollars, at real estate value, at a price that almost does not vary over time (when it does not, it increases). But who are the potential investors in new real estate developments today in Argentina? Individuals and companies that obtain dividends in pesos and, when converting them to square meters of construction, convert them into dollars in the future.
These are the first interested in investing in works in the well because, in addition to dollarizing their assets, they enter with values at cost and, in the course of the work, they have the opportunity to sell their participation making an interesting profit and, above all, fast. Faster than waiting for the building to be completed. This extra benefit it can happen because they entered cheaply or because the future sale value increased.
In addition, last month, the National Congress approved a law that promotes money laundering destined to new private works and the deferral in the payment of taxes. Laundering consists in that individuals and companies that declare the possession of money in the country or abroad and invest it in construction, pay only a special tax that ranges from 5 to 20% depending on when they make their declaration to the two months following the effective enactment of the law.
Regarding tax exemptions, in the case of Personal Assets, individuals may compute a percentage of investment in works in the well as payment on account of this tax.
In addition, the norm enables the deferral of the payment of the tax on Real Estate Transfers of Individuals and the income tax in the case of legal persons. The law also mentions the release of the payment of taxes on Profits, VAT, Profits from Undocumented Departures and Bank Debits and Credits, among others. This standard encourages investments in the well and increases the reasons for more stakeholders to join the construction business.
What does not exist in Argentina today is the final buyer, which is made of an apartment to live in it. That is why the real estate market is stopped, ironed, dead. There are no credits and if there were, the salary would not be enough to pay them, there are no expectations of immediate economic improvement and nobody wants to move a dollar if they saved them or if they will receive them at some point.
All because he thinks that another major devaluation may still ensue. This is called expectations. And expectations like that are not good for today’s real estate market, but they are good for construction and the real estate market of tomorrow. A tomorrow of greater stability and with rising sales prices.
The question is whether only investors interested in dollarizing their earnings or saving on bricks are enough to keep construction activity toned and upward. And the answer is yes, of course, as demonstrated by the enormous number of empty apartments that exist in the city of Buenos Aires. They are the safeguard of value for hundreds of investors who cannot find something more reliable than having empty square meters, even though converting them into dollars is relatively difficult today with a semi-paralyzed real estate market.
Is there a better scenario for the construction industry? Of course, that of an active real estate market, with mortgage loans in a condition to be paid by the average salary of the economy and with low construction costs due to increased productivity. That would be a dream panorama, a landscape of a healthy, boiling, abundant and growing market.
You may or may not be in the business world of real estate investment, but the reactivating capacity of construction for the entire economy and, above all, for employment is legendary.
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