The hidden tax slowing down new Argentine apartments

An "invisible tax" is significantly impacting Argentina's real estate development sector, eroding profitability for new projects. This "time tax," stemming from administrative delays, is as detrimental as formal taxes but is not codified in any law.

While discussions on real estate costs typically focus on land, construction, and sales prices, the crucial variable of immobilized capital during the lengthy administrative process is often overlooked. In Buenos Aires and its province, these silent delays are inflating project costs and deterring investment.

Federico Sturzenegger's deregulation agenda offers a new perspective, aiming not for a lack of oversight but for increased productivity. The goal is to eliminate redundancies, shorten timelines, digitize procedures, ensure public decisions are traceable, and assign responsibility more effectively.

The private construction industry relies on private capital, savings, investors, and banks, not state budgets. When the state delays permits, it halts decided investments, blocks land purchases, invalidates paid fees, and jeopardizes commitments. Capital is already invested but remains idle.

Bottlenecks occur at multiple stages: obtaining permits can take months longer than reasonable, especially in Buenos Aires Province where municipal and provincial agencies create complex, lengthy processes. Public utility approvals for water, electricity, gas, and sewage often have expiration dates designed for ideal scenarios, forcing developers to restart applications for services that are already approved. Finally, even after a building is complete and occupied, delays in final work permits, subdivisions, registrations, and deeds limit buyers' access to mortgage credit and postpone developers' capital recovery.