New Tax Rules Affecting Argentine Real Estate Investments

The Milei Administration has again signaled resolve to stimulate real estate investment. This time, the president has issued Executive Order 406/2026 to clarify recent congressional amendments to the National Income Tax Law applicable to the lease, sale, and disposition of real property. Most importantly, the executive order resets income tax exemptions legislated under Law No. 27,802, §192. The following paragraphs summarize the real estate transactions exempted by Executive Order 406 with effect as of January 1, 2026.

Rent from residential real property used as a primary residence by the occupant is now exempt from federal income tax. There is no limit on the number of properties held and each of them meeting the primary residence requirement is exempt. In addition to rent, the owner can claim the exemption over income from the lease of furniture, fixtures and services appurtenant to the property.

The exemption does not apply to commercial or short-term rentals (e.g., Airbnb).  The exemption applies only to natural persons and “undivided estates” (property held in common) but not to property owned by a legal entity.  Look for this aspect to be litigated in the future.

• Rental income qualifying for the exemption continues to be exempt from the other major federal tax, VAT. Nonetheless, gross sales taxes (GST), a provincial tax, may continue to apply to rental income, depending on the jurisdiction. Some jurisdictions, like the City of Buenos Aires, provide tax benefits for residential leases, granting exemptions for up to two residential units, provided rental income does not exceed a statutory threshold AR$ 1,101,000 per month for FY 2026.

The executive order also exempts income earned by natural persons and undivided estates from the sale of real property (or rights thereto). Both transactions were previously subject to a 15% tax rate. The exemption applies equally to residents and non-residents, so long as the underlying real property is not used for business.

The foregoing exemption does not apply to:

• Real property sales by persons routinely engaged in the purchase and sale of real estate.
• Legal entities.

The executive order consolidates the federal tax stimulus for the residential real estate. While we expect administrative and judicial litigation to iron out certain technical aspects, the Milei Administration has sent a clear signal to the marketplace of a desire to jumpstart a traditional aspect of the Argentine economy. Exempting income from residential leases and sales should prove an attractive incentive for both domestic and foreign investors. The challenge remains whether the tax relief will lead to the much-desired increase in the supply of housing.