Milei asked to repeal the Rental Law to make way for free contracts “between parties”

Doubts about the future of the post-ballot real estate market PHOTO NA: MARIANO SANCHEZ zzzz
Doubts about the future of the post-ballot real estate market PHOTO NA: MARIANO SANCHEZ zzzz

The elected president Javier Miley gave details this Monday of what would be some of its first measures linked to the economy and one of them was the intention to repeal the Rental Law current. The reference of Freedom Advances (LLA) assured that contracts will be agreed freely and in any currency.

In his first statements after winning the runoff This Sunday, Milei told Radio Miter that the current regulations governing more than 8 million tenants must be “repealed and understood that it is a contract between parties.”

For the libertarian economist “The only thing the Rental Law has done is cause damage. He ended up harming those he intended to protect.” On the other hand, the new president-elect highlighted his commitment to ensuring that contracts can be agreed in any currency: “The monetary freedom It is part of the things we want to advance.”

Milei ratified his intention to repeal the Rental Law.  EFE/ Juan Ignacio Roncoroni
Milei ratified his intention to repeal the Rental Law. EFE/ Juan Ignacio Roncoroni

Specifically, Milei proposes that the agreements be made within the Civil and Commercial Code current, since contracts, commercial life, people, the general theory of obligations, the law of damages and the general theory of liability in the country are regulated there.

The regulations, which functioned as a reform of those sanctioned in June 2020 during the pandemic, were approved in October by the Chamber of Deputies and came into effect in the middle of last month. Contracts from that date are covered by the new law.

Among the changes that were proposed, and although The contracts will continue to be three yearsthe update will be done through the Own House coefficient instead of Lease Contract Index (ICL) of the Central Bank of the Argentine Republic (BCRA). In addition, contractual increases will be semiannual and publications in dollars will be prohibited (agreements between the parties must be exclusively in national currency).

The Casa Propia formula is based on the lowest indicator between the average annual salary variation and the average inflation during the same period. Furthermore, it incorporates a Salary Variation Coefficient (CVS) with a capacity of 0.9, which means that only 90% of the average salary variation is taken.

This focus on the average of the last twelve months in salary variation promotes stability in rent updates, reducing the impact of isolated events on the evolution of salaries. Offers a more equitable and predictable strategy in Argentina.

The new legislation contemplates the Home Own coefficient
The new legislation contemplates the Home Own coefficient

To determine the increase in rent, tenants must consider the values ​​of the coefficient Own house (according to how it is exemplified Infobae) corresponding to the last six months. They must multiply these values ​​among themselves and, to that result, apply the multiplication by the amount of the rental fee currently in force.

Furthermore, the legislation contemplates various tax benefits for both landlords and tenantsrelated to the payment of monotributethe Tax on Personal property and the Tax on Debits and Credits (“al check”). Establishes that income generated exclusively by the rental of up to two properties will be exempt from paying the monotax.

The legislation also offers the possibility of deducting 10% of the total value of the annual rent from Income Tax for both the owner and the tenant. In addition, provinces are invited to consider other tax benefits, which opens the door to a range of additional tax advantages in the area of ​​rentals.

Las termination fines of the contract are agreed according to the rental value at the time of delivery of the property.

On the other hand, the contracts in force under the ley 27.551 prior to their reform that are about to expire pose a dilemma for the owners. These refuse to renew them, and in that case, the existing law continues to apply, maintaining the minimum term of three years. Regarding the coexistence of two types of contracts, it is important to highlight that The laws apply into the future and do not have retroactive effect..

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