On February 23, 2023, the regulation of the Law for the Attraction of Investors, Rentiers (Rentistas) and Pensioners (No. 9.996) was published. The purpose of the regulation is to regulate the tax treatment and the procedure for the authorization of this type of residences, aiming to simplify the procedures for the applicant.
Some of the most significant changes with respect to Law No. 9.996 are as follows:
The minimum amount for a real estate investment is established at one hundred and fifty thousand dollars, legal tender of the United States of America (US$150,000). However, said investment is not permitted under the name of corporate entities, that is to say, it is permitted only if the investment is made under a natural person's name.
The figure of proven income is not acceptable, via the creation of term bank deposits as a means to opt for the migratory category of temporary residence as rentier (rentista).
On the other hand, the regulation provides a series of tax benefits in favor of investors, pensioners and rentiers (rentista), during the first five (5) years of effectiveness of the law. such as,
-The exemption of import taxes to household goods that require the import of instruments or materials for the professional or scientific exercise and, up to two land, air and/or maritime transportation vehicles. These must be held for 10 years, and if sold prior to that all realized tax benefits must be paid back to the treasury.
-Resident investors who have the approval for their category and acquire real estate after the publication of this regulation, may apply for a reduction of up to twenty percent (20%) of the corresponding transfer tax . Those who opt for such benefits must keep the property in their possession for at least ten (10) years and just like with personal property, if sold within the first 10 years the tax benefits must be paid back to the treasury.
-It is important to point out that when the resident investor, pensioner or rentier annuls or renounces his migratory status, he must pay the totality of the taxes from which he was exempted.
-It is noteworthy that even though the original law 9.996 was passed and signed into law on June 21st, 2021, it's regulation was only published on February 23, 2023, effectively wiping out 18 months of unrealized tax benefits of the five years (5) allotted as of the bill's passage. Given that the time to process residency applications is currently taking up 12 months at present, if one were to start the residency process now (Sept 2024), one would find himself with only roughly 1.5 years with which to realize the bill's tax benefits. All the while having to hold said assets for an additional 10 years before selling them in order to retain said tax benefits.
In short, one must delve into the details with the proper immigration and real estate attorneys in order to make a decision that fits your needs and future plans.
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