It’s almost summertime, and City of Buenos Aires residents are swimming in a sea of alphabet soup trying to decipher their Alumbrado, Barrido y Limpieza or ABL (Street lighting, sweeping and cleaning) expenses, and the rationale for another double-digit increase in 2013.
After three years of no ABL hikes, Capital Federal residents paid an average ABL increase this year of 66%. The government is saying the average 24% increase for 2013 is merely to keep pace with inflation, although some residents may see increases approaching 100%.
The determining factor for a City of Buenos Aires property owner is the VFH or Valuacion Fiscal Homogenea of their dwelling. The VFH is a percentage (roughly 20%) of the property’s assessed market value.
According to the City’s FAQ, the VFH takes into account market value, location, surroundings, block density or FOT and “the real value of the building based on the category, use, quality and architectural characteristics and state of conservation.” Leave it to government for a simple answer.
With planned ABL increases in 2014 and 2015, the City wants to reach a level where average annual ABL expenses for a Buenos Aires homeowner are 0.8-0.9% of the market value of a property compared to the current average of 0.5%.
805,000 Buenos Aires property owners should see monthly ABL increases between 1 and 30 pesos, 210,000 will see monthly increases between 30 and 60 pesos, 280,000 will see increases above 60 pesos and 455,000 will see no increase. By comparison, ABL expenses in the City of Buenos Aires are still lower than in the surrounding province, which La Nacion graphs today in beautiful detail.
For more information about Argentina real estate investments, complete the form below.