On June 1, 2026, Implementing Decree No. 406/2026 (the “Decree“) was published in the Official Gazette. The Decree amends the regulations implementing the Income Tax Law (Decree No. 862/2019) in order to reflect the amendments introduced by the Labor Modernization Law (Law No. 27,802).
Law No. 27,802, enacted on March 6, 2026, expanded the scope of the exemptions available under the Income Tax Law by introducing exemptions applicable to income derived from the lease of residential real estate, as well as to gains arising from the transfer of ownership of real property and the assignment of rights relating to real property located in Argentina. However, the wording of these provisions gave rise to a number of questions concerning their subjective, objective, and temporal scope, creating uncertainty as to their practical application. Against this background, the new implementing regulations clarify these issues and more precisely define the scope of the tax benefits established by the Law.
First, with respect to income derived from the lease of residential real estate, the Decree confirms a restrictive interpretation regarding the categories of eligible taxpayers. The exemption applies exclusively to individuals and undivided estates, whether resident or non-resident in Argentina, while legal entities are expressly excluded. Accordingly, the regulations eliminate the possibility of extending the exemption to business entities, one of the principal uncertainties arising from the legislative reform.
The Decree further clarifies that the exemption applies to rental income accrued on or after January 1, 2026, irrespective of the date on which the lease agreement was executed. It also expressly extends the exemption to deemed rental income attributable to real property made available free of charge or for an undetermined consideration.
With respect to the transfer of real property, the Decree confirms that the exemption likewise applies to individuals and undivided estates, regardless of whether they are residents or non-residents. The regulations therefore confirm that the benefit extends to foreign taxpayers, resolving an issue that had remained unsettled following the enactment of the Law and that had previously generated controversy (which had led to the amendment of Section 258 of the regulations implementing the Income Tax Law).
From an objective standpoint, the exemption is not limited to the sale of real property but also extends to the transfer or assignment of rights relating thereto, including transfers evidenced by the assignment of a purchase and sale agreement (boleto de compraventa) or other similar contractual commitments. As regards its temporal application, the exemption applies to transactions carried out on or after January 1, 2026.
Finally, the Decree also regulates the exclusion of the deduction provided for in Section 85(k) of the Income Tax Law. Specifically, it clarifies that the deduction equal to ten percent (10%) of the annual amount received (in the case of the lessor) or paid (in the case of the lessee) in connection with residential lease payments shall not be available where the lessor is an individual or an undivided estate.
In summary, the implementing regulations adopt a restrictive approach regarding the categories of taxpayers entitled to the benefits introduced by Law No. 27,802, limiting their application to individuals and undivided estates, whether resident or non-resident. Although this approach rules out broader interpretations that could arguably have been derived from the statutory language, Decree No. 406/2026 provides greater certainty concerning the subjective, objective, and temporal scope of the new exemptions, thereby enhancing the predictability of a tax regime that had generated significant interpretative uncertainty since its enactment.