dawsonpointers
11/7/2016 17:03 EST
We received this advice from our lawyers/escribanos just before the closing date for our house in UY (this Wed, Woo Hoo!)
"If you are planning to do any improvement to the property, bear in mind that you will have to pay all the social security taxes to the Social Security Bank (BPS)"
I admit that I am befuddled by this statement.
Does anyone have experience with this?
Of course, our lawyer/escribanos will explain; but, the perspective of expats would be most welcome.
Thanx
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Morell
11/7/2016 17:27 EST
The BPS payments are very complex. I have been told various stories from " Even if you do the work yourself - such as paint the inside of your house, you will have to pay BPS" to " As long as none of your neighbours denounce you to the BPS office,and if ten years go by after the improvements, you do not have to pay"
I have been told the BPS due can almost double the cost of the work, that it is not due if you say add a wooden gazebo as that is not considered a permanent structure, and that if you do the work or it is done by "Volunteer labour" then no BPS is required.
Some contractors will tell you that they have added the BPS payment to the estimate they give you, others say they want cash and not to worry about the BPS.
It is a total mystery to me still.
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focus
11/8/2016 08:22 EST
BPS is basically a labor tax - if you do something that requires labor, you get taxed, even if you do the work yourself. The rates depend on the trade but you can assume almost a doubling of cost. If you hire a contractor, you don't really see it because it is the contractor that has to deal with it, but don't assume. If you do some improvement that is low visibility and you are doing the work yourself I wouldn't worry about the BPS and hope that when you sell, the inspector doesn't notice. If you move a wall, he will notice because the plans no longer conform. There is the 10 year thing where if you sell and there is an improvement that was done more than 10 years ago, you will not have to pay.
In reality, the bottom line with BPS is this: 1) do not hire labor that is not covered (ignore this advice at your own risk), 2) register if you are doing new construction, 3) if you do repairs and sell the house before the repairs are 10 years old, you will have to 'regularize' the house - meaning, get everything reconciled with the BPS office (money and time) before the deed can be transferred.
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Morell
11/8/2016 08:32 EST
I recall Mujica when he was President saying that if you do the work yourself you should not have to pay BPS but I don't know if any changes were made.
We have asked about it when buying paint for instance and the store clerks said No don't worry about it.
I have also heard there are fixed BPS costs for each job and even if the workers only take say half a day for the job, BPS says the job should take two days and make you pay accordingly.
I read that is why many people do not take care of their homes very well as they don't want to pay BPS. Seems a silly system if it discourages hiring workers and buying supplies!
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dawsonpointers
11/8/2016 09:47 EST
Thanx, that is most helpful.
Is it possible to see what documents BPS has on file (floor plans, renovation history, etc.)?
I found this on line but don't know how to use it.
http://www.bps.gub.uy/9536/consulta-de-expedientes.html
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