BajaNomad

true cost to buy/sell

JG - 2-27-2006 at 11:17 AM

Have heard a cost range to buy a house in baja including all taxes, bank trust, survey etc to be app. 5-10%...to sell including all commisions, taxes and other fees can run 30- 40 PERCENT... could this be true? Any of you Nomads have first hand knowledge of the true costs involved in purchase and sale as well as the yearly fees involved in a $150,000 house? Thanks for any help..jg

Bruce R Leech - 2-27-2006 at 11:47 AM

don't forget you need to pay US capital gains taxes also.

Cincodemayo - 2-27-2006 at 04:18 PM

Yeah don't forget that Bush needs to rebuild that mosque in Baghdad that the Muslims blew up with our tax dollars.

Real Estate Sales Cost-Good Question

awfulart - 3-2-2006 at 06:25 AM

There must be someone out there who has sold and bought real estate in Baja. 30 to 40 % seems excessive, certainly even more than Caleefornia. However, what if the buyer pays all costs. If that is the case, this cost should be honestly & accurately estimated in any negotiations between buyer and seller.

Bob and Susan - 3-2-2006 at 06:57 AM

Mulege recent costs to buy..

$1500 attorney for paperwork
$500 for notario
$800 for bank trust to start
$400 a year for bank to hold trust

taxes about $200 to $400 depending on value

Bruce R Leech - 3-2-2006 at 07:28 AM

the thing is that the biggest expense is the capital gains both Mexican and US and there is now way any one can tell you what that is going to be. it will be different in every case.

JG - 3-2-2006 at 08:54 AM

Legand has it that the Mexican tax on a sale is based on the GROSS sales price, not the net increase in value...$150.000 sales price x 30%= $45,000 + $9,000 sales commish (assume 6%) +all other closing costs totaling app. 40%....$150,000x 40%= $60,000....and if you finiance the house..OUCH!! These figures are an estimation based on a few conversations and refer to a house, not bare land. Seems odd no one seems to want to talk about this much.

bancoduo - 3-2-2006 at 09:39 AM

who to trust? Bob and Susan. Who are developers. Or JG.
:fire:

I am learning

Dianamo - 3-2-2006 at 12:14 PM

my way through the BUYING process.

It seems to me that by the time you acquire all the necessary goverment documentation, foreign status docs, certificate of no liens, certificate of paid property taxes, pay someone to do the title search, and set up the fidiecomiso, etc. etc. etc..... it is going to cost about $6000, :wow::wow::wow: (I am being told $5000, but the numbers don't add up to $5K, so I am planning on $6K)..... Then you pay the 2% transfer tax, won't know what that is until the Gov Appraisal is complete.:wow:

The purchase price of the property really doesn't change many of the fees that are charged greatly. Most of the fees are the same for $20K purchase as for a $100K purchase.

The buyer pays all fees except for Capital Gains Taxes and the seller's commission (but we really pay that, just indirectly).

Good luck, I am willing to talk offline if you want, send me a U2U.

DianaMo

comitan - 3-2-2006 at 01:16 PM

It has been posted here referencing a Mexican Lawyer that you will not have to pay Mexican Capital gains if you live in your home more than 2 years and it is your primary residence, and you have to prove you do not have a home in the U.S.

Bruce R Leech - 3-2-2006 at 01:37 PM

any one know what the Us capital gains tax is for sail on foreign property is?

bajajudy - 3-2-2006 at 02:17 PM

Good question, Bruce
I understand that you can make up to $80,000 outside the USA without paying income tax on it. Does that include a capital gain on property....
Should I even open the can of worms about Mexican citizenship and capital gains?

elizabeth - 3-2-2006 at 05:56 PM

Quote:
Originally posted by bajajudy
Should I even open the can of worms about Mexican citizenship and capital gains?


Sure, why not????? There hasn't been a good can of words on this board for awhile!!!!

Bruce R Leech - 3-2-2006 at 07:26 PM

Quote:
Originally posted by bajajudy
Good question, Bruce
I understand that you can make up to $80,000 outside the USA without paying income tax on it. Does that include a capital gain on property....
Should I even open the can of worms about Mexican citizenship and capital gains?


I dont think so:?:

bancoduo - 3-2-2006 at 07:30 PM

80,000 yes. But but but IRS. You have to be out of the US for 18 months and only visit for two weeks. Being in BC so close to the border a red light goes on. Good luck! The proof is on you. I heard it never works unless you can prove you were in jail or something like that. The system considers you a lying peace of retired chit.:no:

[Edited on 3-3-2006 by bancoduo]

Bruce R Leech - 3-2-2006 at 07:38 PM

you need to file with the IRS when you buy or sell even if there are no taxes due. then they will let you know for sure:light:

cost to buy with 30% down

JG - 3-2-2006 at 08:52 PM

Cost to buy...30% down..150k..11.9%(inc finance and loan fees), according to Platinum Capital (adveritised on this site).. all costs included...maybe..still no real testimonials on a sales cost per cent on a house , non resident...dont want to sound like a wienee but cant seem to get a straight answer on a simple question of cost to sell in the event I want to in time. This is getting very interesting!!

bajajudy - 3-2-2006 at 09:38 PM

If you are a legal alien in Mexico, you have the proof....your FM2, FM3 or legal resident status(I dont remember the letters and numbers for it) if you dont then you are a stupid piece of retired.

It is all according to the circumstances. There are no pat answers to your question.

Acuity - 3-3-2006 at 06:39 AM

Quote:
Originally posted by JG
...dont want to sound like a wienee but cant seem to get a straight answer on a simple question of cost to sell in the event I want to in time. This is getting very interesting!!


If you're thinking Baja is another safe place that you could buy and sell property to quickly make a bundle - well, maybe you want to think hard about it. Minimum listing period for Los Cabos realtors is (or at least was, one year ago) one year. In a "hot" market, maybe that gives you an idea of just how "liquid' Baja real estate can be. If you want to sell, maybe you'll be worrying about the taxes you will pay, or maybe you'll be carrying the place for a little longer than you might like!

As many (with direct experience) have told me, "if you can't afford to possibly lose some or even all of it, don't "invest" in Mexican real estate". The reason to buy here shouldn't be profit, it should simpy be to live here. Just my 2c worth.

[Edited on 3-3-2006 by Acuity]

Bob and Susan - 3-3-2006 at 06:57 AM

Acuity is completely correct....

Like a "cold" it's very hard to get rid of investment property in Baja.
Too much competition...everything is "for sale".
If you "buy" plan on keeping it.

It's not the investment...its the experience:biggrin:

Bruce R Leech - 3-3-2006 at 07:17 AM

bajajudy is right There are no pat answers to your question.

Bruce R Leech - 3-3-2006 at 09:40 AM

http://www.irs.gov/publications/p54/ch04.html#d0e2133

Topics - This chapter discusses:
Useful Items - You may want to see:
Who Qualifies for the Exclusions and the Deduction?
Requirements
Tax Home in Foreign Country
Bona Fide Residence Test
Physical Presence Test
Foreign Earned Income
Foreign Earned Income Exclusion
Limit on Excludable Amount
Choosing the Exclusion
Foreign Housing Exclusion and Deduction
Housing Amount
Foreign Housing Exclusion
Foreign Housing Deduction
Married Couples
Form 2555 and Form 2555-EZ
Form 2555-EZ
Form 2555
Illustrated Example

bajajudy - 3-3-2006 at 12:44 PM

I am certainly not an accountant. But wouldnt you deduct the cap gains paid from your outside income? Thereby reporting a negative income. Because even if you make less than $80,000 you still have to report it, you just dont have to pay taxes on it.
Boy is this getting confusing.

this web site may help ...did for me

JG - 3-3-2006 at 12:46 PM

http://www.mexperience.com/property/prop_buying.htm#Costs

Bruce R Leech - 3-4-2006 at 07:14 AM

you need to pay capital gains taxes in both the US and Mexico. there is no deduction. why is this so confusing?

Bob and Susan - 3-4-2006 at 08:51 AM

"You can take either a credit or a deduction for income taxes paid to a foreign country or a U.S. possession."

"Taken as a deduction, foreign income taxes reduce your taxable income."

"Taken as a credit, foreign income taxes reduce your tax liability."

"regardless of whether you take a credit for foreign income taxes, you may be able to deduct other foreign taxes."

http://www.irs.gov/publications/p54/ch05.html#d0e5905

Bruce R Leech - 3-4-2006 at 09:15 AM

Quote:
Originally posted by Bob and Susan
"You can take either a credit or a deduction for income taxes paid to a foreign country or a U.S. possession."

"Taken as a deduction, foreign income taxes reduce your taxable income."

"Taken as a credit, foreign income taxes reduce your tax liability."

"regardless of whether you take a credit for foreign income taxes, you may be able to deduct other foreign taxes."

http://www.irs.gov/publications/p54/ch05.html#d0e5905


that is for income tax not capital gains tax

Bruce R Leech - 3-4-2006 at 03:34 PM

check this thread http://forums.bajanomad.com/viewthread.php?tid=15892