Manifistation

what?...you didn't research and confirm all this independently before you started?

you need to see an abogado before you make any final payments.

First of all, Developers and Contractors most often under-declare the actual value. Mine did that and now I have to pay a lot to have the actual value manifested. I knew the rules but he refused to do it. He said, "nobody manifests actual value in this jurisdiction" (Santa Rosalia/Mulege). He said "wait and see....trust me....it's just a game and the government officials all know how to play it. If you do it you will pay more taxes than anyone else."

The truth is, if you ever want to sell, you will have to pay the Federal Government the capital gains difference between the declared value as manifested, and the amount it sells for...at a tax rate of around 30%.

Now I am taking these steps:

1. Obtain a copy of the building permit. I have a notario working on this but it seems the developer/contractor never filed one. I have been quoted $1000.00 U.S. to make a new one.

2. Hire a surveyor. (He can gather all the necessary paper work to manifest). He will need to draft plans in order to get the building permit.

3. Go to the Catastro office, or have the notario or surveyor to manifest the actual value.

None of these services are cheap and it takes a lo-o-o-o-ng time. It all works on Mexico time. In my case, nothing has been done since I set the works in motion, in April. I have heard that it has taken months. Mexico teaches you patience.

Pacifica: Where is your construction? BCS or BCN? (La Paz is the filing/enforcement point for Guerro Negro to Cabo) I’m attempting to get all the little duckies aligned on my THIRD construction in 7 years, so I just MIGHT be qualified to answer your questions! At the end of construction, your builder needs to give you the finished construction paperwork he filed with Catastro…BEFORE he closes out your construction permit with Catastro, you should sit down with him & see how closely the construction value & your original lot price are to reality. Builders tend to understate the construction value because they understate their income & therefore understate their tax reporting to Hacienda. There are two residential construction levels or catagories; the one they all use is the typical basic rustico construction quality; the other is typically more along the lines of what gringos build & that’s tourista category, which is based on a higher quality of work throughout. Now is the time to find out what your builder is reporting your construction & land values as! If you’re not happy with anything he submitted, make him file corrected paperwork for the true value with Catastro. If he waffles or refuses, you might want to consider threatening to report him to Hacienda for tax evasion; threaten to file a complaint with PROFECO against him. The reason it matters to you is that a low value might reduce your already ridiculously low property taxes by $20-50 (USD equiv) a year, but it’ll really hurt you much worse down the road if you sell...YOU are liable for a near 30% capital gains tax between the registered value & the sales price.

The other thing you need to ask you builder for is copies of the Seguro Social paperwork for each month of construction. The builder isn’t responsible; YOU, the property owner is & you & any subsequent owners of the property can & will be held liable for the SS, the fines & late payment fees. If no SS was paid on your workers, a lien will be placed on the property & the then current owner is fully responsible.

You also want to get all the warranties for services and or products they installed in writing, as well as all facturas & receipts.

Look over the numbers on everything he gives you & check for things like the price per sq. meter of construction is correct & the total sq. meters of construction is correct. Make sure the finished value of the construction meets or exceeds the monies you actually paid out for both your property and your construction.

"She" know this BECAUSE…her (less painful to refer to that inexperienced person in third-person!) first Architect signed receipts for over $176K USD, her construction was closed out at Catastro for $9.10 pesos per sq meter, bringing the total value of her construction to about $15,000 pesos!!! On a home she sold 3 years later for $275K USD!! Prior to that sale, I went into Seguro Social to get proof that SS had been paid on the workers for my construction & lo & behold…nary a centavo had been paid! What saved her butt was the contract with the Architect stated HE was fully responsible for paying SS. It cost her about $60-70K pesos to have the construction classification changed to tourista & have the value brought up to the actual sales price, to prevent getting hit with $80-90K USD in capital gains!! This is a totally legal process. You just need to have copies of all the facturas (bills with a supplier tax ID on them)…plain old receipts won’t fly. Basically what they do is refile new numbers on your original construction…and yes, there is a fee for this!

Toneart: Uh oh!! I hate to mention this, but if your builder didn’t file for & receive building permits, I’ll bet he didn’t pay SS on the workers despite the fact he included it in your cost. If you have receipts for all the payments you made to him, I’d threaten to report him to both Hacienda & SS, if he doesn’t make things right to your satisfaction.

I’m hoping that you both applied for, paid for & had ALL of the following done: alignmiento (indicates where your wall can legally be placed adjacent to a road), survey (conventional property line markings), Environmental Impact Study (EIS) & Manifistation. Make sure you have all of these documents currently in hand and/or don’t make final payment to your builder until you do & you agree with what they say. The current fine for lack of an EIS is up to $100,000 pesos, they will put a cease & desist on your construction for however long it takes to resolve. She knows THIS ONE because she’s been waiting since December for the final signature on her EIS!!! Don’t clear your property or plant anything or you’ll be subject to the fine. “She” (HER AGAIN!) is NOT paying a fine...though the fine would have been cheaper than what it’s costing her in rent & associated delayed construction costs!!

Hope this helps! What would REALLY help would be for Catastro to publish a checklist of ALL the requirements & the order in which they have to occur prior to anyone doing anything on your land!!

Edit typo

[Edited on 6-14-2007 by longlegsinlapaz]

No problem....I'd prefer you to be prepared....as opposed to blindsided!

Chivato builder

I think this post and others has just about convinced me of my future house in Mexico............a rental.