BajaNomad

Anyone Run an AirBnB in Baja?

BeachSeeker - 11-21-2023 at 10:41 AM

We are seriously looking to buy in Baja in the near future, but are maybe 7-8 years from living there full time. We run a successful AirBnB in San Diego, and would like to rent the Baja home when we are not using it. Does anyone have any experience running an AirBnB in Baja? Specifically we are looking to better understand VAT and Mexican income tax as a non-resident without an RFC.

If anyone has any experience and wouldn't mind chatting a little about it, please let us know. Thanks!

4x4abc - 11-21-2023 at 02:06 PM

tax number or not - the gov will take about 20% from the top
Baja has been flooded with investors creating rentals
that of course has pushed prices down
downtown rentals have now US price level (La Paz)

edge of town:
https://www.airbnb.com/rooms/33074662?source_impression_id=p...


Screen Shot 2023-11-21 at 1.59.51 PM.png - 56kB

shari - 11-21-2023 at 04:46 PM

I have an air BnB listed and yes it is tough with all the taxes and fees if you are legal which I am. I struggle with competition from people who arent legally doing business....grrrrrr.

surabi - 11-21-2023 at 05:29 PM

Quote: Originally posted by 4x4abc  
tax number or not - the gov will take about 20% from the top



That is incorrect.

With an RFC:
Airbnb charges the guests the 16% IVA and the state occupancy tax (which varies by state from 3-6%, I believe. They pay out half that IVA to the host to submit to SAT and supposedly remit the other half to SAT directly. They also pay out the occupancy tax to hosts , who are required to submit it. But all that money comes from the guest, not off the host's earnings. And if you have an RFC, you can deduct any facturas you can get for expenses, with your tax number on it.
Additionallly, with an RFC, Airbnb withholds and pays to SAT 4% income tax. So the only cost to hosts that comes off the top is Airbnb's 3% host sevice charge, and 4% income tax, 7% in total, not 20%.

Without an RFC:

Taxes will be charged to guests as above, but all will be withheld rather than sent to the host to submit. Additionally, instead of 4% income tax being withheld, 20% is. And without an RFC number, you can't get any facturas for expenses to be able to deduct.

I don't quite understand what Shari means about struggling to compete with those who aren't paying taxes- Airbnb is required to charge the taxes by SAT, so all listings will be paying those taxes. It used to be possible to list and not pay taxes, but since Airbnb was forced to charge and collect the taxes a couple, three years ago, it's no longer possible to fly under the radar.

And 4x4- if you have an RFC, I don't know why Airbnb is withholding 19% income tax- there's something wrong there.


[Edited on 11-22-2023 by surabi]

4x4abc - 11-21-2023 at 07:55 PM

well, I have an RFC and the example above is my ls booking
nobody to talk to at airbnb - they do what they do

BeachSeeker - 11-21-2023 at 08:10 PM

Thanks for all of the replies.

Surabi, I'm following everything you are saying, except for you say income tax is only 4% with an RFC. Isn't income tax (ISR) rate based on income? From what I can tell, once you make over $13,381 pesos per month, your ISR tax rate is over 21% anyhow, more than the 19% that AirBnB withholds.

Harald, thank you for the screenshot! Do you have an RFC? Do you pay anything in addition to what AirBnB charges the guest and withholds from you? Do you report the income separately, or just let the 19% that AirBnB withholds cover it?

surabi - 11-22-2023 at 12:39 AM

Quote: Originally posted by 4x4abc  
well, I have an RFC and the example above is my ls booking
nobody to talk to at airbnb - they do what they do


Airbnb CS is indeed extremely frustrating to deal with, you have to be extremely patient and persistent, but yes, there are people to talk to. If you registered with Facturify through Airbnb, you should only have 4% withheld. You have to set up a Facturify account, not just enter your RFC number in your Airbnb account. You have to ask Airbnb how to do that. They sent out emails about it a couple years ago.
That your breakdown above also shows that Airbnb has withheld the entire 16% IVA, when they release 8% of that to the host if you are registered, tells me you never filled out the Facturify form.

[Edited on 11-22-2023 by surabi]

[Edited on 11-22-2023 by surabi]

[Edited on 11-22-2023 by surabi]

surabi - 11-22-2023 at 12:55 AM

Quote: Originally posted by BeachSeeker  
Thanks for all of the replies.

Surabi, I'm following everything you are saying, except for you say income tax is only 4% with an RFC. Isn't income tax (ISR) rate based on income? From what I can tell, once you make over $13,381 pesos per month, your ISR tax rate is over 21% anyhow, more than the 19% that AirBnB withholds.

Harald, thank you for the screenshot! Do you have an RFC? Do you pay anything in addition to what AirBnB charges the guest and withholds from you? Do you report the income separately, or just let the 19% that AirBnB withholds cover it?


You have to report the income if you have an RFC. Airbnb just submits the taxes. If you don't have an RFC, you can't report your income.

As far as the tax rate, yes, it is based on income. But if you have an RFC, as I said, you can deduct expenses you have facturas for. For instance, I can deduct my gas, internet, electric bills, dental bills, etc. And I just rent a private room/ bath for one guest. So my Airbnb income isn't as high as 13,381/month and I really only have a viable 6-7 month booking window. It's too hot and humid in the summer to get tourists where I live. The tourists who do come want apool and AC, which I don't have.

However my accountant works her magic, I have not had any taxes owing at the end of the fiscal year. (You report income and pay taxes monthly, but there is a year end statement which resolves everything- for instance, my dental bills can't be deducted monthly- they are deducted from any taxes owing at the end of the year)

surabi - 11-22-2023 at 01:12 AM

Quote: Originally posted by lencho  
Quote: Originally posted by surabi  
I don't quite understand what Shari means about struggling to compete with those who aren't paying taxes-

Not all landlords use AirbNB. Many Mexicans I know who rent out their properties do so by word of mouth or other informal means and do NOT report that income to Hacienda.

I suspect it's harder for a Gringo to fly under the radar.


It's not hard to fly under the radar if you rent directly, regardless of whether you are Mexican or Gringo. But you'd have to have a low-key rental that didn't draw attention. A big house that sleeps 10 people, who party and disturb the neighbors is going to get neighbors complaining, and if they are mad enough, report you to the authorities. My neighbors wouldn't even know I had Airbnb guests, or some who book directly through word of mouth, or because they are repeat guests who booked through Airbnb the first time, because I only host 1 guest at a time and most take the bus here from the airport- they don't even have a car. As far as anyone else would know, they are just friends or family who came to visit.

I don't know that there are many Mexicans who do short term rentals without paying taxes and advertising on a short term rental site- how would tourists find out about them? Long term rentals, sure.

4x4abc - 11-22-2023 at 07:51 AM

Quote: Originally posted by BeachSeeker  

Harald, thank you for the screenshot! Do you have an RFC? Do you pay anything in addition to what AirBnB charges the guest and withholds from you? Do you report the income separately, or just let the 19% that AirBnB withholds cover it?


I have nom additional charges/taxes to pay
yes, I have an RFC
I report my income through an accountant

BeachSeeker - 11-22-2023 at 11:38 AM

Quote: Originally posted by surabi  


You have to report the income if you have an RFC. Airbnb just submits the taxes. If you don't have an RFC, you can't report your income.

As far as the tax rate, yes, it is based on income. But if you have an RFC, as I said, you can deduct expenses you have facturas for. For instance, I can deduct my gas, internet, electric bills, dental bills, etc. And I just rent a private room/ bath for one guest. So my Airbnb income isn't as high as 13,381/month and I really only have a viable 6-7 month booking window. It's too hot and humid in the summer to get tourists where I live. The tourists who do come want apool and AC, which I don't have.

However my accountant works her magic, I have not had any taxes owing at the end of the fiscal year. (You report income and pay taxes monthly, but there is a year end statement which resolves everything- for instance, my dental bills can't be deducted monthly- they are deducted from any taxes owing at the end of the year)


Dental bills? How are your dental bills a rental expense?

surabi - 11-22-2023 at 12:41 PM

Quote: Originally posted by BeachSeeker  


Dental bills? How are your dental bills a rental expense?


They aren't a rental expense, that's why they aren't calculated into the monthly statements as deductions from rental income, only at year-end. Just as in the US or Canada, there are things that can be used in your yearly tax filing to reduce the amount of taxes owed.

surabi - 1-12-2024 at 05:10 PM

@ Beachseeker, your point by point responses to my post on your other thread are super arrogant and contain uncalled-for personal attacks. I was just trying to save you from making the same mistakes a lot of other people do (and sorry, I didn't remember you were the same poster from this thread), which you decided to take as some personal attack or assumption that you were stupid or incompetent.

And no, I haven't experienced any of the issues I mentioned on the other thread because I am not a remote host- I live in Mexico full time and host guests in the home where I live and have had an RFC and been paying Mexican taxes on my businesses for 18 years. I just know lots of other hosts who try to manage a rental in Mexico remotely, and have had the kind of issues I mentioned.

BajaBlanca - 1-13-2024 at 09:41 PM

We used to do airbnb in La Bocana and it worked really well at the time. It was challenging to set it up room by room, but I did it.

Just last week I used airbnb to travel to the capital of Turkiye and because I wrote a raving review, it brought up our reviews as hosts at the hotel. So fun to read.

We still run the hotel and have a neighbor who runs the day to day business. Our income is reported to our accountant in La Paz. I highly recommend her if you are looking for someone. We have another very good friend who has used her as well, for all his businesses.

ISABEL MENDEZ whatsapp +52 612 108-9089

BeachSeeker - 1-14-2024 at 02:08 PM

Thank you BajaBlanca!