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Diver
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CAPITAL GAINS TAX
Capital gains tax law in Mexico states that tax is owed on the profit you receive when you sell your home or property. By law, you have two options
when it comes to capital gains, and you can use whichever is the better of the two options for you.
Option 1: 30 percent of the net profit. (There are a variety of deductions included in this option.)
Option 2: 25 percent of the gross sales amount with no deductions.
(Percentages reflect the 2005 Tax Code)
Although a 30 percent capital gains tax may seem high, Mexico does have several laws and procedures that will assist you in maximizing your cost
basis, thereby reducing your net profit, and thus lowering your capital gains. The key is to understand these laws before you buy, not when you decide
to sell.
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Dave
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| Quote: | Originally posted by lencho
| Quote: | Originally posted by Dave
Unless the seller can prove resident taxpayer status |
Resident taxpayer? What does that taxpayer part mean?
--Larry |
To qualify for homestead exemption and no cap gains.
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Diver
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Just like in the US - 2 years no capital gains for your principal residence.
Here is a site I found full of good info.
http://www.mexconnect.com/mex_/travel/rrwalters/rrwtaxes.htm...
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Dave
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| Quote: | Originally posted by lencho
| Quote: | Originally posted by Dave
To qualify for homestead exemption and no cap gains. |
Oh, I understand what it's for in this context, what I don't understand is what is meant by "taxpayer." Anyone that
consumes stuff here pays IVA. Homeowners (well, Fide holders for the foreigners) pay property taxes. If one has a Mexican-registered vehicle, he's
paying taxes with the tenencia. Some of us pay business or income tax. So what do you mean by "taxpayer"?
--Larry |
The key word is resident. Derive more than 50% of your income and primary residence is located in Mexico. Fm2 vs FM3, etc. Some of the
supposed requirements to be treated as a resident taxpayer. In reality, you are what the notario declares you to be...regardless of qualification. It
pays to "shop around". 
BTW, there is no longer a 2yr requirement. Qualifiers instead.
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oldhippie
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Mood: muted
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| Quote: | Originally posted by Dave
| Quote: | Originally posted by lencho
| Quote: | Originally posted by Dave
To qualify for homestead exemption and no cap gains. |
Oh, I understand what it's for in this context, what I don't understand is what is meant by "taxpayer." Anyone that
consumes stuff here pays IVA. Homeowners (well, Fide holders for the foreigners) pay property taxes. If one has a Mexican-registered vehicle, he's
paying taxes with the tenencia. Some of us pay business or income tax. So what do you mean by "taxpayer"?
--Larry |
The key word is resident. Derive more than 50% of your income and primary residence is located in Mexico. Fm2 vs FM3, etc. Some of the
supposed requirements to be treated as a resident taxpayer. In reality, you are what the notario declares you to be...regardless of qualification. It
pays to "shop around".
BTW, there is no longer a 2yr requirement. Qualifiers instead. |
"In reality, you are what the notario declares you to be...regardless of qualification."
When I was buying my place, after signing the final papers in the Notario's office, we were chatting and I mentioned that the capital gains taxes upon
sale were high. He said not to worry, "there are ways", and he would take care of me.
Also, I had such a positive experience hiring a local real estate attorney to handle the purchase, I'll certainly do the same if I sell. I imagine
they know "the ways".
He made it so easy and really looked out for my interests. Even after his fee my costs were less because he helped me negotiate with the seller for
seller paid changes to the house. He even got the bank to change some parts of the boilerplate fideicomiso I didn't like. Specifically, fees stated in
dollars and the annual escalation of fees tied to inflation of the peso. It's all stated in pesos now.
[Edited on 8-14-2007 by oldhippie]
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Sackmaster
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Location: San Diego
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| Quote: | Originally posted by jdtrotter
First of all, we have no intentions of selling our Mexican home for a very long time, if ever! However, we like to cover all bases and one never
knows what the future will bring. So, here is the question.
We should have our fidiocamiso very soon. Also our FM3s that we obtained in San Diego should be back from La Paz soon. So those items will be
covered.
Now, if we needed to sell the property, how does that work? Any information will be appreciated, as always.
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You need not just any lawyer, but the best lawyer in town. There is one in TJ/Baja who has the reputation for being the best. KUSI San Diego's Micheal
Turko did a 2 or 3 part series on how to buy and sell property in Mexico without getting ripped off. Turko mentioned the lawyers name and interviewed
him in his broadcast. Go use KUSI's search engine to find the lawyers name. This lawyer practices in both Mexico and the U.S.
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