INSIDE LAKESIDE
Log In or Register

Check your spam/junk folder for activation e-mail after you register.

Getting the Shaft on REAL ESTATE in MEXICO

Page 1 of 4 1, 2, 3, 4  Next

View previous topic View next topic Go down

Getting the Shaft on REAL ESTATE in MEXICO

Post by Jim W on Sun Aug 09, 2015 4:00 pm

We sold our home @ Lakeside, and are closing the 20th of August. Lived in our home pretty much full time (9 years) till I got diagnosed with the big C!

Now Notario #2 (he is good) tells me I will owe approx. 100,000pesos for capital gains. We paid $250k US, wrote a check to a US Bank, and assume same will occur @ closing. We put in $40k on improvements and sold for $220,000. Now Mexico is basing the tax is that the Peso is @16.5, and I bought when the peso was @ 10.5.

We were pretty naïve when we moved here. Hired a contractor, installed a heated pool, didn't discover 4 years later, contractor didn't get and provide facture.

Bottom line, I had no idea the peso puts on sellers! Who would expect a loss when you sell to equate to Capital Gains tax.

Just frustrated.......time for us to get out of DODGE.....LOL Basta
avatar
Jim W
Share Holder
Share Holder

Posts : 5153
Join date : 2010-04-24
Age : 70
Location : Chapala
Humor : Whenever I need it!

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by helohfe on Sun Aug 09, 2015 6:48 pm

Jim..Your post made my stomach ache..I would check around if only for sanity..The purchase price was in US dollars and sold in US dollars with you incurring a loss independent of improvements. It seems like the R.E. process is flawed. Since the valuation listed in the deed is in peso's with the then existing exchange rate your sale orice should be corrected taking in the adjusted purchase price to the new peso valuation to keep the figures equitable. I would at least talk with Spencer and another Notario..Any seller from here on out is going to be screwed if this is in fact correct....

helohfe
Share Holder
Share Holder

Posts : 92
Join date : 2015-05-22

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Jim W on Sun Aug 09, 2015 6:57 pm

helohfe wrote:Jim..Your post made my stomach ache..I would check around if only for sanity..The purchase price was in US dollars and sold in US dollars with you incurring a loss independent of improvements. It seems like the R.E. process is flawed. Since the valuation listed in the deed is in peso's with the then existing exchange rate your sale orice should be corrected taking in the adjusted purchase price to the new peso valuation to keep the figures equitable. I would at least talk with Spencer and another Notario..Any seller from here on out is going to be  screwed if this is in fact correct....



helohfe, We have already started the process with Spencer! I am sharing this for newbies, plus others, as losing money on the investment, is one thing.......Paying capital gains on a loss is bullshit!
avatar
Jim W
Share Holder
Share Holder

Posts : 5153
Join date : 2010-04-24
Age : 70
Location : Chapala
Humor : Whenever I need it!

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Vandre on Sun Aug 09, 2015 7:19 pm

I thought I understood that if you sell 1 primary residence in a 5 year time span, you are exempt from capital gains.  I do think there was/is a max Peso Gain limit for this exemption but don't remember how much.  I also thought that an annual inflation percentage was also factored in and deducted from any gains @ closing.  I feel for you Jim, it's a minefield out there!

Vandre
Share Holder
Share Holder

Posts : 166
Join date : 2011-07-25

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Jim W on Sun Aug 09, 2015 7:31 pm

Vandre wrote:I thought I understood that if you sell 1 primary residence in a 5 year time span, you are exempt from capital gains.  I do think there was/is a max Peso Gain limit for this exemption but don't remember how much.  I also thought that an annual inflation percentage was also factored in and deducted from any gains @ closing.  I feel for you Jim, it's a minefield out there!


Thank you Vandre!
avatar
Jim W
Share Holder
Share Holder

Posts : 5153
Join date : 2010-04-24
Age : 70
Location : Chapala
Humor : Whenever I need it!

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by hockables on Sun Aug 09, 2015 7:33 pm

The Realtor & MLS might price the product in US Dollars... this is Mexico, and the transactions were done in Pesos... Beer

hockables
Share Holder
Share Holder

Posts : 3697
Join date : 2010-04-06

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Jim W on Sun Aug 09, 2015 7:34 pm

Jim W wrote:
Vandre wrote:I thought I understood that if you sell 1 primary residence in a 5 year time span, you are exempt from capital gains.  I do think there was/is a max Peso Gain limit for this exemption but don't remember how much.  I also thought that an annual inflation percentage was also factored in and deducted from any gains @ closing.  I feel for you Jim, it's a minefield out there!


Thank you Vandre!  


I can't believe anyone, in any country, would pay capital gains on a loss!
avatar
Jim W
Share Holder
Share Holder

Posts : 5153
Join date : 2010-04-24
Age : 70
Location : Chapala
Humor : Whenever I need it!

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by CanuckBob on Sun Aug 09, 2015 7:37 pm

And we aren't all Americans with the 16.5 to 1 dollar...... Beer

Seriously though I would check with Spencer on this one or with another Notario. Something doesn't sound right. Do you have a permanente visa Jim?
avatar
CanuckBob
Humble Administrator
Humble Administrator

Posts : 13363
Join date : 2010-04-04
Age : 54
Location : Lake Chapala (from Vancouver)
Humor : Sick and twisted

http://Www.casadecomo.webs.com

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Jim W on Sun Aug 09, 2015 7:47 pm

CanuckBob wrote:And we aren't all Americans with the 16.5 to 1 dollar...... Beer

Seriously though I would check with Spencer on this one or with another Notario. Something doesn't sound right. Do you have a permanente visa Jim?


Yes I am Permanente! Miss ya bud. Deb will arrive the 12th.....thru the 21st. If necessary, I will fly in for closing. Still bureaucratic bullshit!
avatar
Jim W
Share Holder
Share Holder

Posts : 5153
Join date : 2010-04-24
Age : 70
Location : Chapala
Humor : Whenever I need it!

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by CanuckBob on Sun Aug 09, 2015 8:12 pm

Being that you are permanente and had the house for over 5 years, I didn't think there should be any capital gains unless something has once again changed.

It does need to be your residence too. Do they somehow know you haven't lived in it for a few years?
avatar
CanuckBob
Humble Administrator
Humble Administrator

Posts : 13363
Join date : 2010-04-04
Age : 54
Location : Lake Chapala (from Vancouver)
Humor : Sick and twisted

http://Www.casadecomo.webs.com

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Canmex 87 on Sun Aug 09, 2015 8:20 pm

Could this have anything to do with the value declared at the time of purchase?

Canmex 87
Share Holder
Share Holder

Posts : 195
Join date : 2010-12-03

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by SunshineyDay on Sun Aug 09, 2015 8:33 pm

Jim did you get stuck with paying the "Finquito"? Buyer beware here.


Last edited by SunshineyDay on Sun Aug 09, 2015 8:39 pm; edited 1 time in total

SunshineyDay
Share Holder
Share Holder

Posts : 826
Join date : 2012-12-02

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by solajijic on Sun Aug 09, 2015 8:37 pm

We just had a transaction on a property that was done with a very very low purchase value. It does seem unfair. I happen to agree with the peso value adjustment thought but then I am not in charge.

solajijic
Share Holder
Share Holder

Posts : 547
Join date : 2011-03-24
Location : Ajijic November 2004
Humor : “The game of history is usually played by the best and the worst over the heads of the majority in the middle.”

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by SunshineyDay on Sun Aug 09, 2015 8:40 pm

You have to be careful what you say---even here!

SunshineyDay
Share Holder
Share Holder

Posts : 826
Join date : 2012-12-02

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Jim W on Sun Aug 09, 2015 8:57 pm

CanuckBob wrote:Being that you are permanente and had the house for over 5 years, I didn't think there should be any capital gains unless something has once again changed.

It does need to be your residence too. Do they somehow know you haven't lived in it for a few years?


Only if you turned me in LMAO!



avatar
Jim W
Share Holder
Share Holder

Posts : 5153
Join date : 2010-04-24
Age : 70
Location : Chapala
Humor : Whenever I need it!

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Jim W on Sun Aug 09, 2015 9:02 pm

CanuckBob wrote:Being that you are permanente and had the house for over 5 years, I didn't think there should be any capital gains unless something has once again changed.

It does need to be your residence too. Do they somehow know you haven't lived in it for a few years?

Has nothing to do with it Bob. This is a serious issue......you buy in Mexico...and get fucked! Been there done that, lost my butt!
avatar
Jim W
Share Holder
Share Holder

Posts : 5153
Join date : 2010-04-24
Age : 70
Location : Chapala
Humor : Whenever I need it!

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by sir on Sun Aug 09, 2015 9:18 pm

Been a topic for one to two years - why didn't you pay attention? Didn't your good buddy F. Lee Bailey warn you?

sir
Senior member
Senior member

Posts : 51
Join date : 2013-05-16

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by brigitte on Sun Aug 09, 2015 10:14 pm

so you bought a house for 2.625 000 pesos (at 10.5) and sold it at
3 630 000 pesos (at16.5) you are over the 2.5million pesos so you pay capital tax and did not pay with facturas so cannot deduct your remodelling. According to the pesos figures you made 1.million pesos so you pay capital tax on that. Is that the logic?
I would think that many people will have the same surprise as you had especially when the value of the houses was low balled on the deed back whenever and few have facturas and finiquitos for the work they did.

You have to look at it as having enjoyed the place for 5 years and move on..nothing else to do.

brigitte
Share Holder
Share Holder

Posts : 3141
Join date : 2011-12-02

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by WillieRae on Mon Aug 10, 2015 7:10 am

It has been my personal experience both as a realtor in Sinaloa as well as selling our home in June of this year, that the ceiling for triggering capital gains was 3,500,000 mx....anything that was gained over that amount was taxed as capital gains. Of course, like all things here-that can change. And yes, you can get caught in the exchange rate of the day. A lot will depend on how you recorded the amount paid at the time of purchase. It used to be that you could record the purchase at the appraised value which was usually a lot less than the sale price, thus saving the buyer as fair amount of acquisition taxes...the catch is on the sale...you get caught up for cap gains. Now most notarios won't close a sale that way.
It pays to consult a GOOD notario about All aspects of property ownership in Mexico....purchase costs....sales costs....tax implications, etc.

WillieRae
Share Holder
Share Holder

Posts : 271
Join date : 2014-07-22

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by CanuckBob on Mon Aug 10, 2015 7:44 am

So what was all the talk in the past about not paying capital gains if you lived in a house for at least 5 years and had an FM2 (now a permanante) visa?
avatar
CanuckBob
Humble Administrator
Humble Administrator

Posts : 13363
Join date : 2010-04-04
Age : 54
Location : Lake Chapala (from Vancouver)
Humor : Sick and twisted

http://Www.casadecomo.webs.com

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by solajijic on Mon Aug 10, 2015 7:56 am

Tht still stand the 5 year occupancy as a primary home. There is a threshold also. So again the chat with the people who know whats what and how to minimize your problem or prevent one from occuring.

The tactic in 2004-5-6-7 was to put a ridiculously low value on the property. Those owners who agreed to that are now sellers who are paying.



solajijic
Share Holder
Share Holder

Posts : 547
Join date : 2011-03-24
Location : Ajijic November 2004
Humor : “The game of history is usually played by the best and the worst over the heads of the majority in the middle.”

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Sideways on Mon Aug 10, 2015 8:49 am

Friends went throught this recently. They owned 6+ years here. But also owned a home in the US. They were made to pay capital gains because of that, or at least that's what they understood. If they had not owned a home in US, they would have been exempted from capital gains. Even though they spent 8 months a year in Ajijic, they were toldprove that Mexico was their primary Fiscal residence (term used by Notario and realtor), that they should have filed Mexican tax returns even if no tax was due. They are retirees with US pensions/investments, but the Notario said without Mexican tax returns he had to assess capital gains. It was significant due to low-ball on original deed when that was being done.

Sideways
Share Holder
Share Holder

Posts : 178
Join date : 2011-12-19

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by CanuckBob on Mon Aug 10, 2015 9:06 am

Thats good to know. When we bought a few years ago the notario had us pay the taxes on the listed price which was more than what we actually paid. He said that it would be beneficial when we sold. I didnt really understand why at the time but I do now.
avatar
CanuckBob
Humble Administrator
Humble Administrator

Posts : 13363
Join date : 2010-04-04
Age : 54
Location : Lake Chapala (from Vancouver)
Humor : Sick and twisted

http://Www.casadecomo.webs.com

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by brigitte on Mon Aug 10, 2015 11:45 am

Low balling the prices on the deed goes back a whole lot longer than 2004.

brigitte
Share Holder
Share Holder

Posts : 3141
Join date : 2011-12-02

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by RVGRINGO on Mon Aug 10, 2015 12:04 pm

It is also a different ballgame if the property was rented out.

RVGRINGO
Share Holder
Share Holder

Posts : 1049
Join date : 2011-02-16

Back to top Go down

Re: Getting the Shaft on REAL ESTATE in MEXICO

Post by Sponsored content


Sponsored content


Back to top Go down

Page 1 of 4 1, 2, 3, 4  Next

View previous topic View next topic Back to top

- Similar topics

 
Permissions in this forum:
You cannot reply to topics in this forum