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Buying and selling real estate in Mexico

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Post by bimini6 Thu Aug 07, 2014 4:09 pm

New rules??? ANyone know. Copied this from PV news.

On July 4, 2014, the Secretary of Hacienda and Public Credit, the Mexican version of the IRS or Revenue Canada, issued a miscellaneous fiscal resolution that as of September 1, 2014 will affect all buyer and sellers of real estate in Mexico, regardless of their nationality.



Without getting into all of the details of the whys and wherefores of these new rules, basically the tax authority has made the determination that in order for the costs involved in real estate transaction that is taking place be tax-deductible in the future for the party that is purchasing the real estate, the purchaser must provide, at closing, proof of a CURP (Clave Unica de Registro de Población, similar to a Social Security Number of Social Insurance Number) and a RFC (Registro Federal de Contribuyentes or Taxpayer ID Number).

Furthermore, since it is the notary public that will issue the tax-deductible electronic receipt (CFDI or Comprobante Fiscal Digital a través de Internet), the current criteria of the local notaries here so far is to insist on having both buyer AND seller show proof of the CURP and RFC in order to fully complete the receipt or CFDI.



Now that I have bored you to tears with all these initials, what does it mean for you? In a nutshell, if you are buying or selling real estate after September 1, 2014, you will need to have both the CURP and the RFC.

If you happen to be a foreign national, you will need to have either a permanent or temporary residency card as well, as right now it is a precursor to obtaining the CURP. (In practice those with a tourist visa are not being allowed to request a CURP).

Those who do not have the residency permit must apply for the card at the nearest Mexican Consulate in the country of your origin and it should not take more than a few days. The card that you are issued should show the CURP. Once you have your CURP, you can apply for your RFC online. I would strongly recommend having a local accountant help you in order to make sure that the information you are providing is correct. He/she can walk you through the process and coordinate the appointment to finalize the procedure.

Although these procedures can be done online, you will eventually have to be present in Puerto Vallarta to register your residency permit with the local immigration office and to pick up the proof of your RFC at the local office of the tax authority (SAT) so when planning your closing dates I would also allow for time to have these things completed.

You will be shocked at how competent, professional and service-oriented the Mexican tax authority is - it is a unique experience when compared to some of the red tape procedures the US government puts you through. Your residency and tax ID number will give you an identity in Mexico and will make certain procedures more streamlined and efficient. I have also heard that the procedures at the individual consulates are also well-organized and hassle-free.

This new regulation just passed a couple of weeks ago and as with any new law, we expect that there could be changes as it is gradually implemented. The reasoning behind this is to ensure fiscal transparency in all purchase sale operations for everyone - both national and foreigner alike. I will keep you informed of any subsequent modifications in these regulations.

We just received this note from one of our American clients who just applied and received his RFC:

"It was way easier than I thought it would be, I just got a confirmation number online, then we went down to SAT, gave them our ID's and in 5 minutes we had our numbers. Didn't have to go back online and register or anything. That's the fastest and easiest thing I've ever had to do in Mexico."

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Post by sparks Thu Aug 07, 2014 4:21 pm

Not a big deal unless you are a tourist because you can't get a CURP.   Also if the tax write off is not important .... the Notario may be able to skip that part.  Or they may be forced to insist.

Maybe direct purchase away from the coast a lawyer can draw up your papers and don't need a Notario?
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Post by Pedro Thu Aug 07, 2014 5:13 pm

you need a notario to register your deed,etc. here in the interior. that's what we were told and that we did purchasing our house in chapala.
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Post by slainte39 Thu Aug 07, 2014 5:42 pm

ALL real estate transactions must be handled through a notatrio, to be valid.

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Post by sampati Fri Aug 08, 2014 4:38 am

If I read this right it excludes those who come to Mexico on a tourist visa from buying property in Mexico. Am I understanding this right?

If you happen to be a foreign national, you will need to have either a permanent or temporary residency card as well, as right now it is a precursor to obtaining the CURP. (In practice those with a tourist visa are not being allowed to request a CURP).
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Post by bimini6 Fri Aug 08, 2014 8:06 am

That is how I read it Sampati. I bought on a tourist visa as many others do. This will eliminate the possibility of doing this and force those who want to buy, to have a permanent status. I think this will keep some form buying as they may not qualify for the permanent status.

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Post by sampati Fri Aug 08, 2014 8:18 am

I am so glad we just sold our condo in Mexico last month, this new law may eliminate a lot of "snowbird" purchases and may reduce the buyers for Mexican property.
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Post by Intercasa Fri Aug 08, 2014 8:24 am

More crap to slow a weak real estate market. Now tourists will have to jump through hoops to buy property and qualify for immigration documents and even if they want a weekend home they will need to be here weeks and miss work to process their new immigration documents, no more purchasing on the spot, hope they delay or kill it or else it will not benefit the country.
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Post by CanuckBob Fri Aug 08, 2014 8:53 am

Hopefully they counter this by allowing foreigners to directly own property on the coast like they have been talking about for a few years now.
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Post by Grizzy Fri Aug 08, 2014 11:20 am

How does this affect those on Tourist visas who already own property here?
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Post by Playaboy Fri Aug 08, 2014 12:11 pm

Grizzy wrote:How does this affect those on Tourist visas who already own property here?

My GUESS is that you would have to get a residente visa to sell or pay the top tax rate when you do sell.

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Post by Rolly Fri Aug 08, 2014 1:16 pm

You will need a Residente in order to sell the property.
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Post by Intercasa Fri Aug 08, 2014 2:01 pm

From my reading it looks like you need to give the notary sufficient info (RFC and CURP) to prepare an electronic factura and if you do not then you will have a tax basis of zero meaning 100% capital gains based on the sales price in the future.
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Post by Intercasa Fri Aug 08, 2014 2:03 pm

Rolly wrote:You will need a Residente in order to sell the property.

Looks like new purchasers will need immigration docs to avoid tax assuming 100% of the sales price is gain which may not be a problem for properties under $3,600,000 pesos.

Tourists will get hit as they have no capital gains exemption. They will need to get an immigration document to buy as if they do not then will have the 100% gain hit them upon sale from my reading of the law.


I.2.7.1.25. ………………………………………….
El CFDI a que se refiere el párrafo anterior, también servirá para comprobar los gastos por concepto de indemnización o contraprestación que deriven de actos jurídicos que se celebren ante notarios públicos, mediante los cuales un propietario, poseedor o titular de derechos ejidales o comunales de un inmueble, se obliga a permitir a otra persona física o moral, a cambio de una indemnización o contraprestación, el uso, ocupación y disfrute de dicho bien o una franja del mismo, en el cual se alojen instalaciones de infraestructura sobre la superficie o enterradas, de las industrias petrolera o eléctrica, a fin de que construyan, operen, inspeccionen y den mantenimiento a dichas instalaciones.
Cuando no se proporcione la información de cualquiera de los datos requeridos en el complemento, los adquirentes o las personas físicas o morales a que se refiere el párrafo anterior, no podrán deducir o acreditar el costo del bien o el gasto que realicen, con base en el CFDI que el notario expida.
CFF 29, 29-A
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Post by bimini6 Fri Aug 08, 2014 5:08 pm

It definitely adversely impacts those of us who have bought a property on a tourist card. In order to sell we will have to get the residency status. I used to have residency but have not had for about 3 years now. Better figure out how to transfer money back and forth in my account to have 3 months worth in there to get my residency status.

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Post by Intercasa Fri Aug 08, 2014 5:51 pm

3 months? That was the old law, new law requires 6 months bank statements
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Post by bimini6 Fri Aug 08, 2014 8:38 pm

Ja ja, thanks Intercasa, I will figure out what to do to show bastante for 6 months. Thank you for the heads up!!!!

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Post by bimini6 Thu Apr 16, 2015 5:51 pm

So has anyoe sold a house in Mexico on a tourist visa, and if so, the process and how it went, taxes etc. Thanks

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