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Ian948

Oct 3, 2013, 10:04 AM

Post #1 of 6 (237 views)

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Repeal of VAT exemption on homes

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There seems to be little information around concerning the proposed 2014 budget which removes the exemption for paying VAT on house purchases. As the impact is potentially huge - either adding massive costs to buyers or likely devaluing sellers positions - any one with the real estate or legal world have words of wisdom to offer ?

Its kinda close to Jan 1 2014 - so if this slips through could be a nasty surprise for many..

:shock:

chicois8

Oct 3, 2013, 11:34 AM

Post #2 of 6 (213 views)

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Re: [Ian948] Repeal of VAT exemption on homes

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Is this a rumor or do you have a link to your source.

Gri-lango

Oct 3, 2013, 11:43 AM

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Re: [Ian948] Repeal of VAT exemption on homes

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The secretario de Hacienda, Echegaray, met with the Housing Industry leaders yesterday to discuss the effects of such a tax on the housing market. It looks like they are pleading with him to only tax new purchases and grandfather in the mortages already in place. This appears to be their last ditch effort to try and salvage something...so yes...it does look like the PRI has the votes to make this new tax pass through the House and Senate.

Mexico will soon have very high tax rates on everything (they are going to raise income tax from 33% to 42% and tax food and drugs...even pet food will get hit with 16% IVA). IMHO, not a smart business plan for the nation, but hey, the politicians need more money!

Ian948

Oct 3, 2013, 12:13 PM

Post #4 of 6 (188 views)

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Re: [chicois8] Repeal of VAT exemption on homes

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Yes

Read: http://www.publications.pwc.com/DisplayFile.aspx?Attachmentid=6868&Mailinstanceid=28325

http://www.lexology.com/library/detail.aspx?g=8aaf7672-b481-4ebe-b1c1-b564df3ab74e

Also the 2014 budget is discussed in El Economista and whilst VAT on education is dead in the water there does not seem to be any lobbying for keeping the exemption on residential housing , some mentions of exempting low income and mid income housing ( social housing ) but the 100K US and above , a bit worrying...... Hence my wondering if some better informed person out there could share some insights.

Several other international accounting firms have similar reports also mentioning the VAT exemption repeal on sale of houses.

As we are about to buy a larger house all inputs are appreciated !

mcm

Oct 3, 2013, 12:23 PM

Post #5 of 6 (181 views)

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Re: [Gri-lango] Repeal of VAT exemption on homes

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A previous poster said: Mexico will soon have very high tax rates on everything (they are going to raise income tax from 33% to 42% and tax food and drugs...even pet food will get hit with 16% IVA). IMHO, not a smart business plan for the nation, but hey, the politicians need more money!

Source please? From everything I've read, this is NOT in the current Hacienda reform proposal. The proposal includes increasing the income tax rate from 30% to 32%, and DOES NOT include IVA on food and drugs.

Unless I'm missing a recent MAJOR change in the proposal (which is, of course, always possible!).

chicois8

Oct 3, 2013, 12:25 PM

Post #6 of 6 (177 views)

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Re: [Ian948] Repeal of VAT exemption on homes

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I've always heard you get the gov. you deserve, as an american I could not or would not vote the PRI back into office...guess will will just see how it all shakes out....

One tax I they did raise last year was my beach house,it was $28 USD for 5 years and last year it went to $33 USD.......