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hooperdooper

Sep 23, 2013, 9:47 AM

Post #1 of 7 (374 views)

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IVA on real estate sales and rentals?

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Can someone confirm that the new tax plans call for the 16% IVA to be applied to all real estate sales and rentals thus increasing the costs of buying and renting by 16% in one fell swoop? What do the real estate folks think this will do to real estate sales in Mexico? Is this something that buyers will happily absorb or that sellers will lose? I have not seen any posts on this particular aspect (unless I missed them) but it sounds to me like this could have a big impact if on real estate sales.

chicois8

Sep 23, 2013, 10:02 AM

Post #2 of 7 (362 views)

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Re: [hooperdooper] IVA on real estate sales and rentals?

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I do not believe the new tax law has been passed yet.......

hooperdooper

Sep 23, 2013, 10:06 AM

Post #3 of 7 (360 views)

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Re: [chicois8] IVA on real estate sales and rentals?

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Is there some question about its passage. It has to be passed by Oct 20 and if passed would take effect on Jan 1, 2014. That is not far off and I have not heard anyone suggest he doesn't have the votes to pass it although I know the opposition party is opposed but do they have the votes to stop it?

mcm

Sep 23, 2013, 1:49 PM

Post #4 of 7 (317 views)

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Re: [hooperdooper] IVA on real estate sales and rentals?

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The Hacienda reform is still under discussion, and from what I've read, it seems very likely that there will be changes. In particular, both the PAN and the PRD (the ''opposition'' parties) oppose the IVA on home sales and rentals. Both also oppose the IVA on private school tuition.
So, I would be aware, but not rush out and sell my home (or buy a new one) to avoid a 16% IVA!

Ian948

Oct 3, 2013, 1:42 PM

Post #5 of 7 (160 views)

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Re: [mcm] IVA on real estate sales and rentals?

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It is a repeal of the exemption of VAT on sales etc - true not passed but some areas of concern -

Tuition proposal has been killed - very powerful Senators have made clear it will not pass.

On housing the social housing is exempted from this change , but I cannot find information on where home sales above say 100k will be excluded - rather the opposite , the present exemption simply puts the VAT at 0% , removing this exemption will cause it to be 16%. Between that and approx 6% closing costs now you are looking at potential additions of approx 20-22 % in rough figures on top of the cost of the property. I would argue that must affect both buyers and sellers as existing property will potentially need to adjust its price levels to accommodate buyers who do not want to pay the extra premium.

It would seem those in the real estate industry have not noticed the potential problem or are simply hoping it will go away ...... little is heard and buyers are not being warned of potential exposure to a hefty tax ( buy now and trust doesn't get issued until next year - does that then mean you would owe and extra 16% !!! )

I am hoping this will be killed off as well ..... but hope doesn't make for good fiscal planning !

Gringal

Oct 3, 2013, 2:03 PM

Post #6 of 7 (156 views)

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Re: [Ian948] IVA on real estate sales and rentals?

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"It would seem those in the real estate industry have not noticed the potential problem or are simply hoping it will go away ...... little is heard and buyers are not being warned of potential exposure to a hefty tax ( buy now and trust doesn't get issued until next year - does that then mean you would owe and extra 16% !!! )"

Since when have real estate agents told buyers about potential problems with properties? lolol. And......hope springs eternal.

Ian948

Oct 3, 2013, 2:05 PM

Post #7 of 7 (153 views)

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Re: [Gringal] IVA on real estate sales and rentals?

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True - what was I thinking :-)