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Confused - and Concerned - About Tax Obligations
Related to the Sale of Your Mexican Real Estate?
Here's How to Build Your Case for a Mexican Homestead Tax Exemption!By Raoul Rodriguez-Walters ©Raoul Rodriguez-Walters
His Email"How can I obtain a capital gains, or homestead, tax exemption on the sale of my Mexican real estate?" is one of the most frequently asked questions by expatriate residents of San Miguel when they contemplate selling their homes.
Residents may not be aware that the requirement that you live in your Mexican home for two years before it can be sold as a qualifying property under the homestead exemption was eliminated by tax reform in 2002. And, different interpretations by Notarios (the professional legal experts responsible for preparing and recording deeds of title and for calculating taxes on real estate transactions) in recent weeks may have sparked the current concern in the expat community about the so-called "capital gains" tax. There has been no actual change to the Mexican tax law since the 2001 tax reform, but new awareness and sensitivity to how it's applied, especially to foreign sellers, seems to have created the confusion.
Answers vary not only within San Miguel, they also differ depending on where in Mexico you are selling property. For instance, in Los Cabos, foreigners are almost never granted the homestead tax exemption by Notarios. In Mexico City, homestead exemptions are almost always granted to foreigners. And, in San Miguel, the homestead exemptions are granted on a case-by-case basis to the extent that the sellers comply with certain legal requirements.
What it boils down to is the tax status of the seller, not his or her residency status.
What Notarios Decide is Critical
Read the complete article . . .
xxx
By Raoul Rodriguez-Walters ©Raoul Rodriguez-Walters
His Email
Raoul's Articles
Raoul Rodriguez-Walters is the founding partner of MexicoAdvisor, the only company in Mexico offering cross-border financial planning, legal, tax and title services to English-speaking foreigners wanting to live, retire or set up a small business in Mexico. The firm also specializes in providing representation for homebuyers in Mexico. For more information about MexicoAdvisor, see: http://www.mexadv.com. Or, visit their San Miguel office: Correo #24, tel.: 152-0586; info@mexadv.com.
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