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• Political Structure
• Economic Structure
• Market Geography
• Steps To Buying Real Estate In Mexico
• Step 1: Finding the Right Property
• Step 2: Making an Offer
• Step 3: Due Diligence and Obtaining Proper Documentation
• Step 4: Payment
• Step 5: Closing
• Closing Costs
• Tax Issues
• Contact a Mexico Realtor

Tax Issues on Mexican Real Estate

Because of the complexity of tax issues, it is recommended that you seek the advice of a tax professional in both your home country and Mexico.

• Income Tax: Payment of income tax is made to the Hacienda.  Any foreigner who is a legal resident of Mexico must be registered with the Hacienda.   Anyone who earns income in Mexico, including income from rental property, is required to pay income tax on earnings, regardless if you are a resident or visitor.  The determinant is whether you earn income, not whether or not you receive.  Thus, there is no income tax for pension and social security payments received from outside of Mexico.
• Impuesto Sobre la Renta: The capital gains tax is a tax on the gain of the sale and is due when property is sold.
• Impuesto Sobre Valor Agregado (IVA): This is the value-added tax and applies to fees charged by service providers and includes the Notario, appraiser, realtors, and other professionals.  In the Baja Peninsula, Cancún, and Rivera Maya, IVA rates are10%.  They are 15% elsewhere.
• Predial: This is the yearly real estate tax that is based on the declared value, the catastro.  This tax is due at the local tax office on the first of every year.  Beware that you will not receive a statement notifying you of this tax.
• Acquisition Tax