Tingting Posted June 21, 2017 Report Share Posted June 21, 2017 Can anyone give me definitive answers to the questions below? I've read, re-read and am now going batty. Some sites say one thing, others say another. So...my questions: If you're a residente permanente, and have been so for over 3 years (4 in our case, but owned the property for 12) with a CURP, do you get the exemption? (Hmmm...what I'm trying to say is that we've lived here full time for 12 years, went permanent in 2013, and owned the property the entire time.) If not, how is the tax percentage determined? I've read it's anywhere from 1.92% to 35%--gulp! What type of taxes have most sellers experienced? I know I need to go talk to a notario, but any basic info/suggestions/etc would be appreciated. TIA. Link to comment Share on other sites More sharing options...
pappysmarket Posted June 21, 2017 Report Share Posted June 21, 2017 24 minutes ago, Tingting said: Can anyone give me definitive answers to the questions below? I've read, re-read and am now going batty. Some sites say one thing, others say another. So...my questions: If you're a residente permanente, and have been so for over 3 years (4 in our case, but owned the property for 12) with a CURP, do you get the exemption? (Hmmm...what I'm trying to say is that we've lived here full time for 12 years, went permanent in 2013, and owned the property the entire time.) If not, how is the tax percentage determined? I've read it's anywhere from 1.92% to 35%--gulp! What type of taxes have most sellers experienced? I know I need to go talk to a notario, but any basic info/suggestions/etc would be appreciated. TIA. You are correct that you need to talk to a Notario. The specific one you use will give you his/her interpretation. Remember that here the Notario holds great power and their interpretation of the law is rarely overturned by anyone unless a complete case of fraud. You can show them the rule book but they are the referees. The problem sometimes is the buyer does not want to use the Notario you have selected and they are entitled to do the picking. Usually their agent wants to get the deal done and your agent can often make things happen the way you want. If you need another headache, here is a link to a lengthy article from late last year courtesy of the PV MLS. http://www.mlsvallarta.com/en/blog/real-estate-articles/capital-gains-tax-isr-sale-homes-mexico Good luck! Link to comment Share on other sites More sharing options...
bmh Posted June 21, 2017 Report Share Posted June 21, 2017 I talked to 2 notarios , one in Chiapas and one in Jalisco and I got 2 different stories.. FIrst he told me he could not give me the exemption because although I am naturalized I was a foreigner when I bought the house 17 years ago.. I told him it was illegal for me to claim I was a foreigner so he backed off but he gave me an explanacion that did not make any sense to me and that the taxes were calculated according to a formula .. The rate was what you say they are. The Jalisco notario told me that my husband and I were each entitled to a 4 million pesos exemption and we would pay for whatever we sold the house over that.. which is irrelevant for us at this time... I am a Mexican citizen so it maybe different..do not know because at first the notario told me I would have to pay 30%...on the amount above 4 millions.. You better check with various notarios in the area where you will be selling.. they seem to vary in their interpretation.. The buyer selects the notario usually so that may be a problem too.. I agree it is on the confusing side. You can also sell a property and get the exemptions every 3 years. Link to comment Share on other sites More sharing options...
Bisbee Gal Posted June 21, 2017 Report Share Posted June 21, 2017 We sold a home here in late 2012 (just when the whole immigration rules were changing from FM3/2's and there was a lot of uncertainty re: immigration status and capital gains). We insisted our potential listing realtor get a ruling from a Notario and then we added in the sales contract a paragraph stating that Notario #X had to be the Notario used on the sale. We recently returned to Ajijic and bought a home earlier this year. In that contract, the seller required us to use her Notario #X (again because she had gotten a ruling from him re: capital gains). So, get the ruling from the Notario BEFORE you sign a listing contract and have your listing agent insert a paragraph in the boilerplate contract re: must close with Notario #X. Link to comment Share on other sites More sharing options...
pappysmarket Posted June 21, 2017 Report Share Posted June 21, 2017 9 minutes ago, Bisbee Gal said: We sold a home here in late 2012 (just when the whole immigration rules were changing from FM3/2's and there was a lot of uncertainty re: immigration status and capital gains). We insisted our potential listing realtor get a ruling from a Notario and then we added in the sales contract a paragraph stating that Notario #X had to be the Notario used on the sale. We recently returned to Ajijic and bought a home earlier this year. In that contract, the seller required us to use her Notario #X (again because she had gotten a ruling from him re: capital gains). So, get the ruling from the Notario BEFORE you sign a listing contract and have your listing agent insert a paragraph in the boilerplate contract re: must close with Notario #X. Excellent advice. When selling a property we consider the Notario much more important than the listing agent. They are like the owner of a Hacienda was. They made the rules. Link to comment Share on other sites More sharing options...
Tingting Posted June 21, 2017 Author Report Share Posted June 21, 2017 Thanks for the answers. I've made an appointment with a local notario (this is for a house sale) to get a rough idea. My questions are just to stop my heart from hitting the floor. One other one: where do they get the valuation? From the actual buy/sell (when we bought to when we sold) or from the official predial valuation? Link to comment Share on other sites More sharing options...
Bisbee Gal Posted June 21, 2017 Report Share Posted June 21, 2017 8 minutes ago, pappysmarket said: Excellent advice. When selling a property we consider the Notario much more important than the listing agent. They are like the owner of a Hacienda was. They made the rules. When we met with the Notario in 2012, he told us that by law, Notarios are personally liable for any taxes they fail to collect at the time of the closing on the house. Link to comment Share on other sites More sharing options...
bmh Posted June 21, 2017 Report Share Posted June 21, 2017 cannot answer that question but the notario from down south told ne there were a couple of way to calculate the tax gain... Yo would think it would be simple but no... Down south too a friend of mine sold his house and the buyer had to write 2 checks one for one million and the other for 2 and that did not go through the notario... another screwy deal no doubt..He only paid tax gain on the one million amount...Apparently the law changes as well so no much point knowing in much in advance.. Link to comment Share on other sites More sharing options...
pappysmarket Posted June 21, 2017 Report Share Posted June 21, 2017 10 minutes ago, Bisbee Gal said: When we met with the Notario in 2012, he told us that by law, Notarios are personally liable for any taxes they fail to collect at the time of the closing on the house. Yes, they surely will tell you that. Link to comment Share on other sites More sharing options...
lakeside7 Posted June 21, 2017 Report Share Posted June 21, 2017 This info was lifted from one of the Real Estate company's web pages Closing costs are paid by the buyer, and to some extent depend on the value of the property. They include a transfer tax, legal Notary fees, a property registration fee, and fees for the tax certificate, title search fees and property appraisal, as well as miscellaneous clerical expenses. Your Ajijic Real Estate Sales Associate can supply you with a detailed pre-closing cost estimate from the Notary once an offer is made. The seller pays all capital gains taxes and real estate fees. Simply stated, capital gains is a thirty-five percent (35%) tax on the difference between assessed values at the time of purchase and sale, with adjustments made for inflation. Your Sales Associate can provide you with detailed information on future capital gains taxes, and assist you in your tax planning. Link to comment Share on other sites More sharing options...
pappysmarket Posted June 21, 2017 Report Share Posted June 21, 2017 Exemptions is what the OP is interested in. Link to comment Share on other sites More sharing options...
bmh Posted June 21, 2017 Report Share Posted June 21, 2017 It is not that simple and clear. if you ask a notary.. I wonder why the CHiapas notario and the notario here told me 30 % was the max... Link to comment Share on other sites More sharing options...
Tingting Posted June 21, 2017 Author Report Share Posted June 21, 2017 Again, thanks for the info, but I'm pretty familiar w/who pays what. The only question is CGT and the exemption and...oh, heck! I will update this once I speak w/the notario. I have the site that Pappysmarket recommend (thank you!) and it's giving me a very rough idea (heart is now off the floor), but I guess I could also flip a coin and have just as sure an answer. Gotta love living here! Link to comment Share on other sites More sharing options...
mudgirl Posted June 22, 2017 Report Share Posted June 22, 2017 Check with your notario re the place being your principal residence. As far as I am aware this is important in determining capital gains tax exemptions. If it is not your principal residence, in other words, you just own it, but rent it out, you may not be eligible for any exemptions. The value of the property is based on an "avalua". An independent assessor will come out before a sale and assess the value. Not sure whether this is the buyer's or seller's financial responsibility. It is not based on property tax value. Then capital gains is based on the difference between what you bought it for and what you sold it for. As a seller, you can deduct from your gain anything pertaining to the construction, fixtures, furniture and appliances that the buyer is keeping, etc, for which you can produce a valid, official factura. Link to comment Share on other sites More sharing options...
pappysmarket Posted June 22, 2017 Report Share Posted June 22, 2017 Yeah, we're not in Kansas anymore and they do things as they will. One of the first things we learned upon moving here was not to ask what the law or rule was on whatever, but rather "How do you suggest we obtain.........". It served us well then and continues to this day. Link to comment Share on other sites More sharing options...
pappysmarket Posted June 22, 2017 Report Share Posted June 22, 2017 1 minute ago, mudgirl said: Check with your notario re the place being your principal residence. As far as I am aware this is important in determining capital gains tax exemptions. If it is not your principal residence, in other words, you just own it, but rent it out, you may not be eligible for any exemptions. The value of the property is based on an "avalua". An independent assessor will come out before a sale and assess the value. Not sure whether this is the buyer's or seller's financial responsibility. It is not based on property tax value. Then capital gains is based on the difference between what you bought it for and what you sold it for. As a seller, you can deduct from your gain anything pertaining to the construction, fixtures, furniture and appliances that the buyer is keeping, etc, for which you can produce a valid, official factura. Another good point and a good agent will make sure the avalua is done by someone with your interest at heart. Definitely not Kansas. Link to comment Share on other sites More sharing options...
Ferret Posted June 22, 2017 Report Share Posted June 22, 2017 There are lots of other things that come in the calculation and Spencer knows them all. Things like size of property and coverage of the property... as well as all that mudgirl mentioned. I think it would be worth your while to contact Spencer for the information before you go to your Notario. Information is a valuable commodity and the rules keep changing but Spencer is honest and forthright and has nothing to gain one way or the other by providing you the information. U.D.I.S also comes into play for the calculation and Spencer can better explain that than I can. Good luck! Link to comment Share on other sites More sharing options...
geeser Posted June 22, 2017 Report Share Posted June 22, 2017 3 hours ago, bmh said: cannot answer that question but the notario from down south told ne there were a couple of way to calculate the tax gain... Yo would think it would be simple but no... Down south too a friend of mine sold his house and the buyer had to write 2 checks one for one million and the other for 2 and that did not go through the notario... another screwy deal no doubt..He only paid tax gain on the one million amount...Apparently the law changes as well so no much point knowing in much in advance.. This has gone on here as well as at the beach over the years. This 2 million + a million on the side sticks the buyer when it next sells with a $1 million starting basis and he will pay a much higher capital gains tax because of it. Many people bought property around Cuyutlan and paid no attention to the amount written on the deed but only what was written on the contract. They have gotten stuck with higher taxes when they sold because of this. Link to comment Share on other sites More sharing options...
pappysmarket Posted June 22, 2017 Report Share Posted June 22, 2017 A blast from the past Cuyatlan. At one time the next in place. How are things at the black sand beach? Link to comment Share on other sites More sharing options...
bmh Posted June 22, 2017 Report Share Posted June 22, 2017 I think it is a little different but maybe not. It was common here to do that 15 years ago to pay less taxes I bought the houses that way and of course have o facturas for the work.. This deal is something else-- A friend of mine who sold this year told me about it.. The notario down there also told me I would have a choice between 2 options on how to calculate the the gain.. so it wounds like there is two way to do it but only over the 4 million exemption per person on the deed.. At least here the avaluo has been revised at a higher price I probably will get for the house so that is another interesting.. thing to look at... Link to comment Share on other sites More sharing options...
AngusMactavish Posted June 22, 2017 Report Share Posted June 22, 2017 TAXES ON TRANSFER OF PROPERTY TITLE (closing costs in Mexico)- If a property is held by the seller for more than two years and the property is the seller’s primary residence, he or she should pay 5% of the sales price. If the property is raw land, held for less than two years or not the primary residence of the seller, the sale is taxed at 29% of capital gain. http://mexicomatters.net/mexicorealestate/22_notariosbajamexico.php Link to comment Share on other sites More sharing options...
pappysmarket Posted June 22, 2017 Report Share Posted June 22, 2017 27 minutes ago, AngusMactavish said: TAXES ON TRANSFER OF PROPERTY TITLE (closing costs in Mexico)- If a property is held by the seller for more than two years and the property is the seller’s primary residence, he or she should pay 5% of the sales price. If the property is raw land, held for less than two years or not the primary residence of the seller, the sale is taxed at 29% of capital gain. http://mexicomatters.net/mexicorealestate/22_notariosbajamexico.php June 2006. Good up to date info, gracias. Link to comment Share on other sites More sharing options...
ComputerGuy Posted June 22, 2017 Report Share Posted June 22, 2017 Note that this whole thing changed substantially last year, as any good real estate agent will tell you, and they rely heavily on notarios to ensure mistakes are not made. So I would ask someone who really knows. Already this thread has wandered into untrustworthy areas. Link to comment Share on other sites More sharing options...
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