7 replies to this topic

[lcrop1]

I am under the impresion that if you dont have an fm2 you will pay 30 persent tax on capital gain when you sell your home. my question is the tax charged on the profit, or can one take every thing that was spent on the property to maintain it off the profit befour the 30 persent tax is paid? all i have at the presant time is a fmt. I want to buy a differnt home there.

[RVGRINGO]

As I understand it, the cost basis is deducted from the sales price to determine the profit, upon which to take the tax. The formula also includes other factors, like land size vs. construction size, etc., but that's the general idea. The big surprise comes when sellers find out that receipts and 'notas' aren't enough to prove expenses; one needs formal 'facturas' and 'finiquitos' from contractors to justify the cost basis.

[mpb]

With an FM2, you are eligible to have an exemption once every 5 years. If more than 1 sale, within the 5 years or build one and have not lived in it where you can produce 3 electric bills in your name, then you will pay the capital gains tax of 30 %. What your actual expenses, costs etc., have little bearing on the tax you pay. The Notarios, with their majic fingers, device a set of numbers, less than what amounts are involved and taxed on those numbers. If you have an FM3, since last October, you would no longer be eligible for capital tax, either the exemption or able to pay it at all. You are then taxed at 25% of the total selling price, OUCH!

[RVGRINGO]

As soon as the new INM rules are published, the old FM visas will be merged into a single 'temporary residence visa'. I wonder what will happen then. Perhaps we'll have to become 'permanent residents' or naturalized citizens to qualify for any exemption. We'll have to wait and see.
The current situation seems to have been devised by the real estate agencies and the notarios, last fall. Mexico didn't change anything; they did.

[Intercasa]

You need an FM2, many here suffer from taxation due to "phantom gains" due to an artificially low price on their deed when they purchased and now the notario will use actual selling price. Sure you can adjust your basis upwards but only if you have facturas for the work, something which 99% of the people don't have.

[Ajijic]

Spencer if you have Inmigrante status (FM-2) does that automatically mean no capital gains, assuming no other claim in past 5 years, or do other factors come into play?

[Intercasa]

You need a minimum FM2 at the present time, speaking purely of immigration status. There are some other factors, best to be discussed with a notario to make sure you fit the requirements.

[lorilynn]

The original post mentioned that the seller only has an FMT - would the capital gain tax then be 25% of the entire sales price?