Hacienda (IRS) tightening up on landlords

[Joco]

From another board, landlords who have not paid taxes on rent might be in big trouble. Hacienda, Mexican IRS, has hired 800 agents to investigate areas where foreigners own rental property.

http://www.mexconnect.com/cgi-bin/forums/gforum.cgi?post=189489;sb=post_latest_reply;so=ASC;forum_view=forum_view_collapsed;;page=unread#unread

We have been advised by our CPA who resides here in Mexico that Hacienda has hired 800 agents to find foreigners who own property here, rent it out and do not pay tax to Hacienda. The tax is based on gross income received, there are no allowable deductions. I am not to psyched to voluntarily put myself on Hacienda's radar on the other hand I don't want to be subject to tax and penalties and I do list on all of the major home rental sites. It would be curious to know how they can prove rental income received as the online calendars only show dates booked, not whether you personally used it or loaned your house to a friend.

http://mexico.escapeartist.com/newsletter/foreigners-who-own-rent-mexico-its-time-to-get-legal

ON RENTAL INCOME:

There are two ways to calculate tax on rental income:

1. The blind deduction of 35% of total income, without deductions with tax of 35% paid on the remaining amount;

2. A 30% tax on income, less allowable deductions which include property tax, maintenance, interest on loans for construction expenses, insurance, salaries of employees and commissions paid to rental agents and property managers.

3. IVA tax is charged on lodgings, hotel rooms and furnished homes which are rented. As of January 1, 2010, this tax has been increased from 15% to 16% in the interior of the country and from 10% to 11% in the border zones.

Rental income generated in Mexico is taxed at regular income tax rates, after deducting actual expenses or a blind deduction of 35%, whichever is greater. This provision applies to residents. Non-residents pay a flat 25% on the gross income. Both residents and non-residents may be required to charge valued added taxes and may also need to charge a 2% hotel tax, depending on the circumstances. While it has been relatively easy to avoid taxes on Mexican rental income, some jurisdictions, for example in San Miguel de Allende, are cracking down on those persons who are not paying income taxes on rental income.

What are the consequences for those who evade the fiscal obligations?

A) Anyone who generates income MUST declare to SAT and if one decides not to he faces FINES AND JAIL as per the law.

In the case where this is a foreigner, the DEPARTMENT OF IMMIGRATION will apply sanctions up to expulsion from the country.

C) The Secretary of Economy (Secretaria de Economia) will also apply fines.

D) If an FTD contract (Contrato de Fideicomiso Translativo de Dominio) is the document providing Rights on the property the person could lose said Rights because of the fraud and non-respect of the obligations one has in said contract.

E) The property can be seized and put on the block for sale.

Emoticon won't go away. It is created by the " B)" and can't get rid of it.

[snowyco]

From another board, landlords who have not paid taxes on rent might be in big trouble. Hacienda, Mexican IRS, has hired 800 agents to investigate areas where foreigners own rental property.

http://www.mexconnect.com/cgi-bin/forums/gforum.cgi?post=189489;sb=post_latest_reply;so=ASC;forum_view=forum_view_collapsed;;page=unread#unread

http://mexico.escapeartist.com/newsletter/foreigners-who-own-rent-mexico-its-time-to-get-legal

Emoticon won't go away. It is created by the *?* and can't get rid of it.

Say: "Emoticon begone!" 3 times with a loud firm commanding tone.

or go into the "other post options" and toggle the "Enable emoticons?" button OFF.

[Joco]

Say: "Emoticon begone!" 3 times with a loud firm commanding tone.

or go into the "other post options" and toggle the "Enable emoticons?" button OFF.

Why don't you go harass someone else. You have bothered me enough. You add nothing intelligent to any subject only bad sarcasm.