holdrja Posted May 14, 2015 Report Share Posted May 14, 2015 I've been following the car nationalization threads and appreciate Sonia's and Spencer's updates. My current take on nationalization: ain't worth the hassle, for us. We've already sold our G-VIN SUV and will dump our 2004 NAFTA vehicle at CarMax in a few months. Noticed the most recent thread was discussing just staying temporada, instead of going permanente. One question for you folks - does anyone have recent experience with selling their house, what kind of visa did you have at the time, and did you have to pay capital gains? I have heard rumors that this changed in the past couple of years. Our real estate broker says that we will have to go permanente to avoid capital gains when selling a house. Does anyone have first hand confirmation of that? Link to comment Share on other sites More sharing options...
Sonia Posted May 14, 2015 Report Share Posted May 14, 2015 Several clients here in SMA sold their homes and avoided the tax by being a Temporary Resident. Some who only had FMM's went to Laredo, obtained a TR visa for this purpose and they met other criteria (including utility bill and only claim in 5 years) as laid out by notario avoided the tax. Link to comment Share on other sites More sharing options...
Intercasa Posted May 14, 2015 Report Share Posted May 14, 2015 Temporales can avoid capital gains, I have helped them do it with notarios who do not know tax law. Link to comment Share on other sites More sharing options...
MaryPat Posted May 14, 2015 Report Share Posted May 14, 2015 We never had to worry about capital gains as we always lost money when we sold and there was nothing to gain. Sold 3 houses in Mexico, lost money on all of them. Link to comment Share on other sites More sharing options...
holdrja Posted May 14, 2015 Author Report Share Posted May 14, 2015 Thanks Sonia and Spencer, as always! And my condolences, PV Pat. We have the residency proof and it's been over 5 years since we sold any real estate so sounds like it should not be a problem, no matter what permit we hold. We're still planning to go permanente this fall but nice to know there are options open to us. Link to comment Share on other sites More sharing options...
Tomas Posted May 14, 2015 Report Share Posted May 14, 2015 Sounds like you might need a more knowledgeable Realtor...As there are big savings when avoiding the Cap Gains tax...As Spencer states Temp. or Perm. should exempt you from it given you meet the other qualifications...Seek knowledgeable and qualified R.E. personnel and legal advice. Link to comment Share on other sites More sharing options...
snowyco Posted May 14, 2015 Report Share Posted May 14, 2015 Spencer's comments point to the key: What will the Notario for your sale agree to?Some Notarios refuse to approve Residente Temporales for the 5 year homeowner's gains tax exemption. Spencer's point about him educating Notarios on the ISR makes all the difference.Sellers need to find a Notario willing to take the (small) risk of approving Residente Temporales for the gains tax exemption, or enlist Spencer's aid to change the Notario's mind. Link to comment Share on other sites More sharing options...
AlanMexicali Posted May 14, 2015 Report Share Posted May 14, 2015 Spencer's comments point to the key: What will the Notario for your sale agree to? Some Notarios refuse to approve Residente Temporales for the 5 year homeowner's gains tax exemption. Spencer's point about him educating Notarios on the ISR makes all the difference. Sellers need to find a Notario willing to take the (small) risk of approving Residente Temporales for the gains tax exemption, or enlist Spencer's aid to change the Notario's mind. I sold my house in Mexicali in Nov. 2013 and found out, to my surprise, my wife was correct, the buyer gets to appoint the Notaria office to use, not the seller. When I bought a departamento here also the buyer could appoint a Notaria office to use, not the seller. It might be a state law or federal law. I don´t know. Link to comment Share on other sites More sharing options...
Travis Posted May 14, 2015 Report Share Posted May 14, 2015 Buyer chooses notario here, also. It is my understanding that you are FAR more likely to avoid the tax if you're a Residente Permanente. I am considering working for one of the larger Real Estate companies here, and all potential sellers are strongly encouraged to get their Permanente visa before listing the property. If you no longer have a car issue, why on earth wouldn't you? There is no downside. Link to comment Share on other sites More sharing options...
Sonia Posted May 15, 2015 Report Share Posted May 15, 2015 If one does not meet the financial requirement and does not have 4 years, then they can not become a PR. Remember the financial requirements to apply with less than 4 years and from within Mexico are very limited. In SMA only pension sourced income of $2500 / month will qualify you. saludos Sonia Link to comment Share on other sites More sharing options...
Intercasa Posted May 15, 2015 Report Share Posted May 15, 2015 Some notarios will give permanentes the exemption easier but when one reads the tax laws and regulations published the law doesnt differentiate between temporary and permanent and actually they are equal and in certain situations temporales may qualify easier than permanentes. While people may sell for a true loss, less than what they paid, if their deed did not have the real purchase price then they may have a phantom gain. I have been able to convince all but one notary to give temporales the exemption and in that case the client told the notary to take a long walk off a short bridge and switched. Most should agree with me once I review the law with them. Link to comment Share on other sites More sharing options...
snowyco Posted May 15, 2015 Report Share Posted May 15, 2015 Spencer, How does it work to have a 2 pronged approach as a seller: Pair your approach to working with the Notario to correctly apply the ISR, along with getting a Catastral appraisal some years before selling? ... belt and suspenders ...Getting a Catastral (re-)appraisal would seem to get the buyer a more current representative official valuation of buildings/house and property and have a larger net basis when calculating any net taxable gain? I understand that your office helps us get Catastral appraisals, si?The Catastral appraisal is a backup plan, in case the Notario decides that the seller does not qualify for the 5-year homeowners gains tax exemption. The owner/seller pays more in annual (small) property taxes in the meantime, but may save $100,000's at sale time - especially if the property is held by a corporation.Also, I've read the ISR entries in the DOF over the years, and read some State's laws, and I have never seen any mention of a law or rule requiring that the Buyer choose the Notario o Notaria (officina). Have you seen any rules or law governing which party chooses the Notaria / Notario?Even though people have written on internet forums for years that they were "required" to use the buyer's notario, when pushed, in my experience it has turned out that it was only a well-worn old local custom pushed by realtors and their Notario friends. One exception to the free process of choosing a Notario or Notaria occurs when a bank or mortgage company is involved in the sale, and the buyer's bank (or mortgage company) contract-paperwork requires that the bank uses their Notario or Notaria. In those cases, it is not a Mexican Government requirement, but is simply a private legal agreement between the Buyer and their lender. Link to comment Share on other sites More sharing options...
cbviajero Posted May 15, 2015 Report Share Posted May 15, 2015 Even though people have written on internet forums for years that they were "required" to use the buyer's notario, when pushed, in my experience it has turned out that it was only a well-worn old local custom pushed by realtors and their Notario friends.If the buyer is paying for the new escritura it makes sense that the buyer chooses the notario doesn't it? Link to comment Share on other sites More sharing options...
AlanMexicali Posted May 15, 2015 Report Share Posted May 15, 2015 If the buyer is paying for the new escritura it makes sense that the buyer chooses the notario doesn't it? It also makes sense the buyer gets to use his Notario as the seller´s Notario might be persuaded by the seller to commit a fraud of some sort to the sellers advantage. Not unheard of in some places in the past. I have 2 friends who have been victimized by crooked Notarios, sellers, Civil Registars and State Dept. of Justices. One 10 years ago and one 4 years ago. Both lost $85,000 US each plus one paid lawyer fees and lost. The other is still waiting after 4 years for his "escritura".. Ejido beach front lot in Colima. He doesn´t want to talk about it for the last year or so. Link to comment Share on other sites More sharing options...
Intercasa Posted May 15, 2015 Report Share Posted May 15, 2015 While the buyer has the right to choose his notario, the seller has two choices, either put a clause where the capital gains exemption is a condition or agree on a notary before signing the contract and have the notary review the sellers docs and then make the use of that notary part of the contract. Link to comment Share on other sites More sharing options...
snowyco Posted May 16, 2015 Report Share Posted May 16, 2015 If the buyer is paying for the new escritura it makes sense that the buyer chooses the notario doesn't it? Is everything that make sense, automatically the law ? Sensibility and the law sometimes intersect, but sensibility generally does not auto-create itself into legal statutes. . . Spencer's advice both makes good sense and fits the law: While the buyer has the right to choose his notario the seller has two choices, either put a clause where the capital gains exemption is a condition or agree on a notary before signing the contract and have the notary review the sellers docs and then make the use of that notary part of the contract. Link to comment Share on other sites More sharing options...
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