Monessen Posted June 21, 2016 Report Share Posted June 21, 2016 I am a permanente resident who is thinking about renting out one of my houses. I do not want to run afoul of the Mexican tax office. Do I have to register somewhere or do something to legally charge rent for a property I own? I am a full time resident of Mexico. Link to comment Share on other sites More sharing options...
LaChula2 Posted June 21, 2016 Report Share Posted June 21, 2016 If you register and pay taxes, you are are doing the right thing. In San Miguel Allende a few years ago, several landlords got busted because they were not paying taxes. Link to comment Share on other sites More sharing options...
dave0415 Posted June 21, 2016 Report Share Posted June 21, 2016 Spend a few pesos and talk this over with a Mexican Accountant and or lawyer. I have always understood that there is no VAT if the house is rented unfurnished but you need expert input and who am I to know Link to comment Share on other sites More sharing options...
El Saltos Posted June 21, 2016 Report Share Posted June 21, 2016 You a) Must register with Haciends (SAT) and b( Immigration, advising them that you are operating a business, and c)File taxes quarterly. Spencer's office can assist you with these things. Link to comment Share on other sites More sharing options...
Monessen Posted June 23, 2016 Author Report Share Posted June 23, 2016 Thanks for the replies. Yes, I was planning to rent in pesos. I live here permanently and it would be too much of a hassle to get into USD checks or cash and trying to either bank the money or exchange it. Trying to figure out the exchange rate in pesos would be too much of a problem for lazy me. I do wonder, Ajijic_Hiker, why you ask. Just wondering...not a loaded question or anything like that. My friend Rony of this board has introduced me to a Mexican accountant who is familiar with this topic and he will guide me through the process at a minimal monthly fee. Thanks, El Salto, for the reminder to let immigration know about my collecting rent. Through no fault of my own I was approached by them about owning a store here (???I do not and never did!!??) and it was a bit of an experience showing them that I had nothing to do with the store. In fact, the Mexican store owner couldn't figure out why or how I got on their radar. It turned out ok but made me realize that, in spite of what my gringo friends told me, Immigration from Guadalajara does in fact sometimes show up at your residence unannounced to check your immigration status and card and, at least in my experience, brings a "paddy wagon" with them. I hope that it was some kind of "show of force" but it was unnerving for both me and my neighbors to see the wagon and two uniformed Immigration officers spend nearly three hours with me checking out my residence (inside and out on the street) and calling in the Mexican store owner to provide his license, citizenship card, store paperwork, etc. Yikes! Link to comment Share on other sites More sharing options...
ComputerGuy Posted June 24, 2016 Report Share Posted June 24, 2016 Another way of looking at paying rent in pesos, is that the amount stays at what you agree upon. I rented in dollars before and watched my rent go up - up - up vis a vis pesos. Link to comment Share on other sites More sharing options...
mudgirl Posted June 24, 2016 Report Share Posted June 24, 2016 Be aware that a house you rent out will not be exempt from capital gains tax when you decide to sell it. Link to comment Share on other sites More sharing options...
Sonia Posted June 24, 2016 Report Share Posted June 24, 2016 As noted, register with SAT; inform INM and wait for approval (it is not automatic); INM will need your cedula as well (your personal square scanning code issued by SAT); obtain an accountant. For receipts etc: http://www.soniadiaz.mx/etc..html saludos Sonia Link to comment Share on other sites More sharing options...
Intercasa Posted June 24, 2016 Report Share Posted June 24, 2016 The tax rates are not that bad, better to comply and support the Mexican economy. Here is an example of how little taxes are if you rent your home. Assuming you rent your home for 24,000 pesos a month. You can deduct expenses or get a straight 35% deduction which is 7,700 pesos leaving you with a taxable net of $14,300 pesos which you will pay tax of 1,945 pesos income tax (ISR). You are still clearing 22,000 pesos. There are tiered tax brackets starting at 1.92 percent and rising with income here in this example part is paid at 23.52% tax rate at the highest and the tax rates cap at 35%. You can also write off the property taxes along with the 35%. Link to comment Share on other sites More sharing options...
mudgirl Posted June 24, 2016 Report Share Posted June 24, 2016 1 hour ago, Intercasa said: The tax rates are not that bad, better to comply and support the Mexican economy. Here is an example of how little taxes are if you rent your home. Assuming you rent your home for 24,000 pesos a month. You can deduct expenses or get a straight 35% deduction which is 7,700 pesos leaving you with a taxable net of $14,300 pesos which you will pay tax of 1,945 pesos income tax (ISR). You are still clearing 22,000 pesos. There are tiered tax brackets starting at 1.92 percent and rising with income here in this example part is paid at 23.52% tax rate at the highest and the tax rates cap at 35%. You can also write off the property taxes along with the 35%. My information is that one has to pay also IVA and occupancy tax? Link to comment Share on other sites More sharing options...
Intercasa Posted June 27, 2016 Report Share Posted June 27, 2016 IVA is paid on furnished rentals. Some can get into the incorporacion fiscal scheme and if done right pay even less. Occupancy state tax would be if short term. Link to comment Share on other sites More sharing options...
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