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Save receipts or get your bank account locked


ea93105

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Bancomer has locked my account from being able to receive any more deposits because I withdrew over one million pesos in a year and I don't have receipts to prove I didn't funnel the money to a cartel or something.

I was remodeling a house that year and didn't bother so save whatever receipts I did have, and a lot of it was cash payments for labor.

So now I have to close that bank account and open another one....

fyi

 

 

 

 

 

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22 hours ago, ea93105 said:

I was remodeling a house that year and didn't bother so save whatever receipts I did have, and a lot of it was cash payments for labor.

How will you prove that you paid for improvements when it comes time to sell? Without it I think any appreciation will be taxable.

Don't know, just curious.

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37 minutes ago, AngusMactavish said:

How will you prove that you paid for improvements when it comes time to sell? Without it I think any appreciation will be taxable.

Don't know, just curious.

They can sell the house without capital gains type taxes if they lived in it. Taxes, if due, are based on selling price not on appreciation. 

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2 minutes ago, Mostlylost said:

They can sell the house without capital gains type taxes if they lived in it. Taxes, if due, are based on selling price not on appreciation. 

To be more precise, here are the rules.  As article states, it's up to the Notario to calculate. 

https://www.mexperience.com/the-costs-and-taxes-of-selling-property-in-mexico/
 
February 6, 2019
The Costs and Taxes of Selling Property in Mexico

Taxes on the Sale of Residential Property in Mexico
Taxation on residential property sales is a complex area of Mexican tax law and every case will be slightly different depending on the circumstances.  Also, keep in mind that tax laws are subject to reform and because house purchases tend to be long-term investments, the tax laws which apply today might apply entirely, in-part, or not at all when you come to sell your property years from now.

These are the key principles of residential property taxation as of the date of this article, and guidelines here are intended to help you compose an estimate of the taxes you will be expected to account for when you sell a residential property in Mexico. (Different tax rules and rates apply when you sell commercial property.)  You should seek professional advice from a Notary Public and/or tax accountant in Mexico to get a detailed appraisal of your situation. Note also that if you are not a Mexican national then you might also be liable to taxes in your home country and you should seek advice from a specialist tax accountant in that respect, too.

Tax Calculations

Taxes due on the sale of residential property are calculated by the Notary Public, who also withholds these amounts for direct transfer to the Mexican Treasury.  The tax law makes each Notary Public fully liable for taxes due, so they will absolutely ensure that the rules have been followed and certify that sellers qualify for any exemptions and deductions they are claiming for tax relief.

Capital Gains Tax: Mexico applies a capital gains tax on residential property of 25% on the gross sales value of the transaction without any deductions OR between 1.92% and 35% on the value of the gain (purchase costs less allowable exemptions and deductions): the percentage is calculated on a sliding scale in relation to the gain and we recommend you assume 35% as residential property sales with a gain above $250,000 pesos (c.$13,000 US dollars) will be subject to this rate.

One-Off Exemption: A one-off exemption is available under Article 92, Fraction XIX a) of Mexican Income Tax Law that reduces the tax liability for many family homes, although you and the property must meet certain criteria to qualify for the exemption:

you must be resident in Mexico* with a Mexican tax ID (known as a RFC, or Registro Federal de Contribuyentes); and
the property you’re selling must be your primary residence; and
the land subject to the sale must not exceed three times the size of the construction on that land (measured in square meters); and
you can only claim this exemption once every three years.
The flat-rate exemption is the peso equivalent of 700,000 UDIs; the value of UDIs fluctuates and you can get current UDI exchanges rates on the Bank of Mexico website. At the time of writing, 700,000 UDIs equates to approximately $4.37 million Mexican pesos, and you can deduct this amount from the sales price if you qualify.

If the same home is properly co-titled with your spouse or other family member and they are resident in Mexico* with a Mexican tax ID, and the house is their primary residence too, you can deduct an additional 700,000 UDIs in their name.

The exemption is not automatic: you must qualify, and you must prove the qualification.  Talk to your Notary Public about how to arrange this and what you need to do to present the necessary records for proof.

* Mexican income tax law does not expressly state whether the foreign person selling  a property must have temporary or permanent residency status to avail themselves of capital gain tax exemptions; it does, however, expressly state that the seller must be selling his/her primary residence in order to qualify for tax exemptions on capital gains.  The Notary Public dealing with the matter will interpret the law; some will apply the capital gains exemptions only if the seller has residente permanente status; some Notary Public offices may apply the exemptions to foreign residents with residente temporal status.  You can read about the differences in these two residency statuses on our Mexican visas and immigration page.

Deductions for Capital Improvements: You can deduct the costs of any capital improvements (e.g. building extensions, new flooring, swimming pools, new rooms) while you owned the property, as well as some closing costs commonly incurred when purchasing a home.  You need official receipts — in Mexico, these are known as ‘facturas’ — for all services and building work to claim these allowances when you sell, so be sure to take advice from your Notary Public on how to account for these—and follow it. Any capital improvements made using a firm or builders who didn’t issue you with facturas for the work cannot be deducted.  Maintenance and home improvements, like remodeled kitchens or new bathrooms, do not count as capital improvements.

The Exchange Rate Effect: In most towns and cities across Mexico, home prices are quoted in Mexican pesos when they are offered for sale. However, a few places and most notably in Los Cabos, Puerto Vallarta, San Miguel de Allende, Ajijic/Chapala, and Cancun/Riviera Maya, home prices are often seen quoted in US dollars.  Even though the transaction may be quoted in dollars, the deed will show the amount in Mexican pesos at the exchange rate prevalent on the date of the closing. Any capital gains are calculated only in Mexican pesos and therefore, shifts in the exchange rate can affect the capital gain calculation as expressed in a foreign currency. Read Exchange Rates and Capital Gains on Your Mexican Home to understand how foreign exchange rates can influence capital gains calculations on property in Mexico, because your tax liabilities when you come to sell are calculated in pesos, not dollars.

Non-Residents
If you are not a resident in Mexico and/or you don’t have a Mexican tax ID, you cannot claim the one-off exemption explained above, although you can claim qualifying deductions, so long as you have the official receipts (facturas) to prove the expenditures which can be deducted.

Your Notary Public is Key
The Notary Public (in Spanish, Notario Público) is the most important professional person you will deal with when you buy and sell property in Mexico.  Don’t rely on hear-say and instead get the Notary Public to assess your individual situation and the taxes that will likely apply to it. When you’re buying property, talk with the Notary about what you need to do to plan your estate efficiently, how to structure your arrangements, and how to keep the proper records you need to ensure that when you come to sell your property you (or your heirs) are prepared. Every property transaction has its own quirks and unique characteristics; cultivating a good relationship with your Notary Public is a crucial aspect of successful property investment in Mexico.

 

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As I recall they need to have lived in the house for 3 years and must have permanent residency of citizenship status to claim the capital gains exemption.  There are also value limitations.  In some cases the local notarios will accept Residente Temporale status to claim the exemption.

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1 hour ago, oregontochapala said:

They have proven themselves to be my favorite and I have found them to be very customer friendly, more so than any U.S. bank (credit unions not included).

I've banked with them for four years and have not paid a peso for their excellent service and use of a BBVA credit card.

The rules regarding the movement of large sums of money apply at any bank, in all countries, for obvious reasons. Don't blame the bank for not knowing and abiding by the rules.  

I've been happy with BBVA and don't really blame them for their policy ( which I was not aware of ) and my post was to inform those who may also not know, hence the FYI

I was relying on the capital gains waver every three years (discussed above)  when deciding not to save receipts.  I will continue to use BBVA until my balance runs out. Debit card and credit cards still work.

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