Buying Real Estate in Mexico, all you need to know!

[grotton]

Maybe this was covered and I missed it but when buying a house in Mexico, what is the best way to transfer the funds from US bank (Bank of America) to Mexico to complete the transaction? We plan to open a mexico Bank account upon our arrival in September.

[DNP]

Originally Posted by grotton

Maybe this was covered and I missed it but when buying a house in Mexico, what is the best way to transfer the funds from US bank (Bank of America) to Mexico to complete the transaction? We plan to open a mexico Bank account upon our arrival in September.

Consider opening an account at a branch of BoA in Mexico. Talk to them about it. Talk to BoA in the US. too. Most important, talk to your Notario in Mexico about it. As I recall, the monies for the purchase are placed in something like an escrow account and released to the seller at "closing".

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[grotton]

I need a little clarification on taxes paid by foreigners when selling a house in Mexico. I have been told different things on the matter. I have been told that if a house is owned and lived in for five years whether owned by a Mexican national or a foreigner, the sale is not taxed. I have also been told that any house sold by a foreigner is taxed at 25% of its value regardless of how long it has been owned and the person who told me this also insisted it was paid on the total sales price, not just the capital gain which sounds strange. A third person advised me that there is not tax paid on the sale of the house after five years and suggested that I purchase the house either entirely in my name or entirely in my partners name because then we can purchase a second property in the other persons name and avoid taxes on two properties (sorry if I'm being confusing.) Do the rules change from state to state or are they consistent country wide?

[Souper]

What did your notario tell you?

[makaloco]

My understanding is that individual notarios have quite a bit of discretion in determining if a foreigner is exempt from the tax. Some sources say a home with market value under about $250K USD is exempted. Others say $500K. A couple of years ago, enforcement was tightened, so that in most cases the home has to be lived in for five years as one's primary residence. Some notarios are interpreting that as the owner holding FM2/Inmigrante status or equivalent. With the new immigration law (and new government officials), it's unclear what will happen.

I believe there are two options for the taxation basis. One is a percentage of sale price, and the other a percentage of the difference between purchase price and sale price. If you've made improvements to the home, they have to be documented with facturas, "manifestación de obra", etc. Here's an article from a couple of years ago that may help:
Mexico Cracking Down on Capital Gains Tax

[cuylers5746]

Hi Tommygyn;

Just a quick question? Can a foreigner now buy property within 40 meters of a navigable waterway or lake?
That used to be in the old law from back in the 1970's. Has that now been removed?

[TundraGreen]

Originally Posted by cuylers5746

Hi Tommygyn;

Just a quick question? Can a foreigner now buy property within 40 meters of a navigable waterway or lake?
That used to be in the old law from back in the 1970's. Has that now been removed?

Within 50 km of the coast or 100 km of a land border, foreigners are not allowed to buy property. It is kilometers, not meters, but maybe you knew that and just mistyped. Within those distances foreigners can get a bank to hold the property in trust for them. It is called a fideocomiso. Having a fideocomiso is like owning, you just have to pay the bank a maintenance fee to hold the trust for you. They are long term, I don't know exactly how long.

[djscottyis]

I bought land within 50 kms of beach federdal zone from a company call Merida Realty. we had to set up a mexican corporation but it went through with out a hitch. Our properyy is now been started to be built. So viva la mexico. there website is very help full

[ranchocostaverde]

Originally Posted by TundraGreen

Within 50 km of the coast or 100 km of a land border, foreigners are not allowed to buy property. It is kilometers, not meters, but maybe you knew that and just mistyped. Within those distances foreigners can get a bank to hold the property in trust for them. It is called a fideocomiso. Having a fideocomiso is like owning, you just have to pay the bank a maintenance fee to hold the trust for you. They are long term, I don't know exactly how long.

The terms last 50 years and can be renewed in the last year of each term.

[miltiano32]

Originally Posted by djscottyis

I bought land within 50 kms of beach federdal zone from a company call Merida Realty. we had to set up a mexican corporation but it went through with out a hitch. Our properyy is now been started to be built. So viva la mexico. there website is very help full

How long did it take to set up your Mexican corporation? I have read in other sources it takes from 1-3 months

Just seeing how your own experience was with this type of thing.