If you are a foreign citizen thinking of buying real estate in Mexico, then you might be wondering about the taxes. Keep reading to learn more about Mexican tax rates, the actual rates paid by an individual, and the tax exemptions you can claim while living in Mexico.
Do you pay real estate taxes in Mexico?
The short answer is yes you do pay real estate taxes in Mexico.
How much is tax do you pay on real estate in Mexico?
Property taxes in Mexico are generally much lower than they are in the U.S. This is because the Mexican government does not attempt to raise a lot of revenue from taxing property.
It’s not unusual to see annual property taxes of $100 or less, and they almost never run higher than about $300. They are paid once a year.
Property taxes in Mexico vary throughout the country and are calculated yearly depending on the real estate value established by the officials.
How much are property taxes in Tulum Mexico?
Taxes in Tulum are generally quite low. On a $265,000 property, you might be looking at $400 per year. Condo fees vary but tend to be less than what you would pay in the U.S.
How much is property tax in Playa del Carmen?
The real estate tax in Playa del Carmen is 0.25% of the assessed value. This is determined at the time of sale. For example, you can expect to pay $100 USD per $100,000 USD of assessed value yearly.
How are property taxes paid in Mexico?
If you own real estate in Mexico, you are responsible for paying a tax called predial, which is similar to an U.S. property tax.
You can pay the predial in advance (for 12 months) with a discount, or you can pay it every two months for the two preceding months.
In the latter case, you will receive a bill (boleta). Payment can be made by bank transfer, in cash to the local tax office, or by debit or credit card.
Do you pay land taxes in Mexico?
The tax varies depending on the state, but it isn’t a significant amount. Because the tax is levied on the registered value of the property, which tends to be low, not corresponding to market value.
Do retirees pay taxes in Mexico?
Retirees may still be required to file a tax return if they reside abroad. For example, if you retire in Mexico, you will need to report income just as you would if you lived in the U.S., since you still may be considered a “resident alien.”
How do I avoid capital gains tax in Mexico?
You may be able to avoid paying capital gains tax when you sell your property. Provide proof that the property is your principal residence.
This exemption applies to foreigners who have resident status in Mexico, and of course Mexican nationals.
You are best to seek advice from a specialist in Mexican property tax to get a clearer picture on this matter.
What happens if you don’t pay property taxes in Mexico?
If you fail or decide not to pay your property taxes in Mexico, you could face fines, legal action, and even deportation.
These taxes are paid monthly to SAT Servicio de Administración Tributaria and can be electronically filed. You may have an accountant or property manager take care of the paperwork for you.
How do you pay property taxes when you are not in Mexico?
You can pay property tax electronically or you can arrange to have someone do it for you in Mexico. Either way, there is a way you can do it if you are not in Mexico for some reason.
