TAX OF PROPERTY OWNERS IN MEXICO
As a foreigner purchasing a new house in Mexico, it is important to be aware of the tax of property, Mexico’s annual property tax. Unlike some countries where the property tax is included and paid by your mortgage company or bank, in Mexico you are responsible for the tax of property at the beginning of each year. You will not receive a bill in the mail; you must make a calendar note to remind yourself of this obligation.
The tax is typically paid in one lump sum at the beginning of the year, but some municipalities will allow you to pay it in quarterly installments. If you are unsure of how to calculate or pay your tax of property, you can consult with a law firm specializing in Mexican real estate. Failure to pay your property tax can result in steep fines, so it is important to be familiar with the requirements before purchasing a home in Mexico.
When you purchase property in Mexico, it is important to review the invoice at the municipality or online. Confirm that the property location and title deed name match. Also, make sure the Cuenta Catastral the property tax account number, which you will provide to the municipal property tax authority to obtain your yearly Property Tax Assessment, matches the account number on your deed. If you have any questions about your Property Tax Assessment, you can contact a law firm specializing in tax law in Mexico. They will be able to advise you on the best course of action.
In Mexico, property taxes are based on the cadastral value of the property, which is typically much lower than the actual resale value of the property. However, it is still against the law to undervalue your property in order to save on taxes. If you are caught cheating the system, you could be subject to fines or even jail time.
Additionally, when you go to sell your property, the capital gains tax will be based on the actual resale value of the property, not the cadastral value. As a result, you will end up paying more in taxes than if you had just paid your fair share from the beginning.
It is important to stay up to date on your property tax in Mexico. We recommend paying in December or January to take advantage of municipality discounts. Check with your municipality to find out what discounts are available. There are also discounts available for INAPAM cardholders and persons with disabilities.
If you live outside of Mexico, you may have your property manager, lawyer, or accountant make the payment, but do make sure you get a proof of payment. Keep the receipt from the property tax in a safe place, along with the title deed. This will help you avoid any complications down the road.
Property tax is a tax that is charged on the ownership of real estate property by the government. The tax is usually based on the value of the property, and it is paid by the owner of the property. In Mexico, property taxes are significantly lower than in most foreign countries. This is because the tax is based on the cadastral value of the property, which is typically much lower than the resale value of the property.
However, some people try to cheat SAT by registering the property at a lesser value in order to save on property taxes. This may seem like a good idea at first, but it will catch up to you when you try to sell the property. The capital gains tax on the sale of a property is based on the difference between the purchase price and the sales price. If you have registered your property at a lower value in order to save on taxes, your capital gains will be higher, and you will end up paying more tax on the sale of your property. It is always best to consult with a LawInCabo before trying to cheat SAT.