Taxes are usually paid in cash and all people are obligated, as provided by law, to pay them to the Mexican government. The Constitution establishes the rights and obligations of all citizens and one of these obligations is precisely the payment of taxes.

Taxes are one of the principal ways by which the government earns revenue to cover the needs of society, such as providing a judicial system, public safety, education, infrastructure (hospitals, streets, roads, public buildings, etc.) and welfare.

In recent years, Mexico has reformed its tax laws due to globalization and international trade, however real estate tax has not undergone major changes because these assets are not subject to international trade and can not be transported from one place to another, in light of this, the tax burden for buying and selling real estate remains basically the same as it has been for many years.

The Mexican Government consists of three levels; federal, state and municipal, people must pay taxes on all three levels when buying and selling real estate. Having briefly explained why we pay taxes, we will now detail each of the taxes that are due when purchasing real estate.

TAXES ON THE PURCHASE OF PROPERTY

In Mexico, the formalization of the sale of any piece of real estate will cause federal, state and municipal taxes, which must be paid by the seller or buyer depending on the tax we are talking about.

At the moment we buy property, we are obligated to pay various taxes:

Federal: 

– Income Tax for acquisition of property. It is generated by the increase to a persons wealth and it is caused when we purchase an asset at a lower price than an official appraisal sets for that asset, provided that the difference is greater than 10%, in this case we have to pay income tax on a rate of 20% calculated on the difference.

– Value Added Tax, VAT. A so called indirect tax due to the fact that it is not the government that collects it but rather the person selling the piece of real property. It is only caused in non housing property and has a rate of 15% of said constructions. Constructions and land on housing properties are exempt of this tax.

– Rights. Rights are taxes that are caused in the 3 levels of government already mentioned. They must be paid in exchange for the services provided by every level of government. For example:

  • Federal – The license granted by the Foreign Secretary for an alien to acquire property in Mexican soil.
  • State – Registration of title.
  • Municipal – Issuing a certificate of good standing.

State (State of Jalisco):

– Business and Legal Instruments Tax. This tax is regulated by the Law of Finance of the State of Jalisco and the Revenue Act of the State of Jalisco, stipulating a charge in 2008 for the transfer of property for the amount of $ 100.00 (one hundred pesos).

It is worth mentioning that this tax is caused by a variety of acts and contracts, noting a percentage according to the type of act or contract of no less than 0.5% and no higher than 1.0% of the value recorded in the act or contract.

Real Estate Tax in MexicoMunicipal:

Asset transfer Tax. (ITP) (also known as Acquisition of Buildings Tax, ISAI), is caused by the transfer of ownership of property, that is, the buyer of a property must pay this tax when changing the record of ownership before the municipality. This tax is regulated by the Municipal Finance Law of the State of Jalisco as well as by the Municipal Income Law in which the property is located, this calculation is carried out according to a rate applied to the value of the appraised property, said appraisal must be approved by the municipal council, the highest rate in each municipality of Jalisco is currently 2.5%.

TAXES ON THE SALE OF PROPERTY

Having stated the taxes caused when acquiring a piece of real property, we will now mention those caused when selling.

The only tax a seller is subject to is income tax. This tax is caused in view of an increase in wealth of the seller when the home was sold at a greater price than it was purchased expressed in Mexican pesos, inflation rates are applied to all amounts in order to be coherent. To said profit, the rate established by law will be applied. The following deductions are authorized

• The updated original cost of acquisition of the property.
• The updated amount of investment in construction, improvements and extensions.
• Notary fees, taxes and rights paid in the acquisition and sale.
• Payments for appraisals.
• Commissions and mediations paid by the seller in connection with the sale.

However, there are cases where the person who has sold his residence lives abroad, meaning that person has no permanent residence in Mexico. This creates different scenarios, for example:

• Income deriving from the sale of real estate found in Mexico is considered income to have originated in Mexico regardless of the place of residence.

• A rate of 25% is applied with no possible deductions.

• When selling real estate through a proxy in Mexico, the seller can apply a maximum rate of 28% if and when the sale is documented through a public instrument.

• The gain will be determined by subtracting from the total income of the sale applying the same deductions mentioned above.

• For this purpose, the representative shall inform the Notary of any corresponding deductions.

• In this case the Notary must calculate the corresponding tax and report it to the authorities.

Real Estate Tax in MexicoExceptions to income tax: Under the federal income tax law, individuals who sell their place of residence are exempt from paying this tax; such exemption applies only if the purchase price is not higher than 1,500,000 UDIS (investment units), which currently is equivalent to approximately 6,260,000 Mexican pesos. If the purchase price is higher, seller must pay income tax on the excess, with certain deductions. If the seller is a foreigner, in certain cases this exemption applies. This must be consulted with a tax expert and discussed with the Notary Public involved.

Finally we would like to point out that you need not worry over tax burdens concerning real estate transactions. Notary Public’s are legal experts with broad knowledge of both the law and tax issues. They will advise you on what taxes must be paid and it will be the Notary who actually reports the tax to the authorities; however, as expressed above, in certain cases an independent tax consultant should involved. 

Robles, Lazo y Gallardo – Law Firm
E-mail: jgallardo@rlg.com.mx

http://www.pvmirror.com/realestate/212/taxinmexico.html

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Punta Mita Amenities

Punta Mita offers ample opportunities to enjoy artful leisure, with stylish gathering places and the finest amenities to energize your body and your spirit. Discover two private Jack Nicklaus Signature golf courses, private beach clubs, a tennis club and fitness center, a collection of boutique shops, private medical clinic, outdoor activities centers, spa services and a club concierge to assist you in planning your perfect way to enjoy all that is offered here. Active-minded residents can enjoy a variety of water sports, from deep sea fishing and diving to surfing and kayaking, as well as land activities that include championship golf, tennis, mountain biking and hiking.


Club Punta Mita has two membership categories, “Resident”and “Premier”. Based on the membership associated with your home or rental property, you will be able to use the following facilities and amenities of Club Punta Mita:

Resident

Premier Golf

Premier Sport

Pacifico Golf Course Tennis Center Residents’ Beach Club Pacifico Golf Course Bahia Golf Course Tennis Center Fitness Center Residents’ Beach Club Kupuri Beach Club Tennis Club Fitness Center Residents’ Beach Club Kupuri Beach Club

Punta Mita Golf

The private Punta Mita Golf Club is open only to Punta Mita property owners and their guests, and guests of Four Seasons and St. Regis Resorts. Members enjoy access to the comfortably appointed clubhouse, which offers dining, bag storage and other amenities. This is the place to meet your friends—and play.

PACIFICO GOLF COURSE

RATED #1 IN LATIN AMERICA - Highly praised by golfers and golfing magazines, this unique championship course inspired Conde Nast Traveler readers to select the Four Seasons Punta Mita as the world’s #1 golf resort. Its “Tail of the Whale,” an optional, par-three 19th hole measuring 199 yards, features the only natural island green in the world. The course plays between 5,037 and 7,014 yards.

Click here to tour the Pacifico course hole by hole.

BAHIA GOLF COURSE

The newest addition to Punta Mita’s golfing achievement, this second Jack Nicklaus Signature Golf Course opened in late 2008 and is as stunning as its sister course. Featuring six ocean holes and playing between 5,180 and 7,030 yards, this championship course rolls through the property of the St. Regis Resort, and among the communities of El Encanto, Porta Fortuna, and La Punta Estates. The challenging and undulating fairway and green complexes offer a wonderful counterpart to Pacifico for golf afficionados.

Click here to tour the Pacifico course hole by hole.

The Punta Mita Residents Beach Clubs

The intimate Residents’ Beach Club at Kupuri offers an additional gathering place, exclusively for the use of Premier Members and their guests to socialize and enjoy the recreation and scenery of Litibu bay.

Facilities at Kupuri include an oceanfront swimming pool surrounded by sun chairs, men’s and ladies’ restroom and changing areas, and a shade palapa for casual lunch dining.With its broad sandy beachfront and clear shallow waters, is ideal for swimming and water activities.

Light lunch dining and beverage service is currently available at the Kupuri Palapa Pavilion, daily, from noon to 5pm.

Sufi Ocean Club at Porta Fortuna

With gorgeous views across Banderas Bay and the lovely Punta Mita Pier, the Sufi Ocean Club elevates the beach club concept while maintaining a breezy, casual vibe.

A large, sparkling saltwater pool is the centerpiece, with wooden cabanas and daybeds, outdoor showers and access to the Pier and beach. The aesthetic throughout is boho chic in a tranquil setting.
 
From the beach, enjoy aquatic adventures courtesy of Punta Mita Ocean Sports, where the team of professional athletes has curated water sports, lessons and experiences specifically for Premier Club Members and their guests. The club also features a pop-up boutique with beach-glam looks and accessories perfectly paired with Punta Mita days or nights. Guests can relax to a DJ and enjoy incredibly fresh dining options from the new Sufito Cevicheria Bar, as well as perennial favorite, Sufi Restaurant.

The St. Regis Beach Club

The St. Regis Beach Club offers special access to owners and their guests to Punta Mita.

The Sea Breeze Beach Club at the St. Regis Punta Mita Resort is a stunning setting to enjoy a day at the beach, provisionally available for the enjoyment of the Club Punta Mita Members and their guests, via a year-to-year access agreement.

Located on one of the most beautiful beaches in the peninsula, it features both a large swimming pool and beachfront with sun chairs and pool butler service, the acclaimed Sea Breeze Restaurant and Bar and — for casual, on-the-sand dining — the Mita Mary Seafood boat. With signature St. Regis service to pamper you, the Sea Breeze Beach Club is a favored place in Punta Mita. It also features the Punta Mita Expeditions Ocean Activities outpost, with onsite paddle-boards, wind-surfers, and boats to take you fishing, surfing or snorkeling/diving.

Pacifico Beach Club

Club Punta Mita offers a full range of ocean activities through our Ocean Activities Center at the Pacifico Beach Club.

Paddle off the beach with a kayak. Take a stand-up paddle board lesson. Experience our Marine Snorkel Safari. Scuba dive the Marietas Islands National Park. Join the whale watching tours. Go spearfishing in the blue. You will find the Ocean Activities station conveniently located near the pool area at the Residents’ Beach Club. They will be more than happy to arrange all types of expeditions.

TENNIS & FITNESS CENTERS

The Tennis Club at Punta Mita offers a variety of surfaces with world class mentors ready to keep you active.

TENNIS

FITNESS

A variety of fun and exciting tennis activities await at The Punta Mita Tennis Club. Managed by Four Seasons and Peter Burwash International, the recently expanded Punta Mita Tennis Club offers 10 courts – a combination of hard surface and synthetic grass courts—lighted for evening play. In addition, enjoy an apparel and equipment shop as well as men’s and women’s locker rooms. The Premier Fitness Center, for Club Punta Mita members, features Technogym® cardiovascular and machine weight equipment that allows a comprehensive fitness regimen. Men’s and women’s locker and shower areas allow for a relaxing finish to your workout, leaving you refreshed and energized.
 

OCEAN AND ADVENTURE ACTIVITIES

Punta Mita is much more than golf. Enjoy a world of water sports and deep surfing culture along the coastline.

Nestled between the lush jungles of the Sierra Madre Mountains and the deep blue of the Pacific Ocean, this extraordinary peninsula offers a breathtaking coastline, an inviting seaside playground and a natural magnet for all kind of aquatic and land adventures.

The sparkling waters, pristine beaches, coral reef and occasionally rocky coast inspire a host of delightful experiences: sport fishing, sea kayaking, whale watching, surfing, sailing, diving, spearfishing, snorkeling, swimming with dolphins, horseback riding and mountain biking.

Club Punta Mita offers a full range of ocean and outdoor activities, many of which are provided by our Ocean Activities Coordinator located at the Residents Beach Club and at Sea Breeze Beach Club.