Discover the True Cost of Selling Your Property in Mexico
Selling your property in Mexico is a significant step, and understanding the associated costs is crucial. Here are the three primary expenses you should be aware of:
- Real Estate Commission: When you choose to work with a real estate agent, be prepared to allocate a commission ranging from 6% to 10% of the sale price. Additionally, there’s a 16% IVA (Value Added Tax) on top of the commission. The good news is that the full commission paid to your agent can be deductible as an expense when calculating your capital gains, making it a bit easier on your pocket.
- Capital Gains Taxes: Mexico’s capital gains tax can be a significant factor in your sale. The rate is either 25% with no deductions or 35% minus eligible deductions. To qualify for deductions, you’ll need to have residency, an RFC (Mexican Tax ID), and prove that the property is your primary residence. You can only use this deduction once every three years. However, you can also deduct certain costs, including capital improvements, closing costs when you purchased the property, and the agency fee. Just make sure to keep the necessary documentation (facturas) to support these deductions.
- Currency Fluctuations: While properties in the area are often sold in USD, capital gains taxes are calculated in pesos. This means that currency fluctuations can either work in your favor or against you when the time comes to sell. Being aware of this can help you make informed decisions throughout the process.
- Fideicomiso Closing Costs: If your property is held in a fideicomiso (a Mexican bank trust), you can expect an additional cost of around $1,000 USD when closing the trust.
Understanding these costs and planning accordingly is essential to ensure a smooth and profitable property sale in Mexico. Stay informed, be prepared, and make the most of your real estate journey. 🏡💼💰 #RealEstateMexico #PropertySellingCosts #PlanAhead
