When the time comes to sell your house or real estate property in Mexico, as in all things, it is best to be prepared. While it is nearly impossible to know every contingency that can come up during the process of selling the property, the following information can help you estimate how much money the seller and the buyer will need to pay in closing costs of a Mexican property.
Buyers
Buyers of the property will usually have the lion’s share of the closing costs in a transaction. A foreigner buying property within 50 kilometers of the coast or 100 kilometers of a border will have to either purchase within a fideicomiso (bank trust) or move the property into a fideicomiso. Setting up a fideicomiso costs a bit more than assuming the ownership within an existing one. The setup fees for a fideicomiso will be approximately $1750 USD, with about $650 USD going to the bank, and the remainder going to the Mexican government. In addition, the fideicomiso costs for yearly maintenance is about $650 USD per year (paid to the bank).
In addition, the buyer of the property pays the attorney who oversees the sale. In Merida, Yucatan, this fee runs about $1500 USD.
The buyer is responsible for the Purchase Tax or impuesto de adquisicion. This cost is 2.5% of the purchase price in most of Merida, but at the Yucatan Gulf Coast, the tax rises from 3% for places like Progreso and Chelem, up to 4% for Telchac Puerto.
Lastly, the buyer will also be responsible for various fees related to recording the sales and appraising the property. These fees are approximately $600 USD.
AN IMPORTANT ISSUE
The Purchase Tax and other taxes discussed below are based on the value of the property. Other fees, such as lawyer’s fees and bank fees, may also be based on the purchase price. Therefore, the stated “purchase price” is an important factor. As you can imagine, the seller is best served by keeping the stated purchase price as low as possible. You might imagine that the buyer would be served by that as well. However, the buyer must keep in mind the eventual sale of that same property. If the buyer’s purchase price is very low when they buy the property, they may find themselves paying a higher amount of capital gains tax when they go to sell the property. Your attorney and notario will work with the seller and the buyer to establish the correct price to be stated in all paperwork.
–Carol Kirby Williams, Owner
WHITE CITY PROPERTIES
www.whitecityproperties.com
carol@whitecityproperties.com
Calle 37 #519 x 62 y 62A
Colonia Centro, Merida, Yucatan 97000
tel. 999 920 7644 (o)
cel. 999 134 7885
