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Everything you need to know about buying and selling real estate in Mexico, Puerto Vallarta, and the Banderas Bay region

Owning a Vacation Rental Property in Mexico

Taxes Owed for Rental Income Continued

The law has not changed.  Both residents and non-residents must declare their full income and enforcement will most likely be stricter than ever.  For the non-resident, a Mexican person or entity must be appointed to collect, declare and pay taxes. No RFC is required. The tax is fixed, on the gross, it is a definite tax and no annual declarations need be made. Evasion of tax is a criminal offense. Articles 150 to 178 of the Fiscal Code provide for imprisonment of up to six years for evasion of taxes.  Not only is it a criminal offense but the taxpayer must pay the past due taxes and very substantial interest penalties which amount to 1.3% per month, compounded. 

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Foreign Owners and Income Property

Paying Rental Taxes in Mexico

The ability to pocket undeclared income in Mexico is going away. Tax changes in 2020 have been announced by the government. The press and social media groups are circulating this important information to the expat community. The problem of foreigners who are renting their homes or condominiums and failing to pay Mexican taxes has existed for a long time. NO LONGER. Not declaring income and paying taxes is a violation of Mexican tax law with severe penalties if discovered.

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Supply, Demand & Consequences

Mexican Real Estate

We need to revisit some basics affecting our Puerto Vallarta real estate market at this time. We need to pay attention to supply and demand. For economic purposes, demand must occur before supply becomes important. However, supply usually comes first. It’s uncommon to demand something we can’t imagine the possibility of what we want to buy.

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Buying or Selling in US vs MXN

New Techniques for Selling Real Estate in Puerto Vallarta

The current combination of health and economic issues has affected all real estate markets. Here, we have the advantage of selling real estate within two currencies. Pricing in US dollars is prevalent only in Mexico when these foreigner buyers are strongly interested in selected locations.  Mexican beach areas have historically attracted not only locals as renters and buyers, but also American and Canadian citizens. When more foreign buyers are in one of these markets, the trend has been to accommodate them by pricing the real estate in their currency.

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