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

Your Purchase And Sale Price Are Recorded In Mexican Pesos

Currencies and Real Estate in Mexico

Now that I have your attention:

I want to explain some concepts which I hope will make the experience of buying and selling Mexican properties more understandable.

You, as a seller can agree to receive the proceeds of a sale in Mexican pesos, US or Canadian dollars, or any currency.

However, taxes and expenses to sell are going to be computed and collected by the country assessor or notary of the country where the real estate is physically located.

Some markets are so popular with foreigners that the real estate is priced in the currency of the largest foreign purchasing group. An example is The Bay of Banderas where US dollars are used for many properties.

This means you may need to convert your own money, say Canadian, into US dollars to buy a condo you want in Zona Romantica.

Your belated surprise is learning later that the entire transaction price, which is recorded in your escritura, is in Mexican pesos. And this is what it should be.

When you record prices of real estate sales, you use the currency of the country where the property is located. This country, for many reasons, should and does use the value of the asset to collect taxes and track the economy of buying and selling to arrive at costs and profit.  Labor prices, cost of goods, supply and demand of materials, depreciation, appreciation: all are in Mexican pesos to evaluate the health of the economy.

Direct foreign investment still is converted to the value in Mexican pesos.

The US dollar is very strong today and you may receive an average of 19 pesos for every US dollar paid.  Your US dollar goes further in purchasing power, and you receive more pesos when you sell a US dollar.

The condo purchase price is $100,000 USD between buyer and seller. This price will be recorded in the amount $1,900,000 Mexican pesos for the buyer.  He will receive an encrypted file from the Mexican IRS which will give him his official value in pesos. (CDFI)

You, as the seller can receive your profit in US dollars or whatever currency you wish. Your reported price of what you sold for will be also in the amount of $1,900,000 Mexico pesos.

Let’s imagine that three years from now you want to sell, and you want to receive back US dollars. You can do this. But if you owe capital gains tax, you will have to find out, after adjustments for currency differences, if you owe tax or not.

Do you have a gain or loss?

This will be determined in the peso rates recorded from your prior purchase and your current sales price.

In 2022 you sell in a seller’s market and receive $120,000 USD for your condo. The US dollar is weaker, and Mexico is making more money, so the peso is stronger than today.  The stronger peso is 12 pesos to the US dollar.  Your sale will be recorded at the Mexican pesos price of $1,440,000 MXN.  This is less than the recorded price you paid in 2019 of $1,900,000 MXN.  You do not have a gain.

But let’s say in 2022 you need cash and you are in a buyer’s market and have to take $85,000 USD to sell.  The peso is still at 12 because overall, Mexico’s economy is strong and not tied to the tourist real estate market. Your sale will be recorded at $1,020,000 MXN.  You still do not have a gain.

Or the US dollar is 19 pesos and your sale is still $85,000 USD, or now $1,615,000 MXN.  You do not have a gain based on the strength or weakness of the peso compared to the US dollar. You originally paid $100,000 USD and you ¨lost¨ money.  You lived in the property 3 months a year for 3 years and you did not have a gain to owe ISR or capital gains tax.


If you sell when the US dollar is still stronger than the day you bought, you will receive more pesos and have a taxable gain.

If you sell when the US dollar is weaker to the pesos than when you purchased (say the peso is now 15 instead of 18), you will have a loss.

So, for recording and tax purposes, you should imagine you went to the cash exchange house and bought pesos with your US or Canadian dollars. When you sell your condo, you will go back to the exchange and receive the rate exchange of the day in US dollars.

All real estate sales transaction will have the benefits of deductions and in some cases, partial exemptions for the sellers.


This article is based upon Flex MLS reporting, legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his own due diligence and review. If you have any other questions, contact me through my website.

Harriet Murray



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