Quote:
Originally Posted by Geoff
On the General forum, there is a thread on FM3's and capital gains when selling property. On one post, a link to "La Paz real estate" or some such site presents the following alternative to reduce the capital gains payable by narrowing the gap between value paid and the sale price. This is the first I have seen of this approach. Does anybody know if this is still valid or practicable?
"The other option which is necessary if you are selling a property to bring the value registered in Public Registry to the actual value (Which is to re evaluate the property and bring it up to the sales price) by (this is done with an architect) registering the actual value or market value in the public registry and receiving a document called “manifestacion de construccion” this document when submitted in a closing of the sale of your property will eliminate the capital gain if the value in the document and the sales value are the same, This is an easy process and necessary in most sales as most foreign owned property registered value is way below the actual sales value This is done during “escrow” and is very inexpensive compared to paying capital gains the fees to do this can vary an architect will charge a fee for the paperwork involved and the licenses and permits with public works Costs are from 1500 US to 3500 US depending on the value you are registering."
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We have heard of this practice although I don't know anyone who has actually done it. We try VERY hard in all of our transactions as Buyers Agents to DEMAND that the seller records the sale at full value and accept responsibility for his/her own cap. gains implication. That being said, I have never been a party to a "re-sale" transaction where cap. gains was not a sticking point. Deals are often made privately between sellers and buyers to get the deal done to everyone's satisfaction. The adjustment plan above seems like a good plan in theory. The nice thing about it is that it doesn't hurt anyone...noone is getting ripped off (except perhaps the Mexican govt. being shorted on cap. gains collections.
) My question would be if the documents hold up or fall like a house of cards when the property owner, with his/her adjusted value, is at the closing table again, trying to sell the property. The value on the new catastral will not match the value on the escitura. What then?
Now after all that, we have recieved an advisory that ALL cap. gains exemptions for ALL foreigners will be eliminated in the near future. Regardless of how long you have owned the property, regardless if you have been the sole inhabitant for the entire time you have owned it with all CFE and CAPA bills in your name there will be no exemptions for cap. gains. Sure, make my job harder than it already is.
