Real Estate in Mexico

[Michele]

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."

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.

[Tesla 573]

You will pay Capital gains even if you have your FM3 and you live there for 2 years?

[Michele]

Originally Posted by Tesla 573

You will pay Capital gains even if you have your FM3 and you live there for 2 years?

That's the plan. No exemptions at all.

[Tesla 573]

Originally Posted by Michele

That's the plan. No exemptions at all.

Where can I find out more about this?

[Michele]

Originally Posted by Tesla 573

Where can I find out more about this?

Whoever your AMPI representative is here in Playa will have the information by now. Your attorney SHOULD know as well.

[Tesla 573]

Originally Posted by Michele

Whoever your AMPI representative is here in Playa will have the information by now. Your attorney SHOULD know as well.

Thanks Michele I have an attorney and we've just finished the closing process recently but what is AMPI?

[Michele]

Originally Posted by Tesla 573

Thanks Michele I have an attorney and we've just finished the closing process recently but what is AMPI?

AMPI is the Mexican equivalent of a Realtor [insert registered trademark symbol here] in the US and Canada. This organization governs the actions and activities of Real Estate professionals in Mexico.

[Geoff]

My concern is that I did declare a lower value a number of years back because it really was the way to do things in Mexico. Tax issues were not a big concern then because the lawyers and notaries twisted things anyway they wanted. Over the last couple of years things seem to have tightened up significantly.

What I don't understand is that I have a private contract that has been notarized that shows the real higher value that I paid for the property. Why can this not be shown as the purchase price instead of the false declared price. One is supposed to pay tax on the real gains. I paid good (actually excessive) money for the services of notary so this document should be considered legit. Has anyone been in the situation where they have tried to present a private contract as the indicator of the price paid?

[Yoda]

I have one more question to add.... If a foreigner (Canadian) is purchasing previously Ejido land that has been converted to private land, and is also the first name to appear on the new title, is Title Insurance still recommended? Or will the review of the title that the Notary Public performs essentially deem the title clear?

[Michele]

Originally Posted by Yoda

I have one more question to add.... If a foreigner (Canadian) is purchasing previously Ejido land that has been converted to private land, and is also the first name to appear on the new title, is Title Insurance still recommended? Or will the review of the title that the Notary Public performs essentially deem the title clear?

In my personal opinion, if you (a foreigner) are buying RAW LAND that is not part of a subdevelopment or established neighborhood (by this I mean a lot in Playacar, Playa Magna, Sirenis, Sacbe, Rancho Mayab or similar), even if you have the first title, I would recommend getting the insurance. If you are purchasing beachfront property in Puerto Morelos, Tulum or in the Biosphere it is a must!! If you are buying a piece of land and you CAN'T get title insurance on it, for whatever reason, think again. Fair warning.

[Michele]

In response to numerous inquiries from friends and customers, today I will be starting a series, reoccurring monthly, of construction updates via actual photos of projects going up in and around Playa del Carmen! Many of you have already purchased pre-construction property here in the area and are now back at home, no doubt, wondering what the heck is going on with your money! Well, here you go! At the beginning of every month, I will visit various properties in progress, take pictures and report back.........

Playa del Carmen Construction Update - Issue 1

[mfl*s queen]

Michele, I would be very interested in project Vaiven, which is taking over the jungle on the west side of phase II, by the Ooxo. Our condo backs up to the jungle, and when we puchased it, of course, we were told that it was protected, and no one would build on it. RIGHT!! When we were there last month, they were starting to clear the jungle.

This is a wonderful idea, and much work on your part. I am sure it will much appreciated by all.

[Michele]

Originally Posted by mfl*s queen

Michele, I would be very interested in project Vaiven, which is taking over the jungle on the west side of phase II, by the Ooxo. Our condo backs up to the jungle, and when we puchased it, of course, we were told that it was protected, and no one would build on it. RIGHT!! When we were there last month, they were starting to clear the jungle.

This is a wonderful idea, and much work on your part. I am sure it will much appreciated by all.

Protected jungle???? Ha, ha, ha....don't be silly.

Just kidding. I don't mean to be flippant but you know how it goes here. He with the most $$$ wins. I did not know that area was supposed to be forever green, but I wouldn't be surprised.

I am meeting with the developers of Vaiven next week for an update and marketing material. We know them well so I should have a good update to report on.

[mfl*s queen]

Originally Posted by Michele

Protected jungle???? Ha, ha, ha....don't be silly.
Just kidding. I don't mean to be flippant but you know how it goes here. He with the most $$$ wins. I did not know that area was supposed to be forever green, but I wouldn't be surprised.
I am meeting with the developers of Vaiven next week for an update and marketing material. We know them well so I should have a good update to report on.

Yes, I know that $$$ talks there. I guess I can kiss my privacy on my back terrace good-bye?

That would be great!! We are very concerned about how close they are going to be to the back of our Condo, and how many of the trees are going to go. We are also very curious as to what they are going to do with the HUGE hole that exist not too far in from our Condo? Certainly wouldn't want to purchase a Condo in that area if they are just going to fill it in, and build on it?

[Maverick69]

Great idea Michele.