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Q&A About the Fideicomiso in Mexico

There are two options for foreigners who want to purchase Mexican property within the restricted zone (100 km of any national border and within 50 km from the coast) either through a Mexican corporation or by obtaining a fideicomiso.  The fideicomiso is a trust held by the bank, which provides the buyer with all the benefits of direct ownership.  Is the fideicomiso a lease? No, although the term of the trust is 50-year increments, it can be renewed indefinitely. Should I choose one of the larger banks to set up my fideicomiso? No, not necessarily. Since the fideicomiso is not a big part of their...

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An Important Update About Real Estate Acquisition Tax

Purchasing property in Mexico, like any other country, is associated with added expenses during closing. One of the added costs you should anticipate is the acquisition tax, also known as a transfer tax.  Up until this year, the acquisition tax in Playa del Carmen was only 2%, but as of January 2020, the Impuesto Sobre Adquisiciones de Bienes Inmuebles (acquisition tax) has increased from 2% to 3%.   The tax will be calculated at 3% of the assessed value of the property at the time of purchase and is the responsibility of the buyer. This increase affects real estate transactions in Playa del Carmen...

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Predial – Tax Time for Property Owners in Mexico

Purchasing a new house in Mexico? Do not forget the impuesto predial, Mexico’s annual property tax.  SAT - Servicio de Administración Tributaria, also known as The Hacienda, collects the Federal taxes in Mexico. Foreigners should be aware, unlike some countries where the property tax is included and paid by your mortgage company or bank, in Mexico, you are responsible for the property tax at the beginning of each year. You will not receive a bill in the mail; you must make a calendar note to remind yourself of this obligation. Review the invoice at the municipality or online. Confirm that the property location...

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Power of Attorney in Mexico

Power of Attorney- POA in Mexico, like other countries around the world, can be established by granting one or several people sufficient authorization to represent you in one or more acts to be held in Mexico. We recommend that a POA be tailored to whatever your intentions are in Mexico; these can be divided into: Powers of Ownership - Performing acts related to Real Estate. Banking Powers - Performing all kinds of acts related to opening and managing bank accounts. Administration Power - This power will be used for all types of procedures related to any public administration body and even...

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Financial Requirements Increase for Residency Visa in Mexico

If you intend to stay in Mexico for more than 180 days, you will want to apply for a residency visa. One way to qualify for a residency visa is through economic solvency.  The new year brings an increase in the daily minimum wage, and with that increase comes new financial requirements for residential visas in Mexico.  The minimum wage will increase to 123.22 pesos a day. Since the visa requirements are based on the minimum wage, this means the criteria for resident visas will also increase. Please check with the Mexican Consulates in your home town area to compare the financial requirements...

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