Are you thinking about buying a vacation home in Mexico? Or, do you plan to move to Mexico and want to find the perfect retirement home at the beach? Either way, investing in property in Mexico is generally a great idea. The country has an excellent climate, delicious cuisine, and a rich culture. In addition, investing in real estate in Mexico comes with various economic benefits as well. For example, if you buy property in a tourist destination you can easily rent out your property as a vacation rental to travelers. Plus, foreign vacationers will often pay higher rental prices in US Dollars so you receive a much higher return on your investment. Property taxes in Mexico also tend to be much less expensive than property tax in other countries. If you’re considering buying real estate in Mexico, keep reading below to learn more about Mexican property taxes.
Owning Real Estate in Mexico
In Mexico, foreigners can legally own property through a bank trust if the property is along the coast or within 100 kilometers (about 62 miles) from international borders. Otherwise, foreigners can hold direct deeds to properties and enjoy the same rights and responsibilities as Mexican nationals. When you purchase a property, The Acquisition Tax is paid and this level of tax varies in each Mexican state. In general, the rates range from under 2% up to 4.5% of the assessed value of the property at the time of purchase. Therefore, property taxes in Mexico vary throughout the country. Each year, the property tax is calculated depending on the real estate value as established by government officials. In general, residential property tax tends to cost about 6.5 pesos per 1000 pesos of assessed value.
Predial Payments in Mexico
Mexican property taxes are also known as “predial,” and the tax payments are used to operate local governments. Also, homeowners can receive a discount for paying the entire tax early. In Mexico, homeowners that pay their predial or property tax payment by the end of February are eligible for a ten percent discount. In order to pay your predial bill in Mexico, you need your property account number which is located on the previous year’s property tax statement or in the land deed. Then, you need to go to the local city hall with cash in hand. If you don’t pay property taxes in Mexico, local governments can sell a home through a tax sale process to try to collect delinquent taxes. If a property owner dies, the real estate transferred due to the death is exempt from capital gains, but there is an acquisition tax of 1% to 4% that has to be paid by the heirs.
Mexico is a great place to invest in coastal real estate and many foreigners are able to buy a more luxurious home than they could back home. In terms of where to invest, top destinations include Puerto Vallarta, the Riviera Maya, and Cabo San Lucas. Each location is well known for beautiful beaches, warm climates, and tons of outdoor activities to enjoy. Are you hoping to buy a vacation home, second home, or retirement home in Mexico? If so, make sure to pay your property tax payments each year as required to stay on top of your finances. Owning a vacation home is a great way to have an amazing space to create lasting memories with loved ones. Also, remember to pay early to receive the 10% discount for predial payments received before the end of February. Maybe it’s time you start looking for your dream home in Mexico?
About Lemuria Real Estate
Ideally situated on Puerto Vallarta’s exclusive South Shore, Lemuria Residences is a new luxury condominium complex that belongs to a Master planned community designed by the prestigious Gensler Global Architecture firm. The ecologically planned themed property includes more than 1700 acres of preserved Sierra Madre jungle with stunning views of the mountains and Banderas Bay. The outstanding onsite amenities include multiple pools, BBQ areas, restaurants, a 2000 square meter spa, Sports Club, gym, tennis courts, pickleball courts, organic herb garden, and yoga spaces. There are also freshwater rivers and private hiking trails located nearby so it’s the ideal place to invest if you want to be close to nature. Contact Lemuria Residences today to learn more about our luxury beachfront condominiums for sale in Puerto Vallarta.