Selling

When you buy a property in Mexico, you’ll be presented with a range of ‘closing costs’ in addition to the property price; these costs usually range between 5% and 10% of the property’s sale price.  When you eventually come to sell your Mexican property, the buyer will pay most of the closing costs, but there are some selling costs and taxes you will need to account for.

 

There are three main types of costs when you’re the seller:

  • Selling fees

  • Legal fees

  • Taxes

Selling Fees

 

It’s possible to market and sell your property without the services of a local realty agent; however, the fee you pay the agent is usually worth the money; in addition to the risk-free marketing you’re given, agents provide a valuable conduit between the negotiations, and undertake considerable paperwork and project management to bring a property sale to successful completion.  Some of the advantages of using a qualified real estate agent are:

Legal Fees

 

In Mexico, the role of the Notary Public is paramount in property transactions.  A Mexican Notary Public is a legal professional with very important statutory roles.  The fees for the Notary Public are paid for by the buyer.  Some buyers also choose to hire a lawyer, which can add several thousand US dollars to their fees, but this is not necessary for most transactions. If the property you are selling is held in a Bank Trust (fideicomiso), then you will also need to budget for a ‘trust cancellation fee’ that is levied by the bank; the amount varies, but you should budget for around US$1,000 to cover this.

Taxes

 

Taxation on residential property sales is a complex area of Mexican tax law and every case will be slightly different depending on the circumstances.  Also, keep in mind that tax laws are subject to reform and because house purchases tend to be long-term investments, the tax laws which apply today might apply entirely, in-part, or not at all when you come to sell your property years from now.

Legal Fees

 

In Mexico, the role of the Notary Public is paramount in property transactions.  A Mexican Notary Public is a legal professional with very important statutory roles.  The fees for the Notary Public are paid for by the buyer.  Some buyers also choose to hire a lawyer, which can add several thousand US dollars to their fees, but this is not necessary for most transactions. If the property you are selling is held in a Bank Trust (fideicomiso), then you will also need to budget for a ‘trust cancellation fee’ that is levied by the bank; the amount varies, but you should budget for around US$1,000 to cover this.

Taxes

 

Taxation on residential property sales is a complex area of Mexican tax law and every case will be slightly different depending on the circumstances.  Also, keep in mind that tax laws are subject to reform and because house purchases tend to be long-term investments, the tax laws which apply today might apply entirely, in-part, or not at all when you come to sell your property years from now.

These are the key principles of residential property taxation in Mexico and these guidelines are intended to help you compose an estimate of the taxes you will be expected to account for when you sell a residential property in Mexico.  You should seek professional advice from a Notary Public and/or tax accountant in Mexico to get a detailed appraisal of your situation. Note also that if you are not a Mexican National then you might also be liable to taxes in your home country and you should seek advice from a tax accountant there, too.