Do you want to buy a vacation home in Mexico? These days, more people are deciding that they want to buy a vacation home or second home in Mexico. The country has a wonderful climate, delicious cuisine, and a rich culture. Plus, if you invest in real estate in Mexico you will always have a nice place to stay for vacations – Here you will learn about Mexican Property Taxes.
Also, if you buy property in a tourist destination, it’s easy to rent out your property as a vacation rental to travelers when you aren’t staying in your home. Since foreign vacationers usually pay higher rental prices in US Dollars, you will receive a much higher return on your investment.
In addition, property taxes in Mexico also tend to be much less expensive than property tax in other countries. If you’re thinking about buying real estate in Mexico, keep reading below for more info about Mexican property taxes.
Mexican Real Estate Taxes
To start with, foreigners can legally own property throughout the country if it isn’t close to the border or along the coast. If the property is situated on the coastline or within 100 kilometers (about 62 miles) from international borders, ownership can occur through a bank trust.
That way, the homeowner will have a direct deed to the property and enjoy the same rights and responsibilities as Mexican nationals. At the time of purchase, the Acquisition Tax is paid which varies in cost by state.
On average, the taxed rates range from under 2% up to 4.5% of the assessed value of the property at the time of purchase. Annually, property tax payments are calculated depending on the real estate value that is established by government officials – Overall, residential property tax is usually around 6.5 pesos per 1000 pesos of the property’s assessed value.
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Predial Payments in Mexico
In Mexico, property tax is called “predial” payments. These payments are used to help fund and operate local government needs. Homeowners that pay their tax before the end of February receive a 10% discount for paying the entire tax early.
To pay your predial bill in Mexico, you need your property account number which is found on the previous year’s property tax statement and also is found in the deed. Next, take the information with you to the local city hall with cash in hand.
Note that if you don’t pay your required property taxes in Mexico, local governments can sell your home through a tax sale process to try to collect delinquent taxes. Also, if a property owner dies, the real estate transferred due to the death is exempt from capital gains, although there is an acquisition tax of 1% to 4% that must be paid by the heirs.
Where To Buy?
In terms of where to invest, top destinations include Riviera Nayarit near Puerto Vallarta and Cabo San Lucas. Each location is well known for beautiful beaches, warm climates, and tons of outdoor activities to enjoy.
Check out Villa La Estancia if you want a low-maintenance vacation home at the beach that comes with resort quality amenities and services. We have luxurious beachfront residences in Nuevo Nayarit which is just north of Puerto Vallarta in Banderas Bay.
In addition, Villa La Estancia also has a lovely property in Cabo San Lucas that has incredible Sea of Cortez views that never quit. Our unique hotel-condo concept property is perfect for people who want to own a retirement home, vacation home, or second home in paradise. Contact us today to see if you are eligible to participate in our Try and Buy Program – It’s the best way to test out beachfront living before you invest.
As you can see, many foreigners that decide to invest in real estate in Mexico find they are able to buy a nicer home than they could afford otherwise. Would you and your family like to own a vacation home, second home, or retirement home in Mexico? If you would, remember to always pay your property tax payments each year as required.
Also, remember if you pay your taxes early before the end of February you will also receive a 10% discount. Without a doubt, owning a vacation home is a great way to have a lovely and comfortable place to create lasting memories with friends and family. Ready to learn more?
Call us at Villa La Estancia today to book a vacation to Mexico and check out our lovely beachfront residences for sale. It’s a great investment if you want to own a dream beach home that comes with all the conveniences of home and then some.
Maybe it’s time you start looking for your dream home in Mexico?
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