If you’re interested in selling property in Mexico but you’re not one hundred percent sure how to do it, you’re at the right place. Here I’ll tell you everything you need to know about selling your property in Mexico, from the Mexican real estate laws you need to understand to the step by step process you need to sell your Mexican property in a short time.
Selling property in Mexico can be a great opportunity for foreign investors looking to make a profit on their real estate investments. Among the many destinations in Mexico, Playa del Carmen is a highly sought-after location for property ownership, with its beautiful beaches, lively culture, and attractive real estate prices. However, navigating the country’s real estate laws and regulations can be daunting for foreigners looking to sell their properties.
While Americans are familiar with real estate laws in America, they often wonder if Americans can own a property in Mexico and this can make the process of selling your home in Mexico slightly more complicated. In this article, I will focus mainly on providing guidance to foreign property owners looking to sell their properties in Mexico. I will examine the legal and financial aspects of the selling process, including the rules and restrictions that foreigners need to know. I will also give you tips and techniques to sell your home in Mexico much faster.
Ready for selling property in Mexico? Read on to find out how!
Ready to sell your house in the Riviera Maya? Let me help you!
The documents you need for selling property in Mexico
When it comes to selling property in Mexico, especially in the Riviera Maya, our team of in house lawyers at Engel and Volkers plays a crucial role in ensuring a smooth transfer of legal ownership from the seller to the buyer.
The seller must provide certain documents to our lawyers, which are necessary to complete the transfer of ownership. In this article, we will discuss the essential documentation that the selling party needs to provide to the notary public during the property selling process in Mexico.
The first and most important document will be your Official Identification
Mexican citizens can provide their IFE or passport as their official identification, while foreigners are required to present their passport.
Cadastral Certificate
This document includes details about the property such as the size, government-assessed value, and other relevant information used for calculating the annual property tax. Selling property in Mexico is impossible without this extremely valuable document.
Last Property Tax Receipt
When selling property in Mexico, it’s important to note that property taxes are paid annually by April. Our team of lawyers will require a copy of the last property tax receipt, which should correspond to the present year of the sale of the property. Most states in Mexico offer discounts for early payments, such as 25% if paid in December, 15% if paid in January, and 10% if paid in February. It’s important for sellers to ensure that they have the most recent property tax receipt to avoid any delays in the selling process.
What are the top questions to ask your real estate agent?
Apart from these very important papers, the list of following documents will also be necessary for selling property in Mexico:
Certificate Free From Liens and Encumbrances
Certificate of No Liability Property Taxes
Certificate of No Liability Water Services
Certificate of No Liability State Works
Certificate of No Liability City Works
If you’re ready to sell your property in the Riviera Maya and you want to work with a team of lawyers that can help you get all these papers without any stress, contact me today! When it comes to selling your property in Mexico, my team and I will take you through every step of the process to help you successfully close the sale of your property in the Caribbean.
Discover more about Mexican Real Estate laws here!
The closing costs and fees associated with selling property in Mexico
Selling property in Mexico can be a complex and challenging task, which is why it’s crucial to seek the assistance of a professional closing service to ensure a smooth and hassle-free process. As a seller, it’s essential to calculate all expenses related to the transaction and comply with Mexican real estate laws to present a feasible offer. Moreover, anyone interested in selling property in Mexico should consider seeking professional help from a real estate team with expertise in Mexican real estate laws to navigate the process successfully and avoid any legal complications or pitfalls. Therefore, having a good understanding of Mexican real estate laws is crucial for both buyers and sellers in Mexico’s real estate market.
Important factors that need to be considered in the final price of the transaction when selling property in Mexico are the closing costs and the capital gain taxes.
To determine the total funds required to close a real estate transaction in Mexico, buyers must factor in the closing costs, in addition to the down payment. Compared to the United States and Canada, closing costs in Mexico are slightly higher, but yearly property taxes are relatively low. Typically, closing costs in Mexico range between 6% and 8% of the purchase price, but they can vary depending on several factors, such as the property’s location (e.g., historic city versus beach location), the buyer’s citizenship, the bank used to set up the trust, the type of trust (whether a new trust is being set up or the existing one is being transferred), and the notary being used.
Given the complexity of these factors, it’s essential to seek professional guidance from a trained real estate agent and a reputable closing company. They can provide valuable advice on negotiating the terms of the transaction and ensure that all legal requirements, including Mexican real estate laws, are met.
It’s important to note that certain fees are paid upfront for services provided by third parties, such as the appraisal, notary deposit, trust permit, and trust set up fee. The buyer typically pays the closing costs, while the seller is responsible for paying the capital gains tax and sales commissions.
To avoid any surprises or unexpected expenses, it’s recommended to request a good faith estimate from the closing company upfront and have a real estate agent review it. Overall, by seeking professional guidance and understanding the factors that influence closing costs in Mexico, buyers can navigate the process smoothly and make informed decisions.
Ready to sell your property? Find out how I can help you!
Selling property in Mexico – capital gains tax
While the buyer typically pays the closing costs in Mexico, the seller has to pay the commission for the real estate agents and the capital gains tax.
This tax is calculated based on the difference between the purchase price and the sale price of the property. The amount of the tax varies depending on various factors, such as the seller’s citizenship, residency status, and the length of time they have owned the property. In general, the capital gains tax in Mexico ranges from 20% to 35% of the profit earned from the sale of the property. It’s important to seek professional guidance and consult with a tax specialist to understand the tax implications of selling a property in Mexico.
Selling property in Mexico requires careful consideration of the country’s tax laws, which are complex and subject to change. Each case is unique and will depend on individual circumstances, making it essential to seek professional guidance to navigate the process successfully. It’s also important to keep in mind that tax laws applicable at the time of purchase may not apply when the property is sold, especially given the long-term nature of real estate investments.
The Notary Public is responsible for calculating the taxes due on the sale of a residential property in Mexico and withholding the amounts for direct transfer to the Mexican Treasury. Notaries are fully liable for ensuring that tax laws are followed, certifying sellers’ eligibility for exemptions and deductions to reduce their tax liability. As such, it’s crucial to work with a reputable notary and seek professional advice to ensure compliance with Mexican tax laws.
If you want to learn more about buying your dream home in the Riviera Maya, have a look at all my articles on the topic:
- Buying a Home with a Fideicomiso in the Riviera Maya
- Pros and Cons of buying a property in Mexico
- Mexico Real Estate Laws – The best overview
- Will the demand for homes in the Riviera Maya continue to increase?
- How to sell your home in the Riviera Maya
- Top questions to ask your real estate agent before buying a house in the Riviera Maya
- The advantages of buying a home in the Riviera Maya
- A complete guide to relocating to Playa del Carmen – Houses, services and everything you need to know
- Best Playa del Carmen Condos for Sale – 4 tips to land the best Condo
- Playa Del Carmen Luxury Villas
- Luxury Villas Tulum
- Luxury Villas Cancun
- What are the risk of buying real estate in Mexico?
- HOA Mexico – How the homeowners association works in Mexico
