|
002028 Visit since
| About
renting out your property | by Prof. German
Estrada
June 11, 2001. | A few months
ago, the Secretaría de Hacienda (IRS) sent a letter to all the Administrators
of Condominiums in Vallarta, asking them to distribute a circular (in English
& Spanish), to ALL the owners of the units in their building, Mexicans and
foreigners alike. This circular contained the following information: Dear
Tax Payer: If you are a physical person actually renting
out or leasing your housing facility such as a Studio, Condo, Town House, Residential
Home or even Commerial space, whether for specific term or on a full-time basis,
you have to register at Hacienda before the Department of the Federal Tax Payer
Registrar - part of the Secretaría de Hacienda y Crédito Público
- as you are subject to certain Tax obligations such as the ones stated below: You
have to keep an Account
Issue Receipts
File provisional Tax Declarations
File Annual Declarations
(among others) If you are
a foreigner residing abroad and renting out or leasing real estate property of
any kind - whether directly or through a third party - you are subject to other
obligations as well.
For further information contact us as soon as possible:
Office in Puerto Vallarta: 224-9505 or 225-3848
Toll free number: 01 (800)
904-5000 or visit our web page at:
http://www.shcp.gob.mx I
would like to add that although this "circular" was sent and received
in Puerto Vallarta, bear in mind that this applies to the Restricted Zone (1)
as well as to the rest of the Mexican Republic. (1) Article
27 of Mexico's Constitution forbids foreign ownership of coastal real estate and
provides restrictions for all foreign ownership elsewhere in Mexico…. While
only citizens and nationals of Mexico may freely acquire real estate in Mexico,
foreigners may be granted the right to own real estate property only under very
specific conditions. The current conditions are contained in the Foreign Investment
Law (2) of the United Mexican States, published in the Official Gazette of the
Federation dated October 27, 1993. The Mexican Constitution
prohibits direct ownership by foreigners of property within fifty kilometers (approximately
31 and one-quarter miles) of the seacoast and one hundred kilometers (about sixty-two
and one-half miles) of Mexico's international boundaries - the prime areas for
retirement and/or vacation homes amd apartments. As noted above, there are laws
to allow or encourage foreign investment throughout Mexico. Foreigners
can have the use of property placed in trust with a Mexican financial institution.
Under such trust agreement, a bank is the trustee, or actual titleholder, of the
property. The foreig buyer is the beneficiary of the trust having all rights to
use, enjoy, and sell the property, but is not considered the legal owner of record
and this exercise of his trust rights depends on the specific wording of the trust
agreement from which he benefits. All trust must have the approval of the Secrataría
of Foreign Relations before final documentation can be delivered to the beneficiary. Note:
the above text has been taken from the US government advice to its citizens which,
being absolutely correct, we're just transcribing. By the way, if you want more
detailed information about this topic and dozens more, you may find them in the
book I recently published, "MÉXICO MAGICO" available at Jamie's
Net House, or by contacting me directly by e-mail. In
several newspapers around the country, long articles dealing with the Taxation
on Rental Properties have been written , as it seems that the Mexican Government
is cracking down on tax evaders (Mexicans and foreigners).
gestrada@pvnet.com.mx
Prof. Germán Estrada is the
author of the best selling book, "México
Mágico: Everything You Wanted To Know About... But Nobody Told
You..." available in Puerto Vallarta at The Net House, Mail Boxes, Etc.,
Books, Books as well as directly from the author by internet. Archives
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