Buying property in Mexico good resource

[cvchief]

Mike,

Are you talking just about people who do it on their own or does that apply to people who use the rental managers? Don't they collect taxes?

 

[merganser1]

Good points on taxes...

To be clear,........ a lot of units are rented and they all pay the hotel tax of 14% on all rentals. We certainly pay our taxes in Mexico every year. So from a tax standpoint we are compling with Mexican tax laws. We also report all income on a K1 in the U.S. to the IRS.

Bottom line.... it is not worth running the risk to avoid paying taxes in Mexico or the U.S.

 

[CZMDM]

CVChief I am sure about the aspect that applies to those who offer their property directly to renters. From what I have read this is a very high number. The local gov promises that soon there will be a lot of investigations on this matter as there are a couple of dynamics at work. 1) The Mex gov wants people to pay their legal obligations and do not want people making money here that are not documented to do so 2) locals who do rentals are pushing for the gov to crack down as locals are tired of jumping through hoops and paying taxes (and foreigners pay an extremely high tax rate as opposed to local nationals), while people who live elsewhere make a profit, have no corporation and pay no taxes. So a lot of locals that are in this business are pressing the local gov to take action against these types of renters and from what I hear personally there are a lot of locals reporting illegal renters to both immigration and hacienda. It's kind of hard for them to hide when there are dozens of them with ad's on such websites as Trip Advisor and they have no work permit or tax documentation of any kind. Actually it was TA and it's Cozumel rental page that was shown and discussed in the local media.

As far as a management company.......I am not positive about that whole deal. I do know that some property mgmnt companies comply with tax laws and on the other hand I know that a rental must have a corporation, but beyond that I am not sure. I would certainly check with a local lawyer if I was going to rent a property.