Whenever we get to the topic of buying, I always provide tips for perspective buyers. At the top of that list is listing the property that you will be purchasing at the full value in the deed.
For many, this sounds obvious. However, for those that have been dealing in Mexican Real Estate for some time know that it used to be a common practice to list the property's sale for far lower than what you are actually paying for the property.
It was tax fraud then; it is tax fraud now. Mexico has definitely caught on to this practice and changed the laws so that the onus is on the buyer to report the correct amount or be subject to possible penalty.
Furthermore, when you eventually sell your property, it is unlikely that you will find a buyer that is foolish enough to do the same and you will be stuck with a capital gains tax on a false gain that was not actually realized.
The exception to this rule is when you are buying a property that is furnished, because the value of furnishings is not required to be listed in the recorded purchase price.
For example, I am buying a house that is listed, fully furnished, for $400,000.00 USD. The value of those furnishings is established at $30,000.00 USD. So, the recorded value of the property would be $370,000.00 USD. The $30,000.00 USD would be treated as a separate transaction for the used contents that are onsite.So, the moral of this lesson is: List at full value when you purchase!
Those of you who received this post via email, some embedded items -- like videos -- cannot be seen. You will need to click the title of the blog to be taken directly to the post to view the full content.
Twitter and Facebook Readers can view the original post and leave comments at: PuertoMorelosBlog.com.
Amber Pierce-Schulz is the Broker/Owner of Mayan Riviera Properties, specializing in Puerto Morelos Real Estate and Puerto Morelos Vacation Rentals. We are members of AMPI and Federally Certified Realtors.