MEXICAN PROPERTY TAXES

American Media has often focused on crime in Mexico. So the question that comes to mind is Cancun
dangerous, is your family safe in Cancun?  Is it prudent to invest in Cancun? 

Crime is a world wide fact. In many US Cities there is one murder each day. Mexico border towns and
drug trafficing centers are places to be avoided. The state of Quintana Roo, where Cancun is located
has a crime that is a fraction of any US City of similar size.

Why is this so? Some point to Cancun's strict gun control laws which make it near impossible to own 
a hand gun. Of the violent crimes committed in Cancun each year most of these crimes are domestic crimes.

Crime follows the drug traffic. That is why Mexico's and US border towns are so lawless, these towns are the major intersections where vast amounts of drugs cross the US Border.  Cancun on the other hand is not on this drug tansportation route so it does not have the violent crime associated with other Mexican Cities.

The most dangerous elements in Cancun are the Sun, the Sea and the traffic. Use common sense
don't swim in rough conditions, protect your skin from the sun. If you are going to use alchol take a bus, don't drive.

A crowed bus can be a pickpockets favorite target. Keep your valuables safe. Enjoy Cancun a relatively safe city and probably a safer city than the US City you call home.

 

Caribbean Murder Rates
By Robert Curley , About.com
 
According to the latest statistics, Jamaica has the fifth-highest homicide rate in the world, with 49 murders per year per 100,000 people, trailing only Iraq (89 per 100,000), Venezuela (65 per 100,000), El Salvador (55.3 per 100,000), and Honduras (49.9 per 100,000).
Other destinations in the Caribbean region with murder rates higher than the United States include:

 

While in the USA property taxes will vary by state but are often in the range of 2 - 3%, in Mexico, taxes are generally 0.2% - 0.3% thereby saving you 10 times what you would pay in the USA on yearly property taxes.

Income taxes

• If you work in Mexico and receive income from a Mexican-sourced income, you will need to pay personal income tax in Mexico and file a Mexican tax return each year.
  
  If you are a United States citizen or a US green-card holder, you must also file a tax return in the United States, if your income (all your income worldwide, not just your US income or Mexican income alone) exceeds a low minimum threshold (see your tax professional or the IRS to find out the threshold for your filing status); however, the United States has agreements with most countries, including Mexico, so that you won't be liable for double taxation (in other words, you would not pay taxes twice).
  
  Also, your first $75,000 should be exempt from US federal income tax (this varies from year to year, so again check with your tax professional or the IRS .) We advise you to consult with your tax advisor on these matters, and preferably with an international tax planner in your home country.
  
  Sales Tax/Value-added Tax
  Value-added Tax (IVA, or Impuesto al Valor Agregado) adds 10- 15% to the cost of most goods and services in Mexico.

Inheritance & Gift Tax

• Mexico does not charge an estate or inheritance tax; however, gifts of real estate, if they are not gifts to your husband, wife, or immediate family, may be taxable, with the tax to be paid by the recipient of the gift. Please consult with your tax advisor before making a gift of your Mexican real estate.

Transfer Tax

• Property that's transferred, sold, donated, subdivided, merged with another property, or placed in trust, is subject to an Acquisition Tax of 2% of the assessed value of the home.

Capital Gains Tax, or ISR (Impuesto Sobre la Renta)

• When buying property, the seller pays the Capital Gains Tax, or ISR, unless the buyer has agreed to do so. The Mexican Notario (Notary Public) will advise you of the amount. If you sell your Mexican home, you are not liable for Capital Gains Tax provided the home has been your primary residence for at least the past two years.
  
  Otherwise, you are liable for Capital Gains Tax at a rate of 20% of the declared value of the transaction, or 40% of the net gain on the sale of the home, less the value of improvements made, commissions paid, and certain other allowable deductions.

Rental Income Tax

• If you rent out your property, but reside outside of Mexico, your rental fees are taxable at a rate of 21% in Withholding Tax. If you rent out your property but do reside in Mexico, your rental fees are taxable at regular personal income tax rates.

Can I as a Mexican Foreigner, purchase property within the restricted zone under a Mexican corporation entity?

• It depends, if you want to acquire property for residential purposes you are recommended to acquire via a bank trust. If you want to acquire property for commercial purposes you are recommended to acquire via a Mexican Corporation with certain procedures and requirements.

If I live in Mexico, and earn money down in Mexico, what obligations do I have in regards to USA or Canadian Taxes?

• If you live in Mexico and you receive revenues earned in Mexico, you are required to pay taxes only in Mexico. Such taxes include Income taxes and VAT. Mexican Corporations (Personas morales) pay approximately 28%, Personal Income taxes (Personas fisicas) pay approximately 17% up to 28% depending on your tax classification. VAT has a current rate of 15% (except for some tourist cities and states which is at 10%).

If I live in Mexico, and earn money from my USA / Canadian operations, what obligations do I have for Mexican Taxes?

• If your revenue source is generated from USA/Canada, then you are required to pay in the respective country. The taxes you are required to pay in Mexico will be based on the difference of these tax rates. If the tax rate is higher in Mexico, than that difference will be due in Mexico. If the Mexican tax rate is below that of Canada or USA, than no extra taxes are due in Mexico.

Once I resale my property investment, what obligations do I have when returning the monies back to my home country?

• Once you have paid taxes in Mexico on the sale of your property, and you take the monies to your home country, you are allowed to credit all previously paid taxes of Mexico. This avoids any double taxation between the countries.

If I rent out my house or condo in Mexico, what Mexican taxes am I obligated to pay?

• Mexican income taxes are due depending on the total income generated. There are allowances allowed for deducing expenses via official invoices called "facturas". The tax rates vary from 17% up to 28% depending on your tax classification.