New Laws – Buying Property in Mexico

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Our purpose at Own Mexico is to share our own experiences to help prepare you for your future purchase in Mexico.  Many foreigners are already benefiting from an investment in their lifestyle by owning property in Mexico.   Whether you are a seller or a buyer we have some new rules we need to share with you to ensure a smooth upcoming transaction.

As the world turns governments are constantly creating new rules to improve processes and systems.  On July 4, 2014, the Secretary of Hacienda and Public Credit, the Mexican version of Revenue Canada or the IRS, issued a miscellaneous fiscal resolution that as of September 1, 2014 will affect all buyers and sellers of real estate in Mexico, regardless of their nationality. 

In short, the purchaser must provide, at closing, proof of a CURP (Clave Unica de Registro de Población, similar to a Social Security Number of Social Insurance Number) and a RFC (Registro Federal de Contribuyentes or Taxpayer ID Number) in order for the costs involved to be tax-deductible in the future for the party that is purchasing the property.

The current criteria of the local notaries so far is to insist on having both buyer AND seller show proof of the CURP and RFC in order to fully complete the receipt or CFDI, since it is the notary public that will issue the tax-deductible electronic receipt (CFDI or Comprobante Fiscal Digital a través de Internet),

What does it mean for you?

If you are buying or selling real estate after September 1, 2014, you will need to have both the CURP and the RFC.

Foreign nationals need to have either a temporary residency or permanent residency card, as well, it is a precursor to obtaining the CURP. (Those with a tourist visa are not being allowed to request a CURP).

If you do not have a residency permit you must apply for the card at the nearest Mexican Consulate in your home country and it should not take more than a few days. The card that you are issued should show the CURP. Once you have your CURP, you can apply for your RFC online. I would strongly recommend having a local accountant help you in order to make sure that the information you are providing is correct. He/She can walk you through the process and coordinate the appointment to finalize the procedure.  If you do not think your accountant can help you please contact us and we can recommend someone for you.

Although these procedures can be done online, you will eventually have to be present in Huatulco to register your residency permit with the local immigration office and to pick up the proof of your RFC at the local office of the tax authority (SAT). As a result, it is recommended to allow yourself time in Mexico for these things to be completed when planning your closing dates.

Your residency and tax ID number will give you an identity in Mexico and will make certain procedures are more streamlined and efficient.  I have both my temporary residency and my RFC and relied on professionals to help me through the process.  With the help of professionals I found the process to be completely streamlined and hassle free.

This new regulation was passed this summer and is now in effect.  As with any new law, we expect that there could be changes as it is gradually implemented.  The reason behind this is to ensure fiscal transparency in all purchase sale operations for everyone – both national and foreigner alike. I will keep you informed of any subsequent modifications in these regulations.