Legal and Fiscal Aspects of Investing in Real Estate in Mexico
Investing in real estate in Mexico requires a detailed understanding of the legal and tax aspects that govern these types of transactions.
From a legal standpoint, it is essential to conduct thorough due diligence before any purchase. This includes verifying the legal status of the property, making sure there are no liens or legal problems, and confirming that the seller has a clear and legitimate title to the property.
In addition, the purchase must be formalized before a notary public who will be in charge of registering the property in the Public Registry of Property, therefore, it is also advisable to have the advice of a lawyer specializing in real estate to avoid possible legal complications.
About Taxes
Regarding fiscal aspects, investors should be informed about the taxes applicable to real estate transactions in Mexico.
When acquiring a property, the Real Estate Acquisition Tax (ISAI or ISABI), which varies according to the state of the Republic where the property is located, must be paid. In addition, if a property is sold, the seller is subject to Income Tax (ISR) on the capital gain obtained. And Value Added Tax (VAT) must also be considered for commercial properties.
For foreigners, there are restrictions on the purchase of real estate in certain areas of the country, known as restricted zones, and may require the creation of a trust with a Mexican bank to make the purchase.
Complying with these regulations and tax obligations is essential to ensure a legally sound and tax-efficient investment in the Mexican real estate market.
