Realtor Brad Hermes Educates Americans on Buying Property South of the Border
Houston, TX (PRWEB) December 01, 2016 -- Some U.S. citizens believe they cannot legally purchase property in Mexico. “However, this is not true,” said Brad Hermes, of KW Luxury Homes International and an affiliate of Del Mar Real Estate, the exclusive real estate division of Mexico’s premier private residential community Del Mar Los Cabos. “Ownership of real estate in Mexico is via a Mexican land trust called a ‘fideicomiso’. The trust has a term of 50 years and can be renewed in perpetuity to allow for long-term control of the asset.”
For Americans considering buying property in Mexico, Hermes lists the following five tips:
No. 1: Utilize a trustee bank. Much like living wills or estate trusts in the U.S., the Mexican bank, or trustee, takes instruction only from the beneficiary of the trust (the purchaser). The beneficiary has the right to use, occupy, lease and possess the property, including the right to build on it or otherwise improve it.
No. 2: Purchase title insurance. “I strongly recommend buying title insurance for the property you purchase in Mexico,” stressed Hermes. “Keep in mind, however, that just because you have a trust does not ensure you have free and clear title. Title insurance is a necessity.”
No. 3: Understand property tax in Mexico. There are two taxes people will pay when buying a home in Mexico. The first is the Acquisition Tax (ISABI), which is 2% of the total registered purchase price and is paid upon purchase. The second is Property Tax (PREDIAL), which is very low in Mexico. Property tax is not based on the purchase price; it is based on the property tax value assigned to the area in which the property is located and the size of the property.
No. 4: Know how capital gains tax is calculated. “The notary will calculate the seller’s capital gains tax based on the purchase price, in Mexican pesos, at the time of acquisition. This information is indicated on the deed of title,” added Hermes. “The notary then adds to the seller’s original purchase price the cost of any construction or remodel as well as the closing costs the seller paid at the time of purchase. After applying annual inflationary credit and construction depreciation factors, the resultant cost basis is determined. The notary then determines the capital gains tax (ISR) by subtracting the cost basis, as well as the sale’s commission from the sale price, to obtain the ‘gain,’ which is taxed at 35 percent.”
No. 5: Obtain a visa. “Every person entering Mexico is obligated to obtain a tourist visa for up to 180 days,” concluded Hermes. “If people wish to stay or live indefinitely in Mexico for periods longer than six months, they must apply for a visa at the Mexican consulate in their home country. In order to purchase property, the buyer is obligated to have legal immigration status in Mexico.”
About Brad Hermes, KW Luxury Homes International
Brad Hermes, a member of the Institute of Luxury Home Marketing Specialists, has been selling Houston’s finest homes since 1995. KW Luxury Homes International is based on a simple guiding principle that a client’s comfort and luxury should never be compromised. For more information, please call (713) 816-3200, or visit http://www.bradhermes.com. The office is located at 5050 Westheimer Road, Suite 200, Houston, TX.
About the NALA™
The NALA offers small and medium-sized businesses effective ways to reach customers through new media. As a single-agency source, the NALA helps businesses flourish in their local community. The NALA’s mission is to promote a business’ relevant and newsworthy events and achievements, both online and through traditional media. For media inquiries, please call 805.650.6121, ext. 361.
NALAPR, Executive Business Services (theNALA), +1 8056506121 Ext: 361, [email protected]
Share this article