Mexico Real Estate

Find out how to protect your good faith deposit and Mexico Earnest Money.

Your ready to buy your piece of paradise, but handing money over to someone you don t know in a foreign country is a scary proposition. So how do you protect yourself from a fraudulent situation

Purchasing property in the Cancun real estate market and even in all regions of the Mexico real estate market is a quite different process than in many other countries. And when it comes to handing over deposit money, many buyers make the mistake of leaving their good judgment at home; thinking this is Mexico and this is how business is done here.

Most of those trustworthy buyers have purchased without problem, but there is always a risk. It is not necessary to have a Mexico Real Estate license to sell propeties So it is important to know who you are dealing with and how to protect your interests.

Mexico Escrow Services

Although not widely used in Mexico, escrow services are available through well know US companies and should be your first choice. There is a fee, but the protection it offers is well worth the extra expense.

Escrow is mostly used for re-sales but the property owner must be in agreement This can sometimes be an obstacle as some Mexican owners do not understand the concept of escrow. In most cases the listing broker can convince the owner if it is properly presented.

Mexico Broker

This would be the next option only if the property owner will not accept escrow deposit. Either the listing broker or the buyer s broker holds the deposit. This is more of a risk, so ask for references and DO CHECK THEM.

Mexico Developer

Most developers will not accept escrow deposits as they use incoming funds for construction. Deposits may be refundable or non-refundable (before the contract is signed) so do ask. It is important to work with a broker that you trust to present you with projects by developers with a proven track record.

The Mexico Property owner

It is customary for the initial deposit to go directly to the owner in the case of a re-sale. This is very risky and I do not recommend this situation. If unavoidable, do so in conjunction with your OWN Mexico real estate lawyer, following his advice so he can make sure you are legally protected.

TOP Mexico Real Estate NETWORK; "Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!"

Region:  Playa del Carmen Real Estate  Thomas Lloyd Graduate from Purdue University Business School with a degree in Management/Financial Option Investment.  He has been living, investing, and working in Mexico for over 15 years.  A Mexican certified & licensed realtor, he is the current president of TOPMexicorealestate NETWORK     "Our experience at work protecting your interests"  (512) 879-6546.

A couple of weeks ago, we had an interesting question be sent to our panel of experts The seller of a property wrote to ask,

Q. “What happens when I make some profit on the sale of Mexico real estate, we paid the Mexico capital gains tax, do we still need to pay taxes on the capital Gains in my home country too

A. Linda Neil from Linda Neil Properties in the La Paz real estate region advises the following “If you have property in a Mexican bank trust it is necessary to file a form annually with the US IRS and, yes, the profits or losses from the sale of your Mexican property must be declared on your US return. It is important, however, to obtain the tax declaration made in Mexico to be presented with your US return to obtain a credit or deduction for the Mexican tax paid.”

A. Ivan Castillo regional director and practicing Mexico real estate lawyer from Stewart Title answers” I m not an expert on taxes out of Mexico, nevertheless I don t think there is double taxation. If you pay Capital Gains in M xico and it is properly documented, the receipts can be used in the US in order to avoid paying taxes again.”

A. Cozumel Capital broker/owner Rita Sheese who works in the Cozumel real estate market outlines the following about these taxes “If a property in Mexico is sold, the capital gain realized by the seller (whatever nationality) is subject to Mexican capital gains tax. Then, the American seller when declaring that income in the states, would also declare the taxes that were already paid on this capital gain in Mexico Formal tax treaties exist between the US and Mexico to avoid the taxpayer paying double tribute, and so what you have already paid in Mexico will essentially be deductable from what is due in terms of US capital gains tax.

For more reading material click here Mexico Real Estate Questions and Answers

TOP Mexico Real Estate NETWORK; "Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!"

Region:  Playa del Carmen Real Estate  Thomas Lloyd Graduate from Purdue University Business School with a degree in Management/Financial Option Investment.  He has been living, investing, and working in Mexico for over 15 years.  A Mexican certified & licensed realtor, he is the current president of TOPMexicorealestate NETWORK     "Our experience at work protecting your interests"  (512) 879-6546.