Buy or sell a property It is not something simple, because once the transaction is completed, the parties involved are obliged to pay some taxes, which means expenses that are often not included in the initial budget.
According to the portal real estate from eBay, Vivanuncios, there are certain alternatives to exempt or deduct these contributions and thus the burden is less.
It is worth mentioning that, in Mexico, the buyer of a property must normally make the following payments:
- Tax on the acquisition of real estate (it is local and, in some places, it is called tax on the transfer of domain).
- Public Record Rights.
- Rights for obtaining certificates or records from various agencies (such as the certificate of freedom from encumbrances, records of non-debt of contributions, records of land use, cadastral plans, etc.).
- Expenditures (payment to managers, transfers, appraisals, travel expenses, etc.).
- Notary fees and the corresponding VAT.
In the case of the seller, the expense for the Income tax (ISR), which is only paid by natural persons. In many cases, it is the notary himself, before whom the sale is made, who retains it.
In this regard, José Antonio Manzanero, former president and dean of the National College of Mexican Notaries, indicated that sometimes it is possible to exempt the payment of ISR or deduct expenses that are subtracted from the profit from the sale. As a result, you pay less tax or nothing is paid.
“It is worth mentioning that there are also non-profit legal entities obliged to pay this taxthere are also cases in which some natural persons who are taxed under the business activity regime that, although they do cause this tax, the notary does not withhold them. In these particular cases, it is appropriate to go to a notary to request advice,” Manzanero commented.
How to exempt the payment of ISR?
According to Vivanuncios, they are exempt from paying the ISR the income obtained from the sale of a house up to an amount of 700,000 Udis (approximately 4 million 376,000 pesos), for each person sold.
However, this is only allowed as long as it is proven that it is precisely the house in which you live that is for sale, through the following documents:
- Tax receipts for payments made for electricity.
- Tax receipts for payments made by telephone.
- Bank statements, commercial houses or non-bank credit cards.
- Voting card that indicates the house being sold as the address.
The aforementioned documents may be in the name of the taxpayer, his spouse, his ascendants or descendants in a straight line.
What can be deducted in the ISR?
In cases where the exemption cannot be ISRsome concepts may be deduced that the notary will take into account to calculate tax correspondent.
To do so, invoices and tax receipts must be delivered. Vivanuncios remarked that some of these documents are obtained at the time of purchase and others during the time the property is inhabited, so they cannot be recovered if they were not requested at the time:
- Proven cost of acquisition (what it cost the seller to acquire the property). It is credited for properties acquired before April 2014 with the corresponding deed. It is important to make sure you have the notary invoice from the purchase of the property, otherwise it cannot be deducted at the time of sale.
- Investments in constructions, improvements and extensions. They are credited with the corresponding invoices with the notice of completion of work or with an appraisal (in the latter case only at 80%).
- Notarial charges.
- Commissions and mediations. Invoice with the amount paid to the real estate brokers or brokers.
Finally, the platform recommends asking the notary everything related to the exemption and deduction of the ISR from the acquisition of the property, in order to have the pertinent requirements.
