SAT > English > SALE OF REAL ESTATE INCOME ​
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SALE OF REAL ESTATE INCOME ​
Individuals residing abroad who receive income from the sale of real estate, income is considered to be obtained in Mexico when the goods being sold are in Mexico.

Tax rate

The tax must be calculated by applying the rate of 25% on the total amount, without deduction.

Tax payment method

The amount of the tax must be retained by the person who acquires the good provided that he is resident in the country or resident abroad with a permanent residence in Mexico; Otherwise, the taxpayer who receives the income must make the payment to the Tax Administration Service (SAT), within 15 days after obtaining the income.

Payment through representatives in Mexico

Foreign residents who obtain this type of income and have a representative in Mexico, provided that the sale is made by public deed (before a notary public), can pay the tax applying 35% rate over the profit obtained. 

Profit is determined by subtracting the following deductions from the total income of the sale:

The proven cost of acquiring the property, updated according to the provisions of article 124 of the Income Tax Law.
The amount of investments in constructions, improvements and extensions, updated according to the provisions of article 124 of the Income Tax Law.
Notary expenses, taxes and fees for deeds of acquisition and sale.
Appraisals’ payments
Commissions and intermediations paid by the seller at time of the sale.
When the transfer is recorded in a public deed, the representative will disclose to the notaries these deductions.
In this case, the notaries, brokers and other notaries make the estimate of the tax, under their responsibility They make it appear in the deed and inform the Tax Administration Service (SAT), within 15 days after the date on which the deed is signed.
The representative must be resident in Mexico, or resident abroad with a permanent address in Mexico, and must keep, at the disposal of the tax authorities, documents related to the payment of tax on behalf of the taxpayer, for a period of five years starting the date when the  declaration was filed.

CONSTRUCTION SERVICES, INSTALLATION, MAINTENANCE, OR ASSEMBLY IN REAL ESTATE, INSPECTION OR SUPERVISION 


Individuals providing construction services, installation, maintenance, or assembly in immovable property, or for related inspection or supervision activities, income is deemed to be obtained in the country when carried out in Mexico. 

Tax Calculation 

Tax must be calculated by applying the rate of 25% on the income obtained, without deduction. 

Tax payment scheme  

Tax is paid through the retention and receipt that the person who acknowledges the payments. 
Payment through representatives in Mexico 

Taxpayers who have representatives in the country may choose to calculate the tax applying the 35% rate to the amount that results from decreasing the income obtained by the deductions that directly affect that income. Regardless of where they were made. 

In this case, representatives calculate the tax and the receipt through a statement filed out at  authorized offices, that correspond to the place where the public, artistic or sports activity  takes place, within one month after its conclusion. 

The representative must be resident in Mexico, or resident abroad with a permanent address in Mexico, and must keep, at the disposal of the tax authorities, documents related to the payment of tax on behalf of the taxpayer, for a term of five years starting the day the declaration was filed. 

The tax rates and the payment procedure are applicable provided that taxpayers providing the services do not have or do not constitute a permanent address in Mexico.

OTHER INCOME WHICH MUST BE TAXED 

When you receive the following income, you must also pay income tax:

1. The amount of debts forgiven by the creditor or paid by another person. Income is considered to be in the country, when the creditor who makes the exoneration is resident, or resident abroad with a permanent address in Mexico.

2. Those obtained by granting the right to participate in a business, investment, or any payment to celebrate or participate in legal acts of any nature. In this case, it is considered that income is obtained in the country when the business, investment or legal act is carried out in Mexico and they are not capital contributions to a legal entity. 

3. Those derived from compensation for damages and income derived from criminal or conventional clauses. Income is considered earned in the country when individual making the payment is resident in Mexico or resident abroad with a permanent address in Mexico. 

4. Those that derive from commercial credit alienation. Income is considered to be obtained in the country when the commercial credit is attributable to a person resident in the country, or to a resident abroad with a permanent address located in Mexico.


Tax Calculation 

To calculate tax, rate of 35% on the total of the income obtained is applied, without some deduction. In the case of debts forgiven, the tax must be calculated on the total of the debt forgiven and the withholding is done by the creditor. 

For the revenues indicated in the second and last points of the above, tax is calculated on the gross amount of the consideration that was agreed. 

For the income indicated in point three, rate is applied on the gross amount of the indemnifications or payments derived from penal or conventional clauses. 

Tax payment 

In the case of the income indicated in the second to fourth points, tax is paid through its withholding, done by the person who makes the payment if he is resident in Mexico or resident abroad with a permanent address in national territory. 

In a different case, taxpayer residing abroad makes payment to the Tax Administration Service (SAT), either by bank window or Internet, within 15 days after the receipt of income. 

What taxes do they pay?

WHAT TYPE OF TAXES FOREIGNERS PAY


Income Tax 

Mexican and foreign individuals who are resident abroad and earn income in Mexico are required to pay Income Tax. 

Value Added Tax 

They must pay value added tax when they obtain income by alienation of goods or by the lease of real estate other than a living house. 

The value added tax must also be paid if real estate is rented furnished, or it is a hotel or a lodging house. 

In addition, they must pay tax at the rate of 16%, according to the Value Added Tax Law, individuals or legal entities that make payments to residents abroad for the provision of services used in Mexico, for the use or granting of tangible and intangible goods, among other cases, and it is consider that those are importations. It is considered importation of goods or services, the use in Mexico of the services, when they are provided by non-residents in the country. 

The use in the national territory of the services provided by residents abroad without permanent addres in Mexico includes both carried out from abroad and those provided in national territory. 

If you are not a resident of Mexico, you are not required to pay the value-added tax directly, if any, people to whom service was provided or contracted, as they are obligated to pay the tax through instruments established by the Tax Administration Service (SAT). 



 

Última modificación:
06 de abril de 2017 a las 19:53
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