Home sale FM 3 Needed ?
- Thread starter HILL BOY
- Start date
lagrimas85
AKA Carnac
You should, only need an FMM.....which was the old FMT, In the Immigration office in Sonoyta, there is a sign that says, FMM 1-8 days no charge 180 days $29.00. Keep in mind, they are computerized now and you don't want to be late returning the visa to them, it could cause you a problem, if you ever need another.
PitiquitoRosy
Guest
Hmm...if there are Capital Gains profits, wouldn't there be taxes, ergo and ipso facto (just messing with Melissa) a need for the Inmigrado? Not sure, just asking because it's been my experience that anytime money is made in Mexico, there's a tax implication and you can't get anything done without your immigraton document showing status.
lagrimas85
AKA Carnac
With a property sale In Mexico, an expert makes an appraisal (avalúo) of the property. The Notario 's fees as well as the taxes (impuestos) are then based on a percentage of the appraised value. Non-resident foreigners pay much higher capital gains taxes (35%) than do residents of Mexico. Even though foreigners can purchase a home or property on a Tourist Visa (FMT), paying capital gains taxes down the road when selling a property can be avoided by obtaining a Temporary Resident Visa (FM3) or a Permanent Resident Visa (FM2). . Capital gains are not paid if the seller can prove that he or she has lived on the property for the last two years. Proof of residence for this purpose consists of an FM2 or FM3 with the address of this home in Mexico and 2 years of water and electricity bills in the name of the seller. This will eliminate any capital gains one would have to pay on the future sale of the property.
You can also sell with an FMM, but you, don't get the tax break, without showing full time residency. Fishing tournaments, like in Cabo Rosy pay out millions to fishermen from the U.S, also with only FMM's, with taxes taken out. But I'm far from being a notary, probably best to ask one of them.
El Gato
Guest
If I understand you correctly, we've lived here over 2 years, have had an FM2 for those 2+ years, so if we sold our place we would not be liable for Mexican Cap gains? Would we have any US Cap gains? I knew that principal residences were exempt after some amount of time with a FM2 but wasn't sure how many years. Thanks for the information - very helpful.The seller of a property in Mexico pays Capital Gains taxes at the time of closing. Capital Gains taxes are not calculated as they are in the United States. In the US, taxes are paid on the difference between the cost (basis) of the property and the amount for which the property is sold.
With a property sale In Mexico, an expert makes an appraisal (avalúo) of the property. The Notario 's fees as well as the taxes (impuestos) are then based on a percentage of the appraised value. Non-resident foreigners pay much higher capital gains taxes (35%) than do residents of Mexico. Even though foreigners can purchase a home or property on a Tourist Visa (FMT), paying capital gains taxes down the road when selling a property can be avoided by obtaining a Temporary Resident Visa (FM3) or a Permanent Resident Visa (FM2). . Capital gains are not paid if the seller can prove that he or she has lived on the property for the last two years. Proof of residence for this purpose consists of an FM2 or FM3 with the address of this home in Mexico and 2 years of water and electricity bills in the name of the seller. This will eliminate any capital gains one would have to pay on the future sale of the property.
You can also sell with an FMM, but you, don't get the tax break, without showing full time residency. Fishing tournaments, like in Cabo Rosy pay out millions to fishermen from the U.S, also with only FMM's, with taxes taken out. But I'm far from being a notary, probably best to ask one of them.
lagrimas85
AKA Carnac
The way i have understood, for years is there is no capital gains on a full time residence, for Mexicans or foreigners with FM3 or FM2. Not sure what, the U.S. would say about the gain, I think it used to be up to $86,000.00 an american abroad could earn, without paying U.S. tax. The income tax my wife pays in Mexico, when we report the income in the U.S. at tax time, it counts as a tax credit in the U.S.
lagrimas85
AKA Carnac
http://www.irs.gov/pub/irs-trty/mexico.pdf U.S. Mexico tax treaty.........I didnt read it, but I see a section on how capital gains are handled, El Gato
I guess they do it that way so they can claim whatever they want and since they don't write it in normal everyday understandable language they can catch you coming and going.Thank you for the link.
Roberto
Guest
I have heard that it is EXTREMELY difficult to avoid capital gains if they are due, irrespective of how long one has lived here and immigration status. Nit picking tax collectors come to mind.
Maybe off topic, but related, valuation for Cap Gains computation used is either the actual selling price or the appraised value, which ever is HIGHER and they have not been re-appraising so appraised values tend to be higher ( a lot in some cases) than sale prices. Be prepared to work on it.
Maybe off topic, but related, valuation for Cap Gains computation used is either the actual selling price or the appraised value, which ever is HIGHER and they have not been re-appraising so appraised values tend to be higher ( a lot in some cases) than sale prices. Be prepared to work on it.
US taxes its citizens and permanent residences on worldwide income. So if you are a US citizen (or have a green card), you would pay capital gains tax on the gain of the sale of your house in Mexico.
The foreign exclusion mentioned above is for "earned income" - like from a job. As opposed to "unearned" which includes investments, pensions, etc.
The foreign exclusion mentioned above is for "earned income" - like from a job. As opposed to "unearned" which includes investments, pensions, etc.