When owning a condo in Rocky Point, who do you pay taxes on income to?

[tyler]

Do you pay Mexico and US taxes? If so, what percentage do you pay to Mexico?

 

[wihint]

None for this gringo.......
I only rent to my family and close friends....the type that come to my house alot.

 

[mexicoruss]

If you are following the letter of the law....if you own a place here that you are going to use as income producing property you are supposed to have a Mexican bank account and pay the 16% IVA to Hacienda usually on a monthly basis. Properly done your RE sales person can help you establish all of this. The condos since they are governed by an operator usually mandate that this is all set up. If you buy a stand alone house this small detail could be overlooked. There are more than a few homeowners renting their houses and because they are doing it through the internet AirBnB etc...they are probably not collecting and paying the IVA on income and that could be a problem for them in the future. Its not hard to set it up legally.

 

[tyler]

Thanks for that - so I wonder if I pay the 16% to the Mexican Gov't, if the US wants their share too... so I'd be getting double taxed.

 

[mexicoruss]

It's Mexican income not American, you probably have to declare it on your taxes but I doubt it will trigger any USA taxes

 

[MIRAMAR]

There is a credit for foreign taxes: https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit

 

[ddez]

U pay US tax on worldwide income. May get a credit for taxes paid. When I did sons tax his wife worked in Hong Kong had to pay tax on that. That's what I learned in 30+ years of doing tax returns

 

[mexicoruss]

U pay US tax on worldwide income. May get a credit for taxes paid. When I did sons tax his wife worked in Hong Kong had to pay tax on that. That's what I learned in 30+ years of doing tax returns

Yes if it meets the threshold. It is declared on your tax form but the threshold is high. That's what I learned from living abroad for 12 years.

 

[marybna]

I have Seaside manage my condo at Bella. They pay all the taxes and fees. I've owned 4 places there over time and you want to make sure everything gets paid. I heard that someone at LP didn't pay any taxes(they rented it themselves) and when they sold they got fined a lot of money.