Capital Gains exemption change

I checked with a notary today after being informed by someone that the notaries will accept the residente temporal immigration document to avoid the payment of capital gains on the sale of your primary home and not require the residente permanente document as they were requiring before. I was told that many local notarios are on board and personally confirmed this with Macias, notary #5.

That is just great news. Because even if one sold today for the same (US$) as they bought it for (say 7 years ago), they would show a cap gain of about 25% because, of course, the closing statement is in Pesos and the exchange rate has changed that much in that time frame. Now, if we could just get some relief from the exhorbitant real estate+tax fees (~11%) !!

Vandre wrote:That is just great news. Because even if one sold today for the same (US$) as they bought it for (say 7 years ago), they would show a cap gain of about 25% because, of course, the closing statement is in Pesos and the exchange rate has changed that much in that time frame. Now, if we could just get some relief from the exhorbitant real estate+tax fees (~11%) !!

You mean 7% Commission + 16% IVA tax on realtors fee. I don't think that equals 11%. Also, you can negotiate Realtor fees with a willing Realtor.

You're right John. I didn't actually do a calculation of what the total realtor expense would be. However, I thought I had read someplace that it was approx 11%. That percentage may have been referring to the total closing costs. So I just calculated that if one sold a house for $300,000. with 7% realtor commission and 16% IVA on that, the total realtor expense would be $24,360 (approx 8.1%)

Hopefully, oneday all home owners will get together, and fight for proper rate of real estate commission. 7 % is outrageous in Mexico, and the Brokers are getting rich at our expense! JUST SAYIN! Real estate sales people here, don't have to search for lenders, most are cash deals....they work less than NOB real estate agents, get a higher rate, and to add insult to injury....we pay their tax....IVA!

Jim...hate to argue with you, but the purchaser of a product or service pays the IVA, just like we do when we go to a restaurant or Walmart or a car dealership for service or new car purchase, etc., etc., etc.

It's a sales or value added tax.

Well I for one am just thrilled, my house is going on the market remarkably soon, just have to finish my artists studio, I just dabble, get a bit of carpentry done then it is sayonara Raquet Club, Hello Ajijic. Have one nice little place there already and am looking for a second.

E-raq wrote:Well I for one am just thrilled, my house is going on the market remarkably soon, just have to finish my artists studio, I just dabble, get a bit of carpentry done then it is sayonara Raquet Club, Hello Ajijic. Have one nice little place there already and am looking for a second.

OMG!!! I'm shocked. I thought you absolutely loved RC. Have you decided on a Realtor or Agency yet?

Why do you need 2 houses?

joec wrote:

E-raq wrote:Well I for one am just thrilled, my house is going on the market remarkably soon, just have to finish my artists studio, I just dabble, get a bit of carpentry done then it is sayonara Raquet Club, Hello Ajijic. Have one nice little place there already and am looking for a second.

OMG!!! I'm shocked. I thought you absolutely loved RC. Have you decided on a Realtor or Agency yet?

Why do you need 2 houses?

Rental income. Beats bank interest.

True about rental income. If the bank interest were any lower, it would have a minus sign on it.

If the U.S. economy were reality based instead of hallucinogen based, we would be getting 10% on T bills and money market accounts.

E-raq wrote:

joec wrote:

E-raq wrote:Well I for one am just thrilled, my house is going on the market remarkably soon, just have to finish my artists studio, I just dabble, get a bit of carpentry done then it is sayonara Raquet Club, Hello Ajijic. Have one nice little place there already and am looking for a second.

OMG!!! I'm shocked. I thought you absolutely loved RC. Have you decided on a Realtor or Agency yet?

Why do you need 2 houses?

Rental income. Beats bank interest.

Yep, anyday, but will it beat the market?. We have a Homeowner who lives next to me, who has been collecting $ 1,300 USD a month for 3 years now.

JoeC. That depends on what you paid and how that relates to the rent you're getting. If your neighbor paid anywhere under $150K, he's way ahead of the interest game with $1300 a month coming in. If he paid a lot more; it's questionable, but then....he apparently is content or he'd be selling out and investing elsewhere.

$1300/month isn't much of an ROI considering what she paid for the house (428K). After paying the maid, gardener, pool guy, condo fees and maintenance she is only netting about $800/month or $9600 per year. That is only about 2%. You can get way better money elsewhere.

Even if you are making 3% on 400K, the inflation rate is over 4% so there's no gain.

joec wrote:

E-raq wrote:

joec wrote:

E-raq wrote:Well I for one am just thrilled, my house is going on the market remarkably soon, just have to finish my artists studio, I just dabble, get a bit of carpentry done then it is sayonara Raquet Club, Hello Ajijic. Have one nice little place there already and am looking for a second.

OMG!!! I'm shocked. I thought you absolutely loved RC. Have you decided on a Realtor or Agency yet?

Why do you need 2 houses?

Rental income. Beats bank interest.

Yep, anyday, but will it beat the market?. We have a Homeowner who lives next to me, who has been collecting $ 1,300 USD a month for 3 years now.

Well yes, depending on what he paid for it, that will beat the market any day of the week and you have no sleepless nights. We do not invest in the markets. Period.

CanuckBob wrote:

joec wrote:

E-raq wrote:

joec wrote:

E-raq wrote:Well I for one am just thrilled, my house is going on the market remarkably soon, just have to finish my artists studio, I just dabble, get a bit of carpentry done then it is sayonara Raquet Club, Hello Ajijic. Have one nice little place there already and am looking for a second.

OMG!!! I'm shocked. I thought you absolutely loved RC. Have you decided on a Realtor or Agency yet?

Why do you need 2 houses?

Rental income. Beats bank interest.

Yep, anyday, but will it beat the market?. We have a Homeowner who lives next to me, who has been collecting $ 1,300 USD a month for 3 years now.

$1300/month isn't much of an ROI considering what she paid for the house (428K). After paying the maid, gardener, pool guy, condo fees and maintenance she is only netting about $800/month or $9600 per year. That is only about 2%. You can get way better money elsewhere.

She is very content in renting the house because she has tons of money.

Where did you get that she paid 428 for the house? You're talking to someone who doesn't know their a.. from a hole in the ground. If you want to know resale prices, ask me, I know them all. She paid 470 K for the house which was not too much at the time. The original owner had it originally listed at either 529 K or 539 K when it was in much better condition. Until recently, that was the least expensive house here.

It is now listed at 499 K, but still way too high.