On July 4, 2014, the Secretary of Hacienda and Public Credit, the Mexican version of the IRS or Revenue Canada, issued a miscellaneous fiscal resolution that as of September 1, 2014 will affect all buyer and sellers of real estate in Mexico, regardless of their nationality.
Without getting into all of the details of the whys and wherefores of these new rules, basically the tax authority has made the determination that in order for the costs involved in real estate transaction that is taking place be tax-deductible in the future for the party that is purchasing the real estate, the purchaser must provide, at closing, proof of a CURP (Clave Unica de Registro de Población, similar to a Social Security Number of Social Insurance Number) and a RFC (Registro Federal de Contribuyentes or Taxpayer ID Number).
Furthermore, since it is the notary public that will issue the tax-deductible electronic receipt (CFDI or Comprobante Fiscal Digital a través de Internet), the current criteria of the local notaries here so far is to insist on having both buyer AND seller show proof of the CURP and RFC in order to fully complete the receipt or CFDI.
Now that I have bored you to tears with all these initials, what does it mean for you? In a nutshell, if you are buying or selling real estate after September 1, 2014, you will need to have both the CURP and the RFC.
If you happen to be a foreign national, you will need to have either a permanent or temporary residency card as well, as right now it is a precursor to obtaining the CURP. (In practice those with a tourist visa are not being allowed to request a CURP).
Those who do not have the residency permit must apply for the card at the nearest Mexican Consulate in the country of your origin and it should not take more than a few days. The card that you are issued should show the CURP. Once you have your CURP, you can apply for your RFC online. I would strongly recommend having a local accountant help you in order to make sure that the information you are providing is correct. He/she can walk you through the process and coordinate the appointment to finalize the procedure.
Although these procedures can be done online, you will eventually have to be present in Puerto Vallarta to register your residency permit with the local immigration office and to pick up the proof of your RFC at the local office of the tax authority (SAT) so when planning your closing dates I would also allow for time to have these things completed.
You will be shocked at how competent, professional and service-oriented the Mexican tax authority is – it is a unique experience when compared to some of the red tape procedures the US government puts you through. Your residency and tax ID number will give you an identity in Mexico and will make certain procedures more streamlined and efficient. I have also heard that the procedures at the individual consulates are also well-organized and hassle-free.
This new regulation just passed a couple of weeks ago and as with any new law, we expect that there could be changes as it is gradually implemented. The reasoning behind this is to ensure fiscal transparency in all purchase sale operations for everyone – both national and foreigner alike. I will keep you informed of any subsequent modifications in these regulations.
By Maria O’Connor – Tropicasa Realty
The following is a message sent to The Yucatan Times on Thursday August 7th, by an American Expat living in Cozumel:
Current problem for Expats in Cozumel!
A new law regarding registration and re-registration of motor vehicles and motos has gone into effect and this is causing a major problem to expats who own property and motor vehicles here in Cozumel.
These expats who have owned homes and legally registered Mexican vehicles here for many years are now being told that they cannot register or re-register vehicles without a CURP. They are told that they cannot obtain a CURP without a Temporary or Permanent Residences Visa. One friend tried to obtain a CURP with Constancia de Residencia but was denied.
This CURP problem could affect as many as 100 or more property owners here in Cozumel, who own vehicles and motos, who only want to come and go on tourist visas (FMM), they own homes, pay their Predials and Fides.
I have friends here now who paid for their places in February or March, but cannot pick them up because they do not have and cannot legally obtain CURPS.
- Albert Thigpen (Don Beto)
- Ph.- 52 (987) 872 3323.
This is a note from an American Expat living in Puerto Vallarta who just applied and received his RFC:
“It was way easier than I thought it would be, I just got a confirmation number online, then we went down to SAT, gave them our ID’s and in 5 minutes we had our numbers. Didn’t have to go back online and register or anything. That’s the fastest and easiest thing I’ve ever had to do in Mexico.”
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