Taxes are always an important consideration for those who wish to either have a second home or a retirement home in Baja California Sur, Mexico.
Basically, property taxes are a non-issue. They are so extraordinarily inexpensive that most people do not believe it could be true. Property tax for a typical home, condominium or lot in Baja California Sur is normally under $300 USD per year. When you compare that to the thousands of dollars per year that one pays in the U.S.A., it is one of the great benefits of living in Baja California Sur.
When you decide to purchase property in Baja California Sur, know that you will have to pay an “acquisition” tax of approximately 2% of the purchase price of the property to the city municipality where the property is located.
Once you have a property in Baja California Sur and you decide to sell that property, you may be subject to Federal Capital Gains Tax. There are laws governing the capital gains tax: who pays and who does not pay this tax. The laws on this subject apply to everyone in Mexico, whether you are a foreigner or a Mexican national. It is the job of the Notario Publico (an attorney) to interpret the laws and either collect or not collect these taxes from the sale of your property. There are steps you may legally take to avoid paying capital gains tax. We suggest that you ask the Notario Publico for this information directly.
Sales tax, called IVA, is currently 10% of the purchase price of the item in Baja California Sur. Sales tax here is 5% less than anywhere else in Mexico. In addition, certain imported items that you purchase in Baja California Sur are subject to less importation taxes than anywhere else in Mexico – just one more reason to consider contacting Land’s End Realty and taking the steps required to having your second residence or retirement home in Baja California Sur.