Real Estate: Owning property in a Mexican Corporation

By: Shawn Bandick

The inside Real Estate Scoop

Should You Own Property with a Mexican Corporation?  Learn the Pros and Cons!

There are two ways a foreigner can hold property here in Mexico. In Trust or In a Mexican Corporation; which is right for you?

In the last article we talked about how the Real Estate Trust works. Now, let’s look at owning your property in a Mexican corporation.

This option is not for everyone so let’s clarify.

It is two very different things for two very different applications. The rule of thumb is: if it is a personal use property it should be in a trust, if it is for a business it should be in a corporation.

So if you are buying your dream home for your family to holiday in or for you to retire in buy it in a trust. However, if you are making an investment as part of a business venture the property can be an asset of the corporation. Also, if your business requires you to purchase multiple properties it will be easier to purchase them as an asset of your corporation.

When you sell your properties the capital gains tax will be higher on corporate properties. However, if your property is in a trust and you can prove your property is your personal residence for at least three years you will not pay capital gains tax. Just be sure all the utility bills are put into your name when you buy, they serve as your proof of residency. That’s just one more reason not to mix business and personal.

A Mexican corporation has all the same responsibilities as any other corporation. It is not recommended to use a corporation unless you truly intend to have an active business. A lawyer can incorporate your company for about $1000 USD. You will need to register with a local accountant who will be responsible to over see it.

That’s it in a nut shell, so make the right choice for your application.

Make it a great day!

Shawn Bandick
One Stop Real Estate, Playa del Carmen
shawn@onestopmc.com