Are you thinking about moving to Mexico? If you are planning a move and need to rent a place for 6 months or more, here are a few helpful tips and questions to ask your realtor estate agent in Mexico before signing a contract.
Bait & Wait
First off, if you found an advertisement listed in English and advertising in dollars, it’s probably a good idea to see if you can find the same place listed on a local site & in the local language. It’s a common practice to inflate the price a little more for “Los Gringos” (foreigners) – especially those whose only insight are online classified ads such as craigslist, segundamano etc.
Most realtors try to bring their clients a good client. And sometimes that means dividing the waters – the most common way is to jack the price up more than just a little. Since most Mexicans already know this trick, they tend to deal with realtors who are advertising in pesos – not dollars. However, since Americans are unaware, they get caught in this little realtor’s net.
Most popular touristic areas, such as Playa del Carmen/Cancun, are trying to draw in a large foreign crowd/investors, so odds are you will see a majority of the advertisements in English.
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Playa del Carmen aka Playa del Crimen
We lived in Playa del Carmen off and on over the years. On our first trip, I made the mistake of finding a realtor on Quinta Avenida (5th Street), a popular touristic spot right on the beach. The realtor drafted up a one-year contact – at the current exchange rate and I happily signed. Yes, I was the “dumb gringo” caught in the net. $1800 USD a month at the current exchange rate. I was okay with that since I had a budget of $2500 USD for rent and amenities. Boy did I have a good lesson to learn.
I asked the realtor what happens if the exchange rate drops significantly against my favor within that year. She reminded me of my obligations. It was in black & white.
If the rate changes, you still have to pay the amount the contact mentioned. They will not change it if the market suddenly changes against the dollar. It’s easier and more honest to draft it in pesos and not dollars. Why some make a big deal about that is a question you should ask yourself.
Ask them to leave dollars out of this – see what happens!
Does this include maintenance fees? This is another great question to ask a realtor who is trying to rush you into signing a deal. Although rent may be one price, maintenance is another thing that the renter pays separately. This fee is charged by a company that provides extra services such as gate-entry, keeping the grass cut, security, etc.
Sometimes, the fee may just be $200 pesos (roughly $10 USD) then again, there are some that might be $8000-$11,000 pesos – depends on where & what you are renting.
Imagine thinking you are renting a place for $15,000 pesos, then being denied access to the pool & having to open the drive-in gate yourself because no-one told you of the extra maintenance fees that you have to pay separately every month. Yep, it happens. $15,000 can easily become $23,000 – and this is not including electricity, gas, water, and other services.
A Small, Painful Sting
It definitely doesn’t hurt to ask, and it might sting just a little if you forget to ask this basic question: Is maintenance included?
Most rental homes will require you to pay two months + a deposit equal to one month’s rent. This is usually given back to the renter after they have moved out and the bills they left are paid by the owner. Believe it or not, some actually are honest about the bill they received AFTER you have left. I have received portions of my deposit back from honest owners.
You can find homes that are turn-key ready, furnished and all bills paid – even your cable & net. Mexico really isn’t an expensive country to live in – you just got to ask the right questions and deal with the right people. For the most part, you will have to look for the right persons – sharks will bait and look for you.
Try finding a temporary vacation rental online and save yourself the hassle and a headache. Owners do not mind making side deals. Keep in mind, although a leasing contract can be drafted in English, only Spanish contracts are recognized by Mexican law – be sure to ask your Mexican realtor about the language of the law.
More tips on Moving to Mexico Below
If you are going to rent a house, apartment, or even a car, you must require a receipt (invoice) from the person who is going to rent the property, above to have proof that you made the payment and, if applicable, contemplate it in your tax return. Specialists will explain when and how to do billing and how it will help landlords into tenants.
The Tax Administration Service ( SAT ) recalled that all those people who obtain income in Mexico from the rental of buildings, commercial premises, houses, apartments, warehouses, among other real estate, must be registered in the Treasury, generally under the Leasing regime and issue Digital Tax Receipts over the Internet (CFDI) for said income.
“Currently, the owners are the ones who have all the tax obligation to issue in case their tenant requires it. In the event that the owner is not registered in the lease and has another, as a Business Activity, he must change it, ”confirmed Paulina Maya, Homie’s Finance Manager.
The tax authority reported that only those individuals with business and moral activity may request the lessee to issue the digital receipt.
For those who are wage earners, it will only be enough for their landlord to grant the rental receipt, which is a document that certifies the money that is being received as rent payment and generally contains data such as name, address, place of issue, RFC of the landlord and name, address, month and year to which said rent corresponds, amount with the letter, number, VAT, subtotal, total, signature, place and date of issue, as well as receipt number.
He pointed out that since the digitization of the procedures has been implemented, they must be issued in CDFI format, that is, you will have to occupy the SAT page to issue them or hire a provider authorized by the Tax Service to issue invoices.
On the other hand, Paulina Maya recalled that the tenant has every right to request the bill from his landlord; Likewise, it indicated that those people who rent any property without notifying the Tax Administration Service could become entitled to sanctions that will depend on the amount or the obligation that they omitted.
The manager of the platform that offers the possibility of finding an apartment or house explained for tax purposes the CFDI must meet certain requirements such as indicating the withholding of 10% for Income Tax either for legal or physical person.
Likewise, the tax authority pointed out that if it obtains income from the sale of goods or from the lease of real estate other than a house, it is obliged to pay VAT, or if the real estate is rented furnished, or it is hotels or houses accommodation, VAT is also paid.
On the other hand, the SAT indicated that from the first day of this year it became mandatory to issue the digital tax receipt with version 3.3.
“The current SAT platform is super-friendly, it has been modified and as of this month individuals or legal entities will be able to find, depending on who is going to issue the invoice to the tenant , direct access to all the options available and also includes the billing 3.3 ”, he indicated.
He confirmed that the platform can already save, among other things, the catalog of clients, amounts, concepts and in the same way save the keys that the SAT authorized for this type of services.
You will have to choose the one that most closely matches the lease that is provided. The service code for the house or land lease is 80131500; for residence leasing it is 80131501; To rent commercial or industrial facilities the key to consider is 80131502 and finally 80131503 to rent land.
How to take the first step
If you are the owner and your tenant requested the invoice, you must register in the Federal Taxpayer Registry (RFC) and register with the rental obligation.
Contabilízate, a platform that offers accounting services over the Internet, explained that already with the RFC and its obligations, the landlord must issue to its tenants (tenants) the CFDI lease receipts for each charge made.
In the same way, you must request proof of the expenses you make, which can be deducted, as long as they are related to the properties you rent, for this it is necessary that you ask your suppliers for invoices with all the tax requirements so that they are deductible.
Finally, they must submit their monthly and annual returns to the SAT and in the event that the tax calculation results in taxes payable, they must comply with this obligation.