Capital Gains Tax
Here, the gain from the sale of property is treated as normal income at a tax rate of up to 35%. To determine the gain, the following costs and expenses are deducted from the amount for which the property is officially sold:
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The original land cost and the depreciated construction cost, based on the number of years the property was held and adjusted for inflation according to the official consumer price indexes;
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Additions, modifications and improvements, but not maintenance, made on the property (construction), adjusted as above;
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Commissions paid to real estate brokers by the seller;
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The closing costs, including all expenses, taxes and fees paid by the seller.
The Notary will retain the calculated gain after deductions, forwarding it to the Mexican tax authorities.
On the other hand, there is no capital gains tax in Mexico if there is conclusive proof the seller has used the property as his primary residence.
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