Thinking of moving into a larger or smaller home? Whatever your current real estate goals are in Cabo, the first step after deciding to sell is finding a local real estate agent you can like and trust.
The members of our elite team of seasoned realtors at Cabo Life Real Estate have resided in Cabo and owned property in Cabo for more than a decade. We know the local market, we know our communities, and we know what it takes to sell property in accordance with the laws and regulations of Mexico.
Our agents are skilled negotiators who effectively apply deep local knowledge when conducting realty transactions. And we know how to close deals. If you have a luxury home to sell in Los Cabos, you have come to the right place; it’s our specialty. From start to finish, we will be right there with you, facilitating your search and decision with sound professional advice backed by thorough preparation.
After we have made initial contact, the next step is to schedule an appointment with one of our realtors. During this initial meeting, we will discuss:
We will also answer any questions and address any concerns that you may have. Next steps may include:
When you sell a home in a foreign country, you must report the transaction on your U.S. tax return just as you would if you had sold the home in the United States.
The United States taxes the income of its citizens wherever that income is received. Depending on whether your property was an investment or actually your home, the method of taxation differs. The Internal Revenue Code permits certain exclusions if the property was your primary residence at least 24 out of the last 60 months as of the date of the sale. If so, you can exclude $250,000 of capital gains from being taxed if you’re single, and you can exclude $500,000 if you’re married and you and your spouse file a joint return. Tax rates are lower if you have owned the property for more than a year.
Other tax rules apply if your house is a rental property. The gains are calculated differently. Although there’s no exclusion as in the case of a personal residence, you may still deduct costs like maintenance. You may also be able to claim depreciation.
Mexico has a tax treaty with the United States. This means that you do not necessarily have to pay U.S. taxes on a sale in Mexico if you claim the Mexican taxes on the sale as a foreign tax credit on your U.S. return.
According to the capital gains law in Mexico, you will typically pay 35 percent of the net profit (calculated on the basis of the exchange rate at the time of closing). You can include deductions that reduce your net profit and capital gains.
The closing of the property sale takes place at the office of a notary public. During the closing, the foreign owner may assign his beneficial interest in the trust to the buyer. The buyer may establish a new bank trust with respect to which he is the primary beneficiary.
Cabo Life has two closing companies with which we work very closely. One whose attorney is licensed to practice in both America and Mexico, and the other (Secure Title Latin America) is American-owned and conducts business throughout Latin America. The persons working on your behalf are thus conversant with the cultures and languages of both north and south, which makes closing a breeze.
Consult your real estate agent about the paperwork you’ll need to prepare so that the notary public can finalize the transaction. Typically, you need to provide your real estate agent with physical or electronic copies of documentation of the following:
We also recommend that you discuss with us the estimated capital gains on the sale so that there are no surprises.
Although we recommend that every seller conduct his own due diligence, we’re more than happy to answer any questions you may have. Here are answers to some of the questions that we get asked a lot.
Mostly documents. We will collect all pertinent documentation required to list your house, and we will start a file about your property in our secure database. We will also photograph it for the listing.
We will work with you to create a customized marketing plan. Typically, we will place a For Sale sign, list your property on our website and in the local multiple listing service, and help you stage the property to show it off it in its best light. We will also initiate other electronic and print marketing efforts that we will discuss with you, and we will arrange for open houses.
Besides following our recommendations for staging, we ask you to disclose any problems with the property — leaks, toxic substances, noise, etc. This will help us determine what repairs and adjustments may be necessary. It will also prevent a situation in which a sale does not go through after the buyer orders a building inspection and becomes aware of serious problems that were not previously disclosed.
You must make sure that all property taxes, annual payments on a fideicomiso, and any corporate taxes are up to date. You are responsible for capital gains taxes, commission fees, any lien on the property, and, if applicable, up-to-date documentation of your Mexican corporation. If you don’t plan to be present at the closing, you are responsible for fees associated with setting up a power of attorney. Once we have undertaken to sell your Los Cabos property, we’ll walk you through the list of required documents and fees.