This week, Nick Fong of Ronival Real Estate presents the taxes to expect when you’re in Baja California Sur. Although the taxes presented by Nick do apply to all of Mexico, his focus is on Los Cabos and all of Baja Sur. So whether you own a home there, are thinking of buying a home there, or if you just plan to visit, this is what you will expect.
Since Nick Fong has been in the Baja Real Estate market going back to 2012, he really knows his stuff when it comes to taxes and other important info about Baja Sur. That being said, he really enjoys presenting weekly Q&A videos to make sure you are informed about what to expect in Baja. This includes Los Cabos at the southern tip of Baja Sur. Therefore, continue reading to uncover more about taxes in Baja California Sur, and to discover a even more about Ronival.
The IVA tax explained
Starting with the first video, Nick Fong the sales tax in Mexico called IVA. This tax is added by the Mexican Federal government on all services and products, which adds 16% to the purchase price. Fortunately, IVA doesn’t apply when purchasing real estate. That has a 2% acquisition tax instead, as mentioned by Nick in the video.
Whenever you shop somewhere like Sam’s Club or pay for medical or dental services, expect to pay a sales tax just like in the United States or Canada. That being said, the majority of small shops and taco stands do not charge an IVA tax.
Nick Fong reveals details about Baja’s Capital Gains Tax
Next, Nick Fong reveals Capitol Gains Tax in his next video. Similar to the United States and Canada, if you sell your property for more than you purchased it for, the profit you make is Capital Gains and is taxed. Nick explains this tax in good detail so you understand.
When you purchase real estate in Baja Sur, the currency you use is converted to Mexican Pesos, calculated at the current market rate. Then, those Pesos are used to purchase your property. That means, your purchase price is shown in Pesos on all documents. At the time of closing, the sales price is compared to your original price in Pesos. When you sell your property for higher than your purchase price, a Capital Gains tax is calculated and added.
Be sure to watch Nick’s video to learn the percentage that is calculated for Capital Gains Tax in Baja California Sur. Nick Fong explains in a way that is easy to understand – he really knows his stuff!
Previous Q&A videos from Nick Fong
As a leader in both real estate and property management in Los Cabos along with all of Baja Sur, Nick Fong of Ronival Real Estate really knows the market well. As such, Nick Fong is excited to answer questions about current market conditions with authority.
Watch Nick’s previous Q&A videos as he answers questions like “what is title insurance in Baja Sur?” Also, see answers about title insurance policies and uncover where to buy title insurance in Los Cabos. Get the facts from the leading professionals in real estate and property management in Baja Sur: Ronival Real Estate and Ronival Property Management.
Next, see who handles transactions and learn how money gets transferred to and from the United States. In Nick Fong’s previous Q & A, he explains how the closing companies in Baja operate. These include the escrow company and title company in the US as examples.