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Taxes. They’re as much a fact of life in Mexico as they are in the US or Canada, but in Mexico, you’ll find that our Puerto Vallarta building sites at least provide much more favorable tax treatment!

Seriously, if the cost of real estate taxes in the US and Canada is consuming a greater portion of your retirement savings, consider purchasing one of our exclusive Puerto Vallarta building sites and setting up a second home (or permanent home!) here in Puerto Vallarta.

Yes, you will pay taxes. That’s the bad news. The good news is that you’ll be shocked by how small your tax bill here is for the home you’ll be living in.

As a buyer, you’ll pay a real estate acquisition tax when you purchase the property. If you’re a commercial builder, you’ll also pay a value added tax, but this tax is waived for residential building sites. Even if you plan to rent out the property, the value added tax won’t apply to residential buildings.

If you build a home on one of our Puerto Vallarta building sites, and work here, you may qualify for residential tax rates, which include an income tax exemption on the capital gains on your property.

Resident status is a change from previous Mexican tax laws, which said that if you spent more than 183 consecutive days outside the country, you were not considered a resident. Under the current tax code, if you generate more than 50% of your income in Mexico and Mexico is your principal place of business, you’ll qualify for the residential tax exemption, regardless of your citizenship or how you spend your time in and out of the country.

Regardless of how you are classified for tax purposes, you’ll find that the taxes here are a welcome break from the taxes you pay in the US or Canada. Constructing a home on one of our beautiful Puerto Vallarta building sites can put you in an excellent tax position, whether you’re a tax resident here or not. It’s just one more advantage of living in beautiful, sunny Puerto Vallarta!

Photo Credit: Darren Shaw