HOW TO SKIP THE CAPITAL GAIN TAX FOR A RESIDENTIAL PROPERTY

 

The Capital Gain Tax is the bread and butter of a real state transaction as a seller since it´s the most important obligation to fulfill towards the government in normal conditions, since the capital gain tax can also be paid by the buyer if the specific conditions are met.

 

Under the Regulation of the Capital Gain Tax Law, article 155, states that the tax contributor shall prove to the notary public handling the closing, that the property subject to such, is his or her household with any of the documents listed hereinafter, this means that you need to live in such property, as long as the address designated in said documentation matches with one or more of the elements regarding the address of the property subject of the closing.

 

1. Official voting ID (aplicable if Mexican, not for foreigners, for them the equivalent would be a residency, either temporary or permanent).
2. Invoices of the payments regarding water, electric and landline phone services.

• Account statements issued by the institutions that form the finance system, also known as Banks or companies that issue credit (department stores).

 

The documents reffered above, must be to the name of the tax contributor, spouse or his or her ascendants (parents) or descendants (sons and daugthers) in a direct line.

 

Regarding the residency, that is a proccess that starts abroad (in any mexican consulate in the world outside of México) and its finished when you enter mexican soil and attend to an immigration office, after this is done you will be assigned a CURP (Mexican equivalent to a Social Securiy Number) and then can get your tax ID.

 

For the Invoices is necessary to link your tax ID with the bill by calling the company and asking for it, after giving some infomation regarding your tax ID and the bill to your name, you will get the next month receipt with that link done.