Sellers Closing Fees
BY CONNIE BEZEREDI
Gringo Gazette
November 9, 2019
It's
important for sellers to know upfront before entering into a Real Estate
listing contract what the fees will be that will affect the net of the sale
that you are going to put into your pocket. Don't wait until you receive a
buyer’s contract or get surprised at the closing table when you receive your
seller's statement.
Just like
when you purchased your property, the buyer will be paying the closing costs
and transfer fees for transferring your title into their name.
As the
seller, you will be responsible to have your Mexican Property Taxes, Home
Owners/Strata Dues paid to the date of close.
You can
request to have your utilities pro-rated if they have been pre-paid or have
your electricity and water meters read on the date of close so that from that
date it becomes the responsibility of the buyer. Your annual trust fee for your
title is one fee that cannot be prorated. If your
annual trust fee is due in November and you close your sale in December you
will still be responsible to pay the annual fee for one year regardless. The
buyer will also be paying one year of trust fees upfront in their closing
costs.
Capital
Gains tax also applies to Mexico. It will be calculated on any gain you make on
the sale of your property. It will be calculated in pesos at the exchange rate
of the day when you purchased your property and at the exchange rate of the day
when you sell your property. Some deductions can be calculated to bring the
gain down. Such as your Real Estate Commission, you also will receive an
inflationary credit for each year of ownership of your property, original Factura's for improvements can also be submitted for
consideration. It may be possible to have a tax strategy prepared in Mexico to
further reduce your tax obligation. After you close your sale talk to your
accountant North of the Border for your US or Canadian Income Taxes. US
Citizens receive a tax credit for Capital Gains Tax paid in Mexico.
Lastly, you
will be paying the Real Estate commission that you agree to in the listing
contract with your Realtor and Broker in Mexico plus IVA Tax.
The closing
time frame once you have an accepted sales contract typically is averaging 60
days. Throw in some Mexican Financing on the part of the buyer and the time
frame may average 180 days. If your title is held by a trust bank such as HSBC
your closing time frame may average 7 months or up to 1 year to process the
cancellation of your trust and the transfer of the property to the buyer under
a new trust bank. There are also additional fees to the seller related to
the cancellation of the HSBC trust, expect to pay additional sellers fees in
the range of $3,600.00 for this process, ask me for more details. Good to know
when you can expect your Dinero!
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Copyright 2019 by Gringo
Gazette. All Rights Reserved.