Casa Tropicale or Island House
Posted 05 February 2012 - 07:16 AM
Although Charles is being a gloomy gus to put a damper on your joy, he does make a couple of important points that I would second.
Please do yourself a big favor and hire your own lawyer asap to check on everything you've done so far and walk you through what follows. You need your own lawyer with YOUR interests at heart and in mind because buying property here is very different than in the US and there are many ways to get the royal screwola.
If she is not already working for the seller, I would consider contacting Gisela Rodrigeuz. She's excellent, speaks beautiful English. And, not a given here, keeps up with her emails.
Cell number: 987-878-5408
Office number: 987-869-3258
If that email doesn't work, she has a website now called cozumellawyer or some such but I can't find it right now.
So do that because a lawyer will know questions to ask that you would never have thought of. Believe me on this!
That said, AJ and I bought our lot, back in 1998 on a whim and were deliriously happy at the same time we wondered if we were idiots to have done this without coming down here and living for awhile first as all the old timers on this board always suggest. And that turned out alright in the end. We bought directly from the seller, a Mexican local, but we had a lawyer work us through everything. We used Victor Moreno.
I say happy 'in the end' because there was an immense learning curve for us and no small amount of mental anguish involved before we got to the happy place we are now. And this, in fact, was the impetus behind the living on Cozumel themed forums. We really needed advice, knew hardly anyone and pretty much had to make all the mistakes. These forums might save you from some of them if you pay close attention.
On another note, Charles and others have been beating the drum about foreign owned non-tax paying vacation rental properties for years. And so far nothing has actually happened here on Cozumel. But I feel sure it is only a matter of time and if you must rent for economic reasons, it would be a very smart idea to do it the legal way. Although you may find that, once you set it up to do the legal way, you won't make any money because of the taxes (which could be passed onto guests, true) the monthly accountant fees and the higher costs of utilities on rental properties which are considered businesses.
If your property has been rented in the past through a property manager, do not assume that they are paying the tourist taxes. In the past, most of the big rental management companies here or at least a couple of them were taking the tax and just pocketing it. Because, you see, if you haven't declared your home and legally made it into a vacation rental, there is no MECHANISM that allows you to pay taxes -- even if you wanted to. So management companies were taking the money and 'putting it aside just in case'. But bottom line is if Hacienda, the Mexican IRS, came after them for this, they would be deflecting the blame to individual owner in a New York Minute is my guess. So watch out!
All these concerns can be managed and we don't want to pop your bubble. Because I'm sure you will enjoy it here -- AJ and I are still here, for example, 12 years later and still loving life on the island. For the most part. However, we want you to STAY happy and avoid the worst of the pitfalls that may possibly await you and your folks as you settle in.
Good luck, again welcome. And keep us posted and ask all the questions you like. We'll try to help.
Posted 05 February 2012 - 09:47 AM
Posted 05 February 2012 - 09:57 AM
I think the people were asking about the renting of the properties and not about buying? maybe I missed some of the other posts and see the original request was in June 2011?
Yea you did. Read on down and they just bought the one house they like to stay in.
Wishing I was retiring to Cozumel.....
Posted 05 February 2012 - 11:02 AM
It would be wise to be a bit terrified. I would urge to to run, don't walk and start working with an attorney that will fully protect all your interests exclusively. You have a tremendous learning curve to climb in order to learn enough to begin to know what questions to ask.
If you intend to hopefully one day make this a rental, I won't express any opinion on that, but would urge you to actually know what the laws, regulations and taxes you face. I would not go by what about 85% of the people have been getting away with for years. Newspapers print articles now about every six to eight weeks regarding the huge market of illegal, unlicensed rentals that are in unfair competition with legal tax payers and that unfair advantage is helping to kill the hotel business. Was this house as a rental actually paying the 11% IVA and the 3% hospitality tax they claimed to charge? The majority collect, but they have no means of paying even if they wanted. In 2010 the state legislature passed an unnecessary law just adding emphasis to standard Mexican law, that foreign owned rental villas are not exempted from tax requirements. On the Pacific coast, Puerta Vallarta as one example, every year (for the last seven that I know of) La Hacienda (Mexican IRS) has sent letters in Spanish and in English to all foreign owners reminding them on the legal restrictions and tax obligations.
Since this property is on the edge of the jungle, I would hope the lawyer would be very careful about checking the property deed the work of the Notario Publico, I am guessing this was under a fideicomiso. Besides a competent and honest attorney, you will need the services of a Notario Publico.
I wish you luck, happiness and success, but the glut of real estate that has sat on the market for years, especially in the Corpus Christi area stands as testament to people that had unrealistic expectations. There are success stories, but they are not close to the majority. Most failures come from not doing their homework and having no idea what they were getting into. For years this forum has had numerous recommendations for people to come here, rent and see how well they adapt and their comfort level with the expectations of being eventual full time residents or live here seasonally. So many discover that living here compared to vacationing has quite a difference.
I understand the need for caveats. I'm just about the only non-lawyer in my family so the first thing anyone has said is to get a good local lawyer.
I'd thought that renting a house owned by fideicomiso was subject to Mexico's 28% corporate tax rate? In any event, I'm the kind of person who finds out the rules and follows them. We have 3 rental properties in the States, which is my wife's full-time job, and know it can raise some complicated tax issues. Our a priori assumption is that it's more complicated in Mexico.
It's pretty certain none of use will ever live there full time or even seasonally. My parents have too much going on in their retirement that could never be moved to Cozumel, and I'm years from retiring. I also moved from a resort island on the Gulf Coast to come to New England so I'm not likely to want to return to one full-time. For several years we actually have rented on the island in exactly the way we intend to use this house - a week or two at a time several times per year. The biggest differences are that we'd be paying bills ourselves and would have a place on the island to leave some stuff.
The real estate glut and dropping prices are what allowed us to consider getting this place. This is not an investment; I don't believe that houses are investments to begin with. If they appreciate in value, that's great, but all they really are is a place to live. A house is worth whatever I'm willing to pay for its use - nothing more or less.
We have no expectation of making any money on this, or even having the house "pay for itself". It's mostly that I think it's inadvisable to let it sit empty for long periods of time.
Did you get burned, or is it just that you know a lot of people who got burned?
Posted 06 February 2012 - 12:35 PM
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