Buying or selling real estate in Puerto Vallarta involves several legal and tax considerations, especially for foreign buyers and sellers. To help navigate these complexities, we sat down with Notary 29, Lic. Adán Meza, a trusted expert in Mexican real estate law, to discuss three key aspects of property transactions: capital gains tax, the role of notaries, and essential documentation.

1. Capital Gains Tax in Mexico: What Sellers Should Know
One of the biggest concerns for sellers is capital gains tax in Mexico. According to Lic. Adán Meza, the tax owed depends largely on residency status:

• Non-residents face two taxation options: 25% of the sale price with no deductions or 35% of the net profit.
• Residents (temporary or permanent) may qualify for exemptions of up to 700,000 UDIs (approx $292,000 USD), a significant advantage.

Additionally, fluctuations in the peso exchange rate can impact tax calculations, as all transactions are recorded in Mexican pesos, regardless of the original currency used to purchase the property.

2. The Role of Notaries in Puerto Vallarta Real Estate Transactions
Unlike in the U.S. or Canada, notaries in Mexico have an essential role in real estate transactions. Lic. Meza explains that notaries are responsible for:

• Ensuring compliance with Mexican real estate laws.
• Collecting and reporting property taxes to the government.
• Verifying the identities of buyers and sellers to prevent money laundering.

Since different notaries may have varying documentation requirements, Lic. Meza advises buyers and sellers to work with an experienced Puerto Vallarta notary who understands the specific legal requirements of their transaction.

3. Essential Documentation for a Smooth Real Estate Transaction
Proper documentation is crucial for a successful real estate closing in Mexico. According to Notary 29, the following documents are essential:

• Factura (official electronic invoice) – This document verifies the purchase price of the property and is critical for accurate capital gains tax calculations.
• Proof of residency – To qualify for capital gains tax exemptions, sellers must demonstrate at least six months of residency per year using local utility bills or bank statements.
• Property title (escritura pública) and tax records – Keeping these up to date ensures there are no legal obstacles when selling.

Final Thoughts from Notary 29, Lic. Adán Meza
Successfully navigating real estate transactions in Puerto Vallarta requires an understanding of capital gains tax, legal documentation, and the role of notaries. Lic. Adán Meza emphasizes the importance of working with qualified real estate professionals to avoid unexpected complications.

If you’re planning to buy or sell property in Puerto Vallarta, consulting an experienced notary is essential. Have questions? Reach out to Notary 29 for expert guidance on real estate law, property taxes, and legal requirements in Mexico.