.jpg)
| Destinations >> Mexico >> Fact from Fiction about Mexico |
|
By: Raul Jaime at Ventana Magazine
Do I need an FM3 Visa to buy property in Mexico?
No. You absolutely do not need an FM3 visa to purchase property in Mexico. Just to avoid any confusion, an FM3 Visa is an immigration document required by Mexican authorities for those who plan to spend more than 6 consecutive months in Mexico. There are several categories for this Visa depending on whether the foreigner will be working in Mexico, participating in other economic activities, retiring with income from abroad, etc. When most Americans and Canadians arrive in Mexico they are automatically given an FMT, or Tourist Visa, at the point of entry which is valid for up to 6 months. While this document is simply a small piece of paper, you will need to show it to the notario when you close on your real estate transaction.
As is the case in the US and Canada, people in Mexico are not required to pay capital gains taxes when they sell their primary residence. The notario, who ultimately decides and makes sure the corresponding taxes are paid on every transaction, will request proof that the selling property is the person’s primary residence in order to exempt them from paying capital gains taxes. While many notarios used to accept phone bills and utility bills in the name of the owner as proof of residence, the FM3 was sometimes also requested to support residential claims. However, there have been resent changes in Mexico’s fiscal laws that have affected which documents are to be allowed as proof of residence in Mexico.
Since an FM3 by definition is not a permanent residence document, it is no longer acceptable as proof of residence in Mexico. From now on, foreigners desiring to be exempt from paying capital gains taxes on the sale of their real estate must produce an FM2 document. An FM2 document is a permanent residence visa provided to foreigners that plan to spend extended periods of time in Mexico and make it their permanent residence. You may or may not qualify for an FM2 Visa depending on how many years you have spent in Mexico and your particular reasons for immigration. It used to be very simple to avoid paying any taxes when selling your property in Mexico; in my opinion it is a good thing to see the requirements getting stricter. After all, the services and infrastructure that continue to improve Mexico as a first-class resort destination can only come from collecting taxes.  |
