Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. Federal Trade Commission. CANCUN, MEXICO, BEACH FRONT VIEW, 2023 USAGE JUNE 17-24. Simon again phoned, and stated that a new law had just gone into effect in Baja California requiring the seller to pay a 16 percent tax $9,800 which needed to be sent at once. This time, Carlos came to the office and we had the most interesting chat on a speakerphone with our Mr. The victims usually believe them since they are willing to do whatever is necessary to recover their money. Mexico VAT Rate 16.00% About $16 tax on a $100 purchase Exact tax amount may vary for different items The current Mexico VAT (Value Added Tax) is 16.00%. Over the next few weeks, he wired: $4,000 for a Mexican notary's fees; $8,800 for. So, in past 17 years, how many times do you think they used their time share? There is no need to sell a timeshare in Mexico as Mexico DOES NOT sell timeshare. Rest assured that we are a. with an A rating and excellent customer reviews. Albuquerque, New Mexico, United States. Is a gain on the sale taxable? Bankrates content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The "Deed Transfer" Scam. If and when the timeshare owner victim calls the brokers number, which has been provided via email, phone call, postal mail, or on the website that has been created to complete the fraud, the voice of the supposed broker is actually the voice of the scammer.. Read on. So, whether youre reading an article or a review, you can trust that youre getting credible and dependable information. And, youll need a Mexican attorney to help you. :). Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Luckily there is a small safety net in Mexico a five-business-day grace period in which to cancel a timeshare contract (despite what the salesperson tells you). Professional Assistance Services for Real Estate, Find professional assistance service providers who can provide consulting and support to help you with your property-related transactions in Mexico. Within seconds it was obvious that Carlos was the victim of a Mexican timeshare resale scam. If not, make sure to buy at a brand-new resort (pre-building). -Lauren. BR Tech Services, Inc. NMLS ID #1743443 | NMLS Consumer Access. (By the way, Reader, I immediately informed the author of the above question upon reading it about the likely scam in the hopes of staving off additional rip-offs.). Mexico does not have the same regulations regarding escrow accounts as the US and Canada. The government in Mexico City has also set up a consumer protection agency known as, Procuradura Federal del Consumidor (PROFECO). Thanks to you both, I will relay the sentiments to him. Can any of the pro's in PV shed some light on this? Unless youre within the stipulated rescission period, your best option would be to sell or rent your Mexico property for money. If you transfer money, it is going straight to someones bank account, and you will never see it again. Be careful when selecting your timeshare exit company. As for a "luxury tax,". Report. "The taxes will usually be paid by the property manager, the HOA [homeowners association], or a common representative of the owners.". Bankrate, LLC NMLS ID# 1427381 | NMLS Consumer Access A timeshare is treated as real property under the law typically. If you have a loss on your sale, you should still show the sale on your return, even though the loss is likely not deductible. Weve maintained this reputation for over four decades by demystifying the financial decision-making When you have sold a property you may have to pay the Mexican government Capital Gains Tax. Bankrate.com does not include all companies or all available products. Protecting Your Home with Mexico Property Insurance, Guide to Real Estate in Mexico Free eBook, Mexico Home Finders: Helping You Buy Your Home in Mexico, Detailed Guide to the Cost of Living in Mexico 2022, Legal Matters: Finding a Notary Public in Mexico, Resources for Planning a New Lifestyle in Mexico, Estate Planning When Youre Living in Mexico. The FBI Criminal Investigative Division and the Office of Investor Education and Advocacy of the Securities and Exchange Commission ("SEC") would like to warn consumers of a recent increase in fraudulent schemes targeting owners of timeshare properties in Mexico. You need an expert to help and guide you through the process, using PROFECO and other resources. We advise the owners of timeshares that if they are interested in selling, do so through a notary public or a real state agency in Mexico. In most towns and cities across Mexico, home prices are quoted in Mexican pesos when they are offered for sale. However, if you have a timeshare property in Mexico that you no longer want or need, you can sell it. Step #2: Find the resort that you want. Despite the fact that many U.S. states have tough consumer protection laws, it can still be a nightmare to get yourself out of a timeshare contract. 11 years ago Save there is a 30 percent tax on any property when you sell it with a capital gain.if you are national or an immigrada who lives here full time you may be exempt Report inappropriate content brenda r Puerto Vallarta Level Contributor 10,893 posts 26 reviews 35 helpful votes We sold our timeshare in (ta && ta.queueForLoad ? If you have a taxable gain, report the gain on your income tax return, being careful to show the same number on Schedule D that appears on the Form 1099. Dont rely on hear-say and instead get the Notary Public to assess your individual situation and the taxes that will likely apply to it. So always consult your tax advisor before deciding how to treat an item discussed in this article. Accessed April 20, 2020. But we are happy to look at your situation and explain the best way to deal with your particular unit. The gross sales proceeds are usually equal to your selling price before reduction for any sales commission and other closing expenses. Finally, well talk about how Centerstone Group can use our expertise to guide you through the complicated process of a Mexican timeshare exit. Also, keep in mind that tax laws are subject to reform and because house purchases tend to be long-term investments, the tax laws which apply today might apply entirely, in-part, or not at all when you come to sell your property years from now. Can you sell your timeshare in Mexico if its not paid off? Renting your week occasionally, converting it to rental property in the year before sale or using it for away-from-home business during each year's vacation would likely not constitute enough business or investment use to justify such treatment. Email your questions to editors@mansionglobal.com. They have the licenses and know-how to finalize the sale for you and the buyer. It is not recommended to transfer money under any circumstance before receiving payment for the sale. In addition, investors should be aware of the 16% Value Added Tax. We value your trust. Second, well look at some unique problems that timeshare owners in Mexico face. Your gain or loss is the difference between your tax cost and your selling price, net of any selling expenses. They may ask that you wire a few thousand dollars to pay a tax and allow them to open a Mexican bank account in your name to transfer the compensation for the timeshare, again not correct. This means that you, as a non-Mexican citizen buying a timeshare, generally cant own a real estate interest in Mexico and wont be subject to foreclosure. A resale scam occurs when an outside party contacts an existing club member, and tries to convince them they have a buyer that wants to purchase their old timeshare membership. However, there are drawbacks to consider, such as high initial investment costs, potential maintenance fees, and difficulty selling. Said the $2,700 is a tax to Mexico that we have to pay before we get the money. First, though, the sellers will just need to prepay some contrived closing costs and other fees and deposit them into a sham escrow account for reimbursement upon closing, which of course, never happens. Sadly, the growing horde of frustrated owners trying to dump their overpriced, hard-to-resell vacation time shares has brought out an army of Internet scammers to prey on them. Net Value: Where 35% of the "net value" is paid which includes a number of deductions. . We find a renter for you, and then you book the timeshare rental in their name for a week. The net loss on sale would be $950 ($8,500 - $8,150 - $1,300). And, just like the United States, Mexico has a vast body of law that is complicated and often difficult to understand, even if you speak and read fluent Spanish. Be worried. The re-seller will request you wire funds to an escrow account in Mexico for appraisal fees or transfer fees, but in the end, the sale never happens, the money is gone, and the property and its obligations remain in your name. How should the sale be reported? Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), You and the Law: Beware of the Mexican timeshare resale scam, Dan Walters | Storms tell California to upgrade its plumbing, You and the Law | My employees are eating themselves to death, Matthew in the Middle | Progressive fantasies, Court roundup | Arcata homicide case, Watson probation hearing rescheduled, Humboldt County supervisors OK emergency storm declaration, Food for People steps up in wake of storms, quakes, Ukiah woman drowns in submerged car, Sonoma County officials report, Sam Bankman-Frieds parents buy him a dog, as he loses all other friends: report, Storms send sewage pouring into streets, creeks, San Francisco Bay and Pacific Ocean, Thieves are targeting Californias refund cards. There have been cases in which someone contacts those who have been victims of this kind of fraud by phone or email, offering them the reimbursement of the money they paid and subsequently lost. Check for answers weekly at www.mansionglobal.com. No, you do not have to pay tax on the sale of the timeshare in either Florida nor Texas because neither of them have an income tax. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. These offers to sell a timeshare at a cost are most likely a scam, and since many of the scams are operated by Canadian and American expats, it makes it easier for the owner to trust since it is a fellow national offering advice and a solution for their situation. You are also entitled to a refund of what you have paid. Example:Assume that you purchased a week for $7,000, your purchase closing costs were $500, you sold the week for $8,500, and various selling expenses were $1,300. How to Cancel Timeshare Contracts and Other Ways to Get Out. Its always a good idea to include pictures from surrounding places such as a beach or vacation spot. 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