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Do I have to pay taxes on rental income in Mexico?

Are you thinking about buying a vacation home in Mexico? If so, you might be wondering about tax. After all, it’s not uncommon for people to buy property in other countries with the intention of renting it out as an investment. However, there are some important things that you need to know about taxes on rental income in Mexico.

Yes. You will have to pay taxes on your rental income in Mexico.

Although this may be a good thing to hear, you will have to pay taxes on your rental income in Mexico. In fact, the Mexican government imposes income taxes, IVA and other taxes on all rental income derived by Landlords from renting properties in Mexico. You must pay these taxes even if you do not live in Mexico.

The amount of tax you will be required to pay will depend on several factors but mainly your rental income and the type of property being rented out (whether it is commercial or residential property).

It’s called the 25% withholding tax. That means that if you rent out your house for a month, and it costs $10,000 in rent, you’ll have to pay $2,500 in taxes.

Note: We are not tax specialists in Mexico. You should seek advice from a specialist who are update to date with taxation policies and changes for Americans who own rental property in Mexico.

Seek advice from a Mexican tax Specialist who helps Americans

If you’re an American citizen in Mexico, seek advice from a Mexican tax specialist who can help you with the best course of action. A specialist who helps Americans is the right person to talk to if you have any questions about your taxes or are facing difficulties due to inconsistent tax laws.

In summary

In the end, you will be required to pay taxes on your rental income in Mexico. You should expect that the amount of tax you pay will depend on a number of different factors as an American. Seek advice from a tax specialist in Mexico who work with Americans.

Related articles:

How Americans Can Profit By Investing In Mexican Rental Properties

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