How are capital gains computed on the sale of real estate?
Capital gains are computed based on ‘Stated Values’ that are provided by the Notarios at the time of sale. The actual transaction price, therefore, is not a matter of record and is not recorded in the land registration office as it is in some other countries. In Mexico, the government does not depend on the revenues from real estate taxes nearly as much as in most other countries. The ‘Stated Values’ are usually very nominal. ‘Stated Values’ can vary widely depending upon location and may be anywhere from 4 % to 14 % of the actual transaction price. Remember that the actual transaction price is known only to the buyer and to the seller – it is not a matter of record, and has nothing to do with the stated values. As an example, let us assume that we purchase property at an actual price of $100,000 USD and the Stated Value provided by the Notario is $10,000 USD. Let us further assume that we sell the property the following year for $200,000 USD. and the Stated Value provide by the Notari
