A legitimate company will not charge fees upfront, the commission or fee will be deducted from the sale price. We do not sell, trade, or otherwise transfer to outside parties your personally identifiable . The government in Mexico City has also set up a consumer protection agency known as Procuradura Federal del Consumidor (PROFECO) that offers some limited assistance with the process. It was a huge red flag which Don, like most victims, did not pick up on. Hello Doreen! When the alleged buyers have someones interest, they tell the seller he/she must carry out some paperwork in Mexico before receiving payment for the purchase. Read more Real Estate Adviser columns and more stories about real estate. We are an independent, advertising-supported comparison service. That wont work, though, because U.S. law stops at the border. Moreover, nearly all legitimate time-share resellers take any fees out of the proceeds at the end of the transaction. Is it required to apply for a temporary federal tax ID in Mexico to sell property? The Notary Public dealing with the matter will interpret the law; some will apply the capital gains exemptions only if the seller hasresidente permanente status; some Notary Public offices may apply the exemptions to foreign residents with residente temporal status. If you own a timeshare in Mexico and someone contacts you by phone or by email offering to buy it, you should be very careful. 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. And there should be no fees paid upfront. Talk with a licensed accountant or other professional firm who is experienced in property matters about getting a RFC if you hold legal residency in Mexico but dont currently have a RFC number and want to use this as a means to claim the tax deductible allowance when you sell your residential home. The net loss on sale would be $950 ($8,500 - $8,150 - $1,300). Finally, well talk about how Centerstone Group can use our expertise to guide you through the complicated process of a Mexican timeshare exit. 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. Weve helped hundreds of owners sell their timeshares over the years. 10,893 posts. RedWeek, Inc. is a Registered Seller of Travel in the following states: Warning: Your web browser is out of date. Please consider this an addendum to a recent column about time-share resale scams and legitimate resale options. But this compensation does not influence the information we publish, or the reviews that you see on this site. How to claim rental income and rules for reporting losses. First and foremost, you need to make sure that your rescission is well-documented. How much should you contribute to your 401(k)? Mexico has a cooling off period where either party can change their minds within five business days. . This is where a scammer will offer to transfer the vacation membership out of your name to a Mexican company for a fee. The gain on the sale of a timeshare is taxable for federal income tax purposes. process and giving people confidence in which actions to take next. Now that you know the destination in Mexico where you want your timeshare, you need to find a resort in that destination that sells timeshare. However, if the grace period has passed by the time the buyer realizes they have either been defrauded or do not want the expense or inconvenience of owning a timeshare, they look for ways to sell it and rid themselves of its obligations. * Mexican income tax law does not expressly state whether the foreign person selling a property must have temporary or permanent residency status to avail themselves of capital gain tax exemptions; it does, however, expressly state that the seller must be selling his/herprimary residence in order to qualify for tax exemptions on capital gains. You arent trapped at that overpriced Mexican beach resort. They might offer you a very attractive price for it, send you scanned documents to prove their identities and a signed contract. A week later, Mr. Centerstone Group has the expertise you need and an excellent track record in actually using these procedures to get the job done. We recommend that you seek professional advice from a Notary Public, tax accountant, or other professional/legal service firm in Mexico to get a detailed appraisal of your situation. Remember the chances of someone offering to buy your timeshare for more than you paid is very unlikely. This site does not have attorneys who are experienced in Mexican laws, but under no circumstances should you be required to pay any fees or taxes until closing, so the request by the company that such taxes be paid up-front indicates it is not a legitimate request. Bankrate.com is an independent, advertising-supported publisher and comparison service. "The taxes will usually be paid by the property manager, the HOA [homeowners association], or a common representative of the owners.". Losses on sales are usually nondeductible. At Bankrate we strive to help you make smarter financial decisions. The fees for the Notary Public are paid for by the buyer. We invite you to use our commenting platform to engage in insightful conversations about issues in our community. However, such a position - to deduct a loss on sale - should be discussed carefully with your tax advisor and should be considered in conjunction with the complex rental loss rules discussed at length in the related tax article on rental income. As a general rule, if a victim of fraud has not filed a criminal complaint, a police investigation cannot be opened and, without an investigation, there is no possibility of recovering the money from these criminals. Bankrate, LLC NMLS ID# 1427381 | NMLS Consumer Access And, just like the United States. Send it using multiple methods, including registered mail and e-mail. In 2004, during their vacation in Nuevo Vallarta, Mexico, Carlos and Maria purchased a $58,000 timeshare at Club Regina. But Ive got nothing to do with any of this, as they stole my identity and that of my real estate company which had been inactive for quite some time. The three main costs when youre selling a property in Mexico are: Its possible to market and sell your property without the services of a local realty agent; however, as we explain in our Guide to Realty Agents in Mexico, a good realty agent provides a marketing service, a conduit between the negotiating parties, and someone who will help to work through the paperwork to bring a property sale to successful completion. They may even refer you to a legitimate third-party reseller like us. . A fake timeshare purchase offer of $30,000 USD. Before you sell your ownership, we recommend calling your developer. Or, to ARDA for additional help. Which certificate of deposit account is best? Our team can help you get started with the process of selling or even renting out your timeshare. Many of the victims transfer even more money and never get anything back. Timeshare Resale Scams to Avoid: Another Mexico timeshare scam to avoid in 2021 relates to resale scams. with its Riviera Maya, Nuevo Vallarta, and Mayan Palace resorts. And for many Americans seeking a timeshare, Mexico is a nice beachfront vacation destination. Bankrate.com does not include all companies or all available products. I will get it back upon closing, Im told. Should you accept an early retirement offer? That rules out most popular timeshare spots like Cancun, Cozumel, and Los Cabos. Check for answers weekly at www.mansionglobal.com. These scammers obviously know enough about Mexican laws to twist all that tax information around when they target unwitting sellers. that offers some limited assistance with the process. Once the resort and the county remove your name from the timeshare, you have officially completed selling your timeshare in Mexico! Legitimate timeshare resale companies do exist. Those fees would be deducted anyway in the process if there was a 30% fee. No problem, I hate to see anyone taken. So, in past 17 years, how many times do you think they used their time share? Let us use that expertise to help you. Mexico timeshares are no exception. Only buyers pay closing costs in Mexico, as well as much of the world. However, a good ad and a good price is a great starting point. A notary public or a realtor will help the seller pay for the applicable taxes and carry out the necessary paperwork. CANCUN, MEXICO, BEACH FRONT VIEW, 2023 USAGE JUNE 17-24. As we explain in our Mexico Real Estate Guide, a Mexican Notary Public is a legal professional with very important statutory roles. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The first thing to keep in mind is that you, as an American citizen, are limited in the kind of timeshare Mexico will allow you to purchase. the land subject tothe sale must not exceedthree times the size of the construction on that land (measured in square meters); you can only claim this exemption once every three years. If the Mexican government was involved and requested funds, the payment would be made through a linea de captura or their website. Unlike property located in the US, you must depreciate the property (amount allocatable to . It was music to our clients ears. Rest assured that we are a. with an A rating and excellent customer reviews. We also tirelessly pursue timeshare developers for the full extent of your remedies under the law. https://mexlaw.com/can-cancel-timeshare-contract-mexico/, We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. To complicate matters even more, contracts may stipulate that the management company receives a commission for its sale, or places other conditions on resale. We lost thousands when we sold ours, but just wanted out from under the hassle of making the annual maintenance payment and trying to find a buyer for the week each year. General maintenance and home improvements, like remodeled kitchens or new bathrooms, do not count as capital improvements. Don't fall for being promised a reimbursement at closing. They will know the standards and practices of selling timeshare property in Mexico. Its questionable whether a notice or cancellation letter in English might be accepted by a resort, so it makes sense to have an expert who can help you with preparing those documents in both Spanish and English. In both the timeshare and fractional scenarios, the costs associated with property taxes usually are passed along to the members, owners and investors through their "maintenance" fees, he said. It is meant only as an approximation based on the latest information available and should not be relied upon for any other purposes. 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. I am a US reident. You are also entitled to a refund of what you have paid. Simon was not the real Matthew J. Simon. Timeshare properties are a way of having your vacation area available at your disposal and a way to make rental profits, as well. Once the resort and the county remove your name from the timeshare, you have officially completed selling your timeshare in Mexico! He wanted to know my opinion, and I told him it appeared to me to be a scam. 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