FAQs
Do i need to pay tax on my Rental Property in mexico?
1
Absolutely. The country of Mexico, Mexican states and most municipalities have strict guidelines and obligations that require owners of short term rental properties to declare and pay applicable taxes. Non-compliance can result in severe fines, penalties and loss of ability to rent the property.
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what taxes are required?
2
Required federal taxes are IVA (value added tax), and ISR (income tax). Most states have required lodging taxes. Many municipalities require operating permits and some charge local sanitation and other taxes.
Why do i need help?
3
What does group 5 charge?
The proper declaration and payment of taxes is done monthly, and is a complicated process that requires the assistance of a certified accountant. Tax declaration as an individual or business requires a tax ID number (RFC), a Mexican bank account, and in some cases, proper immigration credentials. Knowing which expenses can be be properly deducted can be extremely difficult. Declaration and payment of taxes can be tedious and expensive when done individually. Using a company that handles transactions in bulk increases efficiency, accuracy and saves time and money!
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Doesn’t Airbnb pay my taxes for me?
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How does group 5 help me and save me money?
Advertising platforms like Airbnb and VRBO handle some tax retention and payment for rentals that get processed through their platforms. However, these tax retentions do not necessarily cover all declaration obligations that Mexico requires from the owner. In addition, the platforms retain large portions of the income for ISR, resulting in a huge loss of income for owners who allow rental platforms to handle this process.
We are all set up to declare and pay all required taxes, ensuring that your property can continue operating correctly as a short term rental. We also assist with the payment of many of your property expenses. And we can assist with helping you get the proper permits and licenses you need. Since we are set up to get deductions on applicable expenses, we can greatly reduce your income tax (ISR) obligation, allowing you to continue to list on rental platforms like Airbnb and VRBO, but without having to pay huge ISR tax retention payments. Clients that use us save up to 10% of their rental income.
For services related to federal and state taxes, we make our money by getting legal deductions on IVA and ISR taxes, so our service not only doesn’t cost you extra, it actually saves you money! For some state and municipal specific permits, licenses and tax obligations, we will build a custom plan for your specific needs. Contact us for details.