When you rent your property in Mexico or plan to live here most of the time, it is highly recommended you get your Residency Card (FFM). You will need your Residency Card to collect income, work, bank, and pay taxes in Mexico.
Currently, there are two types of Residency Cards.
Permanent: Apply once good forever
Temporary: Good for one year, then the next year, when you apply to renew, you can request a 1, 2, or 3-year card.
Renting Your Property, Things to Know:
- Rental Impact Fee: Most Communities will have a Rental Impact Fee. A Rental Impact Fee that the community will charge to you rent your unit. Most times, it is a per reservation charge.
- Rental highs and lows: High months are March, June, July, and half of August and October. Medium months are April, May, and the other half of August. Your slower months are September, November, December, January, and February. However, even those months are not that slow because they have holidays in them and some special events or seasons. For example, January has New Year and whale watching season.
- Taxes: Rental taxes accounting fees. We pay $50 a month to our accountant in Mexico. He handles the taxes for us. You have occupancy taxes that are just under 4%, and then there are income taxes that there is a sliding scale of 100%, 90%, 80%, etc. discounts each year on taxes. It is set up as a small business, and they give you discounts descending each year to allow you time to build your business. VRBO just started collecting a 16% IVA tax, but they add it to the listing, and it is a separate charge that is collected from the guest, so it has not come out of our rental rate.
- Property Management Compains: If you do not want to rent through a property management company, you will find their fees and services will vary. A general guide management companies charge between 15% to 35%. They will all vary in the services they offer.
- Where You Can and Can't Self Manage: Some communities will require you to use their on-site management company (Example Las Palomas). Others communities will allow you to self-rent, but if you want to use a management company, you must use their on-site rental company (Example Sonoran Properties). Something to keep in mind while looking at properties.