By law, foreigners are required to pay a “Mexican Capital Gains Tax,” at the time they transfer their rights to their “Fideicomiso.”  Normally this “Mexican Capital Gains Tax” is withheld from the proceeds of your sale.

The “Capital Gains Tax” is based on 25% of the sales price or 28% of the gain. An example: If the value, which shows on the Fideicomiso, was $40,000.00 and seller is transferring title at a sales price of $150,000.00 the gain at 25% of sales price would be $30,000.00.

Your tax liability at 28% of gain, would be $44,000.00. Using the 28% method you can deduct the cost of all improvements, and commission for selling the property, if you have the proper facturas, a specific type of Mexican receipt.

If your property has been improved and you have “facturas” for all of your cost of improvements, you could ask that the property to be re-appraised. This could bring the registered value closer to the selling price, which could decrease your capital gains tax.

Definition of "Factura"
A Factura is an official "receipt" so to speak that is recognized by the government for tax's and other accounting purposes. Each business in Mexico is issued an R.F.C. number which allows them the capability to generate an official Factura. A copy of a check or receipt is not considered a Factura and will not be considered by the government.