You’ve still got a week left to save big on your property taxes here in Cabo! Yes, depending on your definition of big.
When clients ask me about property taxes, especially if they are considering moving here, I always tell them not to worry. Annual property tax is simply not an issue here. For example, one of our listings is a three bedroom home in a gated community known as Maranata with community pool and party area. It is located on the corridor only about 3 minutes outside of town, and has lovely ocean views. I just looked up their annual property tax: the princely sum of $1004 pesos. Yes, that’s PER YEAR. At today’s exchange rate that is equivalent to about $75 USD. Again, that’s your property tax for the entire year. See, property tax is the least of your budgetary concerns.
But wait… there’s more! If you pay your property tax (in Spanish this is called the Predial) in January the city offers you a 20% discount. Which brings the taxes on this home to about sixty bucks: you’d drop that much on dinner without flinching. For payment in February the discount is 10%, and in March 5%, after that you pay the full amount. Amazing, eh? One of the big differences in cost of living here versus the US or Canada.
Now, how are you going to pay these ridiculously cheap taxes? It’s actually quite simple even if you don’t know a word of Spanish. Considering my clients told me at lunch last week their property manager quoted them a fee of $75 to do it for them it might be a fun adventure you can take on.
What you will need is a copy of last year’s receipt. It’s half the size of a sheet of paper and very colorful, with script running vertically that says ‘Los Cabos Recibo de Pago’. Your name will appear on it, and the words Impuesto Predial. Just take that to the Delegation (City Hall) and show it to the nice person directing traffic inside the door. The Delegation is the very large building flying an even larger Mexican flag all the way up Hildalgo Street almost to the Bordo bypass road. They’ll send you to a cashier who will take your money, print, stamp and give you this year’s receipt. This time of year it can get crowded with people rushing to take advantage of the discount, so try to go first thing in the morning. Only pesos are accepted.
That’s the basic course. For those wanting a graduate seminar:
- If you know the Clave Catastral you can check your balance online at http://www.eloscabos.gob.mx/ . The Clave is your tax ID number and is generally found on the first page of your Fideicomiso.
- The tax is much higher for unimproved lots, as much as ten or more times the rate for a finished home or condo. This is to encourage development. If you are building a home here do not pay off the builder until he or she provides you with copies of the paperwork manifesting the construction.
- If you don’t pay your property tax there are fines, penalties and interest that will be due. But, if you look sufficiently penitent (and have cash to pay in full) they can be reduced.
- The one and only debt that cannot be taken out of escrow when you sell your home is the Predial. So you might as well keep it paid up: when the property sells they’re going to get it anyway, and having to negotiate a reduction in fees may delay closing.
So that’s the scoop on annual property tax, and it’s only one more great reason to move to Cabo.
Carol Billups is Broker/Owner of Cabo Realty Pros. She has enjoyed working with both buyers and sellers for over thirteen years and still thinks hers is the best job on earth. She is also the real estate columnist for Los Cabos Magazine. You can read more of her articles on the website blog www.caborealtypros.com. You can reach her from the U.S. or Canada at 1-760-481-7694, or in Cabo at 044-624-147-7541. You can listen to our 24/7 broadcast on http://www.livecabo.net for a mix of happy music, weather reports and local information.
© 2014 Carol S. Billups