Capital gains tax law in Mexico states that tax is owed on the profit the seller receives.

By law, you have two options when it comes to capital gains and you can use whichever is the better of the two options for you:

• You pay 28 percent* of the net profit. (There are a variety of deductions included in this option.)


• You pay 25 percent* of the gross sales amount with no deductions.

Although a 28 percent capital gains tax may seem high, Mexico does have several laws and procedures that will assist you in maximizing your cost basis, thereby reducing your net profit and lowering your capital gains.

The key is understanding these laws before you buy, not when you decide to sell.