LARIVIERA Group’s Guide to Selling Real Estate in Puerto Vallarta and Riviera Nayarit 2023

As a seller, you might already have an idea of what you should do to sell your property and also, about what your next investment will be. However, you probably will have a long list of questions regarding the selling process in Mexico.

Below you will find the most common questions as well as additional information about the selling process in Puerto Vallarta and Riviera Nayarit. Start gathering information and outline the plan for your next adventure!

How much is my Property Worth?

To be able to determine a fair sales price, you need to do a Comparative Market Analysis (CMA). A Comparative Market Analysis consists of a report cross-referencing your property with other similar properties for sale in Puerto Vallarta or Riviera Nayarit.

A CMA is a great tool for sellers, especially foreign sellers, to price a property correctly but also to get a glimpse of current real estate market conditions. Ask your realtor to prepare a Comparative Market Analysis for you and help you establish a competitive price for your property.

Why Should I Hire a Real Estate Agent?

There are too many possibilities when it comes to choosing a real estate agent or agency to work with in Puerto Vallarta and Riviera Nayarit. Do some research. Find someone that:

• Is professional
• Is experienced in the local real estate market
• Is associated with a reputable real estate agency
• Is an AMPI affiliate

Take KW Luxury, for example, offering a network of real estate professionals in the area and worldwide, all with the expertise to guide and advise you during the process of selling your property in Mexico.

To achieve your goal and to get better results a Real Estate Agent in Puerto Vallarta and Riviera Nayarit will ask you to sign an exclusivity agreement with him or her, and to do some paperwork. Consider working with a local real estate agent who, besides bringing his/her knowledge to the table, could have an extensive list of contacts (appraisers, home inspectors, closing coordinators) and potential buyers, access to the local MLSs, will coordinate the home showings process and even negotiate offers on your behalf.

Is the Property in Selling Shape?

Prepare the property for the sale; make any necessary renovations and minor repairs that could potentially affect the selling process or have a negative impact on the price. If you were thinking about painting the kitchen or removing the living room carpet, do so now, before showings start.

Get rid of any piece of furniture or décor that is not included in the price and declutter all the areas making sure you have no personal belongings, family photos, or any other elements that could discourage the buyer or that could give him a reason to throw you a low ball offer.

In addition, for your property to be in selling shape you must have a deed (Escritura), all your utilities must be paid up and you should be up to date with your Predial payment and HOA fees if applicable.

What Amenities are Buyers Looking For Nowadays?

Think about the age of the property, when did you buy it? What are people looking for now?

Maybe your current home is a two-bedroom condominium at a mid-rise tower with amenities such as a private gym and pool and easy access to town, but the décor offers a more traditional look. Is that what the market is looking for now? Are there any upgrades you can make to the property to make it more appealing?

Do a little research! And partner with an experienced local real estate agent like David Moreno at La Riviera Group, who can share market insights and first-hand information that would be difficult to find online.

Am I Aware of the Selling Costs?

As in any real estate transaction, there are some costs that need to be taken into consideration before deciding to move forward. For a real estate sale taking place in Puerto Vallarta and Riviera Nayarit, consider the following:

• Real Estate Agent’s Commission: usually 6 to 8% of the final sales price (+ IVA) and it is paid by the seller
• Trust Cancelation Fee: foreigners buying a property in the Mexican Restricted Zone need a trust (also known as Fideicomiso) in order to legally own property in Puerto Vallarta and Riviera Nayarit. When you decide to sell your home, you need to cancel that Fideicomiso and pay the corresponding dues (typically a fixed fee, inquire with your realtor about an estimate)
• Capital Gains Tax (ISR)

Also, if you are behind payments (for example utility payments due and tax payments due like predial, to name a few), this is the time to catch up, otherwise, you won’t be able to sell your property.

What is the Capital Gains Tax (ISR)?

Capital Gains Tax (ISR) in Puerto Vallarta and Riviera Nayarit differ a bit from its counterpart in the United States or Canada. Here in Mexico, the gain from a real estate sale is taxed like a regular income, and the payable amount can go up to 35% of the established profit.

In order to determine the gain or profit, some costs or expenses could be deducted from the final sales price, commonly:

• Renovations or improvements made on the property (maintenance is not considered); adjusted to inflation
• Real Estate Broker’s Commission
• Taxes and fees paid by the seller during the closing process
• Original land cost and depreciated construction cost; adjusted to inflation

The Capital Gains Tax (ISR) is paid to the Notario, who will transfer it to the Mexican tax authorities (SAT). Your Realtor can provide an estimate of what the Capital Gains Tax (ISR) may be, advise you on a strategy and even verify if you qualify for Capital Gains Tax (ISR) exemption so be sure to ask your real estate agent about that as well.

Some of the requirements to qualify for an exemption of the Capital Gains Tax (ISR) are:

• Temporary or permanent Mexican residency visa
• Proof that the property you want to sell is your primary residence: Electric bill (CFE) or telephone bill (Telmex) in your name and with your RFC number
• RFC

This exemption has some conditions as well:

• You can only exempt the Capital Gains Tax (ISR) once every 3 years
• The exemption can only be applicable in the sale of a home or condo
• The exemption is capped to 700,000 UDI’s or approximately $4,536,000 Mexican pesos, and you will have to pay the Capital Gains Tax on the excess of the total amount of the sale

Are you familiar with the Closing Process in Mexico?

The selling process in Mexico differs from the selling process in the United States or Canada, but don’t panic! Instead, work with a local real estate agent like David Moreno, he will for sure save you from a lot of headaches.

There are ever-changing laws and considerations that you don’t want to learn on your own through trial and error. It’s just not worth the risk.

The closing process begins when you receive a formal offer to purchase your property, then come the inspection, appraisal, and all the needed paperwork; selling can be overwhelming and a professional realtor can help you answer unusual questions or sort out unexpected problems to occur during closing.

As in other parts of Mexico, in Puerto Vallarta and Riviera Nayarit, the whole closing process is overseen by the Notario (Notary Public), who reviews all the documentation, making sure everything is in order, and certifies the real estate transaction, additionally, the Notario will be in charge of calculating and determining the taxes that must be paid for the transaction.

We can’t stress this enough, make sure you review with your Realtor beforehand how much you will pay for Capital Gains and if you qualify for an exemption or deductions.

The closing is formalized when all parties sign the necessary paperwork and the property is transferred from you to the buyer. The buyer receives the keys to the house and you receive the payment!

Am I Sure About Selling? Why not Renting Instead?

Selling is a big deal. Think about your goals and how selling your property fits into them. Consider other possibilities, like renting, before taking this big step.

You could become a landlord and enjoy the income generated from your home, even maybe reserve the property to enjoy a family vacation once a year. Give it some thought and go over all your options.

Once you have considered all the possibilities and are ready to move forward, think of it as not your home anymore, it’s not your home now; it’s a commodity you are trying to sell. And try not to take it personally when prospective buyers criticize your choice of bathroom tiles.

How do I Promote or Market my Home for Sale?

You’ll definitely want your property to be listed in the local MLS.

In a few words, an MLS system is a tool for collaboration and compensation among real estate agents, and also a marketing tool to promote properties for sale.

Puerto Vallarta and Riviera Nayarit currently offer two MLS systems. The local MLS systems are a great place for potential buyers to find what’s on the market, but you need the assistance of a real estate agent in order to have access to this marketing tool.

Also, realtors have other promotional and marketing channels where they advertise their client’s properties, like social media, their contacts network, company’s website, other real estate websites, and even open houses which are a great way for people to get a close look at the home or condo for sale. All these tools can help you reach a larger list of potential buyers, and a professional real estate agent can assist you in making this happen for you.

As mentioned before, selling is a big step to take so be sure you are 100% ready and prepared. The information above might give you a general idea of the process but don’t hesitate on reaching out to David Moreno if you have more questions, he and the La Riviera Group team have the answers.