Purchasing real estate in Mexico has changed dramatically over the past eight to ten years for foreign, non-Mexican nationals. Prospective buyers outside of Mexico's borders seeking to buy property can now enjoy greater legal freedom and ownership rights as mandated and protected under Mexico's new foreign investment law. Therefore, you need to be informed about the tax implications your real estate investment will have on your U.S. Tax Return.

Below are a few questions and answers brought to you by our very own Mexico Investing & Taxes Expert Maurice M. Glazer, Owner of Glazer Financial Network addressing some of most commonly asked questions and concerns on how to integrate your Mexican property purchase with your tax situation at home.

Frequently Asked Questions

A person selling a Mexico property (not a primary residence) for a gain, is he liable for both U.S. & Mexico capital gain taxes?
Generally, a person will get tax credits on his U.S. tax return, for Mexico taxes paid (no double taxation).

Can a Mexico property be bought as a second home? What is deductible for tax purposes?
Yes, Mexico property can be considered a second home, thus interest & property taxes are deductible on U.S. returns.

Are there wage & housing exclusions for U.S. citizens working in Mexico?
Yes, wage exclusion (up to $80K) & housing exclusion (for expenses over $32/day) apply for employees working abroad.

Can one invest Mexico real estate in a retirement plan?
Yes, with restrictions (annual appraisal / audit, bond coverage).

If you want to find out more about Investing & Taxes in Mexico, please refer to our Expert Maurice M. Glazer, Owner of Glazer Financial Network who states that, “If you are a beneficiary or trustee of a foreign trust, (i.e., Fideicomiso) or have a bank account with a balance over $10,000, you must file a special form.”