US Citizen with Property in Mexico, Paying Mexican Taxes

Karen3152
Level 4
Sacramento, CA

US Citizen with Property in Mexico, Paying Mexican Taxes

It took months, but as a U.S. Citizen, I finally got a Mexican Tax ID (RFC) and registered with AirBnb.  Here is what you must do in order to have AirBnb withhold the ISR (income) and IVA (sales tax) and forward to the Mexican government:

 

1.  You must obtain temporary or permanent residency.  You should have a passport that will not expire during the time it takes to complete the entire process.  It is extremely helpful to find a facilitator in the area where you own Mexican property. to help you through the entire process.  It does not have to be a lawyer or accountant.  This begins with a visit to the Mexican Consulate nearest you in the U.S.  Be aware that in your interview, they will tell you that the purpose of a residency card is that you intend to move to Mexico.  However, they do not require you to sell your home in the U.S. or prevent you from visiting or staying at your home in the U.S. Visit: https://consulmex.sre.gob.mx/sacramento/index.php/visas for more information.  Each consulate office requires different documentation, some require more, some less.  Be sure to check with the particular office you are going to.  You MUST select the right kind of appointment (VISA), if you select the wrong kind of appointment, you will be wasting your time. NOTE: for U.S. Citizens, your nationality is: Estadounidense

 

    a.  Owning a property in Mexico helps to assure your approval.   Bring the title with you to the Consulate.

 

    b. If you already have a property in Mexico, be sure to have the electrical bill placed in your name.  You will need this document through every stage of the process.  You will need some kind of proof of your Mexican address.  

 

2.  Once the Consulate approves you for temporary or permanent residency, you have 180 days to travel to Mexico.  Once in Mexico, you have 30 days to go to the Immigration (INM) office in the Mexican province (county) of your Mexican address.  Some offices require appointments, some don't.  This is where your facilitator will be of great help.  Have them get you that appointment as soon as you receive your Visa from the Consulate.  Some INM offices are faster than others, you may have to come back a second time to get your residency card.  A second visit could take anywhere from three weeks to two months.  I got my residency card the same day, but I waited 4.5 hours.  You may need to bring chairs, water, lunch, etc.  Your facilitator will know how the office is currently operating.  If you can travel during low tourist times, your chances of minimal wait times are better.  The residency card is your CURP - which identifies you as a resident or citizen, but does NOT serve as a Mexican Tax ID - that is an RFC.

 

3.  As soon as you have your residency card, your facilitator should make an appointment at the nearest SAT office located in the province of your Mexican address.  It took me more than one month to get an appointment after I got my residency card.  My facilitator said he got me on a waiting list even before I got my residency card.  Some SAT offices may accept walk-ins.  This is where your facilitator can be of service once again as not all SAT offices operate the same.  My experience was, I got my RFC and Fiel (electronic signature) on the same day in 1.5 hours.  

 

4.  Upload your RFC to AirBnb.  Click on your picture Avatar > Accounts > Payments & Payouts > Taxes.  You should see a button "Add International Taxpayer."  I could not see this option and had to be relentless with AirBnb support for 4 days to get them to finally add that button.  Click on your Avatar > Help > Contact Us.  

 

5.  Airbnb says the 16% VAT is automatically charged to the guest and should be a part of your withholding certificate.  You should not need to add additional fees for this.

 

6.  Taxes need to be filed every month on the 17th.  This is why you need an accountant.  Often it is an accountant who serves as the facilitator to help with the residency process.  

 

7.  Once you have uploaded your RFC to AirBnb, you will receive an email from AirBnb on how to login to Facturify.com to download your withholding certificates.  

 

8.  You should be able to continue to send payouts to the US.  I pay all my Mexican bills either through Xoom.com (CFE) or XE.com (Property Manager), etc.  I use my CapitalOne credit card (no fees, great rates) and my Credit Union ATM (low fees, great rates).  My accountant told me it is not required that I send payments to a Mexican bank, so I have not opened a Mexican bank account. But plan to stay a little longer in Mexico if that is something you and your accountant feel you need.

 

9.  Understand what a factura is.  You can't write off anything on your Mexican taxes without a factura.  http://www.bajainsider.com/article/what-factura-official-tax-deductable-document.

 

That's it.  I started this journey in late January 2022 and completed it all the way through on May 7, 2022.  It was not easy, but I finally made it.

 

28 Replies 28
Victor3788
Level 2
Calexico, CA

Hi @Karen3152 

 

I am a US and Mexico Citizen, I work in the USA but have a property in Baja that I want to rent with airbnb.

 

Any idea how to I pay less taxes ? as a US or Mex citizen ? how should I register the house ?

 

Thanks

Karen3152
Level 4
Sacramento, CA

@Victor3788 You are supposed to pay taxes in Mexico.  When I do my taxes in the US, once I check the box that it is a foreign investment, it does not raise or lower my tax burden, but that is my experience.  I found a Mexican law that says you are supposed to be able to get an RFC without residency, but I have not found anyone in Mexico that provides that service.  

Celina173
Level 2
Redmond, WA

Hey @Victor3788 , we are in the same situation, did you get any guide on this?

Thanks!

Thank you for sharing this detailed guide on navigating the process of obtaining a Mexican Tax ID (RFC) and managing taxes for an Airbnb property in Mexico. Your step-by-step breakdown provides valuable insights for U.S. citizens with property in Mexico, especially those considering hosting on Airbnb. This information covers various aspects, from obtaining residency to dealing with tax obligations, and could be immensely helpful for individuals going through a similar process. If you have any specific questions or need further clarification, feel free to ask!

Kelli383
Level 2
Ajijic, Mexico

I don't know who you spoke with at Airbnb, but they still are telling me they can't add my RFC. @Karen3152 

Karen3152
Level 4
Sacramento, CA

@Kelli383 they tried to ignore me but I was persistent. They kept trying to close out my complaint. I wouldn’t let them. If they do,You just keep filing a new complaint with their help system. 

Cecilia1105
Level 1
Riverside, CA

Thank you very much. This is exactly what I needed to know ..  @Karen3152 

Juan-Jose41
Level 1
Henderson, NV

Thanks for all the information it's very helpful. What I would like to know is since I'm a US resident and get my host payments on my US B

bank account, do I still need to do a monthly declaration to hacienda and pay taxes, or are the taxes being pay by airbnb? I have the pagos definitivos option.

Thanks, I'll appreciate any suggestions. 

Karen3152
Level 4
Sacramento, CA

The monthly accounting is what my accountant suggested for me.  It says once you choose either monthly or provisional, you can’t change it for 5 years.  However, here are the rules as posted on AirBnb:

https://recursosfiscalesairbnb.com/personas-fisicas/tus-declaraciones-de-impuestos-isr-e-iva/#3-%C2%...

Barry403
Level 1
Sebastopol, CA

Thank you so much for these details! So now that you have given Airbnb your RFC, will they no longer send your income reports to the IRS? 

Karen3152
Level 4
Sacramento, CA

I just got notice from AirBnb that I did not meet the threshold for a 1099-K because I did not have more than $20k in income.  I did not rent for the full year. However, research shows that I must report this income on my US taxes, which I will do. I did that for 2021 and did not owe anything. 

Karen3152
Level 4
Sacramento, CA

I got great advice by emailing the consulate office.  They sent me an email telling me what to do and when I could expect the appointment availability to come up on the website.  Yes.  It is tricky to get the appointment.  Hopefully, someone will respond to you like they did to me.

Shibani1
Level 2
California, United States

It is almost impossible to get an appointment at any consulate in California to obtain residency. Any tips on obtaining an appointment?

Barry403
Level 1
Sebastopol, CA

Las Vegas is known as one of the easiest to deal with

Karen3152
Level 4
Sacramento, CA

I got great advice by emailing the consulate office.  They sent me an email telling me what to do and when I could expect the appointment availability to come up on the website.  Yes.  It is tricky to get the appointment.  Hopefully, someone will respond to you like they did to me.

La-Dell1
Level 1
Los Angeles, CA

Do you have any tips for using Facturify?  That is a service that sort of automatically seemed to be available for me, but the interface is pretty bad, sometimes I see my VAT and other tax facturas, sometimes I don't.  I don't understand the menuing or what the various line items mean.  If anyone has figured it out I would love some insight.  Thank you.

 

Karen3152
Level 4
Sacramento, CA

I only see AirBnb withholding certificates on Facturify.  Everything should be on the SAT government website. My accountant accesses that web site because I can’t navigate it.

Karen3152
Level 4
Sacramento, CA

Sorry.  No idea.

SolMar3
Level 2
Scottsdale, AZ

Thank you so much for such a detailed information. What about us who have a timeshare? Do you have any information are we able to get the RFC number? 

Jay-and-Andrew0
Level 2
Rosarito, Mexico

UMMM WOW @Karen3152 THANKS!!!!!

 

 

what a hassle we have been having with our place in Rosarito