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Got Questions? Dear Mextax Answers…

Dear Mextax,

The condo we purchased through our corporation in a pre-sale last year has finally been completed and we are ready to take possession. However, we will be taking possession before the closing won´t have a copy of the title deed yet. We are excited to get our condo in the rental listings in time for high-season. Is there a problem renting it out before we have the title deed?

When you purchase a property through a corporation in Mexico, your accountant must register that property in your accounting records with SAT. Your accountant will need the title deed in order to register the property. Once the property is registered, you can begin receiving income into your corporation via the rental property.

While taking possession of a property before the closing is a common practice here in Mexico, SAT would consider it an irregularity if you began renting the property and reporting income if the property is not on file in the corporation´s accounting records. To avoid any issues with SAT, including fines or audits, we strongly recommend not renting the property until you have closed on the property and received, at least, a certified copy of the title deed. That way, your accountant can register the property with SAT and there will be no concerns about a visit from a SAT inspector.

Are you interested in learning how Mextax can help you with your accounting needs in Mexico? Just use the contact us form on our website and our Client Services Team contact you the same business day.