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Puerto Vallarta News NetworkPuerto Vallarta Real Estate 

1st Quarter 2018 Mexico Resort and Real Estate News

April 18, 2018

Baja California Sur led all other states for economic growth during the first 9 months of 2017. While agriculture and fishing are important sectors, the tourism and construction industries played a major role.

La Paz, BCS, Mexico - Welcome to The Settlement Company's First Quarter, 2018 newsletter. In this edition are previews of two upcoming real estate conferences; the opening of our new office in Quintana Roo; the story of Baja California Sur's economic growth, and a repeat of our post on paying Mexico rental property taxes.

Baja California Sur - Mexico's Rising Economic Star

According to Carlos Mendoza Davis, Governor of Baja California Sur, (B.C.S.) the state led all others for growth during the first nine months of 2017. Figures recently released by INEGI (Mexico's department of statistics and geography) B.C.S. registered an economic growth of 17.5%. Following B.C.S. were Puebla (9.0%), Nueva Leon (4.7%) and Guanajuato (4.4 %).

While agriculture and fishing are important Sectors, the dynamic tourism and construction industries in Baja California Sur played a major role. Ongoing international marketing has resulted in an increased awareness of the treasures and attractions of the Baja. One example of promotion was the participation at The International Tourism Fair. Held in Madrid Spain, more than 250,000 visitors came to see exhibits from 165 countries. The state was also a high profiler at the Travel and Adventure Show in Washington D.C.

While Los Cabos is the primary B.C.S. destination, B.C.S. business is great from one end of the state to the other. During a visit to Loreto, I found the Hotel La Mission del Loreto. The Guadalajara-Loreto-Los Cabos connection was operating at 100% occupation and this was not during a holiday period. (Since then new flights have been announced including a Guadalajara-Loreto-Los Cabos route. As well, the Villas Group operators of Villa del Palmar at the Islands of Loreto has announced they will be a sponsor of the Calgary Stampede in Canada in 2018.)

Hotels and restaurants in a Paz are busy. As well construction of several new condominium projects have been completed and are now being occupied. All five La Paz marinas are full. (Recently it was announced the FONATUR Marina and a large piece of land at that location have been sold. Details to follow.) Cruise ship and airlines are increasing service to our state. This bodes well for the future. Meanwhile, the state ranked second in job creation during March 2018. There were 3,513 full time new jobs created in one month.

Two Major Real Estate Conferences Coming Up

The National Association of REALTORS with 1.3 million members is the largest trade association in the world. Each November it meets in a different city and about 27,000 attend. The May meeting formerly known as the mid-year meeting is now called, The REALTORS® Legislative Meetings and Trade Show. Held in Washington D.C. it is attended by about 10,000.


This year's event is set for May 14-19th. Dr. Lawence Yun, along with a panel of three, will discuss recent events in the U.S. economy and their impact on the housing market. They will also provide an outlook for the second half of 2018.

New Certified International Property Designees (CIPS) will receive their badges and pins at the CIPS Networking and Pinning Ceremony. The Global Business Alliances Committee will be attended by members from the 89 organized international real estate associations affiliated with NAR.

The General Session will commemorate the 50th Anniversary of the passing of the Fair Housing Act. It will be attended by Rep, Emanuel Cleaver, a Methodist pastor and Representative for Missouri's Fifth Congressional District. The Agenda has been cleared from 2:00-4:30 pm on Wednesday, May 16, to allow attendees to make "Capitol Hill Visits." (Meetings with their local political representatives.)

Associated Realty of the Americas is an invitation only group of prominent, successful REALTORS®. With about 140 members its roster includes a Past President of NAR, the President elect of NAR. A Past President of the Women's Council of Realtors, Presidents of several state real estate associations and the liaison for legal matters to NAR and the California Association of Realtors. (The same member is Chair of NAR's Legal Action Committee) John Glaab, Linda Neil and Jay West represent Mexico. Carl Bosse of Green Valley, Arizona is our hard working President.

Following is a quote from the association's website:

"Associated Realty of the Americas (AREA) is a referral based international real estate company representing luxury residential properties, commercial properties, land, resorts and selected developments throughout North America including Canada, the United States and Mexico. Our affiliates are hand-picked based upon their character, background and professional standing and are considered, by some, as an "all-star" team of international real estate specialists. Our team understands the intricacies of international real estate, and is prepared to guide its clients, step-by-step, through all that is involved in the process of acquiring properties, no matter where."

In addition to monthly telephone conferences, the group hosts receptions at the two major NAR events. Once a year, AREA has a "Retreat". This year it will be held in Providence, Rhode Island. Included in the Retreat will be educational and social events.

The Keynote Speaker will be Sue Swenson. She is Chair of Board of The First Responder Network Authority, (FirstNet) The tragic events of 9/11 gave impetus to the formation of the organization Before taking on her current position, Sue Swenson led a successful career in the high technology industry, including Chile Operating Officer of T-Mobil USA. Ms. Swenson serves as a Director of Wells Fargo Bank. On the social calendar, Ron and Susan Phipps of East Greenwich R.I. will host a clam bake at Olde Buttonwood. Ron is a Past President of NAR.

What Expats Need to Know About Paying Taxes in Mexico

Since the rental tax item in the last edition prompted such great interest, it is being repeated. Two major items are: a) Remember that taxes paid on your Mexico income can be deducted from U.S. and Canadian taxes; and b) the Government of México is working with its tax department (SAT), immigration, and international banks to detect tax evasion by those not paying on rental income.

Items That Can Cause US Expatriate Tax Returns to be Audited by IRS
By Don D. Nelson, International US Tax Attorney

Remember the IRS can audit your return up to three years after it is filed and up to six years if you omit 25% of your income. The statute of limitations never runs out if you should have filed a US tax return but failed to. Dual Citizenship has no bearing on the requirement that you file a US tax return each year. For a list of items that can cause an IRS audit, please contact Don Nelson at the email address listed below. If you want to avoid IRS audits or need representation when the IRS does audit your expat or international tax return, email us at: ddnelson(at)gmail.com. Our website is taxmeless.com. In the US call 949-480-1235. In Mexico, call 624-131-5228.

Fulfilling Your Obligation to Pay Taxes on Mexican Rental Property
RentalTaxMexico.com

As with other countries the Mexican government expects nationals and foreigners alike to pay taxes on income in the country. Failure to do so can and has led to substantial actions and penalties. Even if the funds are received outside the country they are still subject to taxes here, because the income was generated in this country. Click HERE for more information and answers to two key questions.

The Settlement Company® in Quintana Roo

The company has been courted by the industry to open an n office there. A Manager is in place and we are ready to go. Next month staff from La Paz will travel for the opening of the office. While there, Linda Neil will offer a NAR designation course.. As well we will participate in the launching of a new bi-lingual MLS system: AQRMLS. Heidi Wosak is dynamic promoter of the system which will transform real estate in the region.

BREAKING NEWS - The Virtual Closing® System

The Settlement Company has successfully renewed its trade mark for our Virtual Closing system. Since the laws related to the transfer of property title are federal, as are the laws relating to real estate, we will continue and expand our closing services throughout the Republic of Mexico.


John Glaab is Director, International Marketing at The Settlement Company, Mexico's oldest title and escrow company. A Certified International Property Specialist, he is a founding member of AMPI Los Cabos and the new Global Mexico Real Estate Institute. In 2012, John was named the International Real Estate Member of the Year by NAR. For further information, contact John at John.Glaab(at)settlement-co.com.