The In-Depth Answer

You may be entitled to a partial exemption from capital gains taxes If you meet the following criteria: 

• you have not sold another property in the previous three years in which you claimed the exemption from the capital gains tax (ISR)

• the property you are considering selling has been your primary residence in Mexico

• you have residency status in Mexico.  

Although similar to a homestead exemption in the US, the capital gains exemption is slightly more complicated. 

Every qualifying person named on the deed who has residency in Mexico can receive the exemption. The exemption amount is based on the whole transaction value and not just the capital gain. It is also based on a Mexican financial index which fluctuates over time, often daily.  In the last few years, we’ve seen the exemption as high as $310,000 USD and as low as $225,000 USD for every qualified person named on the deed. 

If you are the only person named on the deed the exemption will be in the range stated above. If there are two people named on the deed the amount of the exemption will be doubled.

For more details, see How are Capital Gains Taxes Calculated? 

If you are selling soon, connect with one of our agents who can help you receive a capital gains tax estimate and develop a strategy to minimize or eliminate the capital gains tax that will be due when you sell.