IN MEXICO THERE ARE MORE THAN 10 MILLION UNREGULARIZED PROPERTIES. FIND OUT WHY DEED IS SO IMPORTANT AND WHAT IT COST.
According to the National Institute of Statistics and Geography (INEGI), around 30% of properties in Mexico are duly titled, while, according to the Ministry of Agrarian, Territorial and Urban Development (SEDATU), there are more than 10 million properties not regularized throughout the country.
Why is deed important?
For any person, acquiring a property is the result of a great economic effort and it is not enough to finish paying to become 'owners'. Writing in your name is essential to be able to verify the ownership of that property. In other words, you guarantee the certainty and legal security that you are the owner of your house or apartment.
“Once the deed is done , you can contribute adequately to local issues such as property tax, property acquisition tax (ISAI) and public registration rights. By claiming the person as the owner of the property, they can be subject to credit and, upon death, the transmission of their assets to their beneficiaries can be done in a much more transparent and simple way ”, indicates José Antonio Manzanero, president of the National College Mexican Notary Public .
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Likewise, the deed is especially important when formalizing a purchase and sale process. In this case, the notary must corroborate that the property really belongs to the person who claims to be the owner. His job is to review the property documents and provide legal advice to the parties involved. In that sense, the deed is also a way to avoid real estate fraud.
The recommendation is that you never sign a contract, or give any type of advance or commit to make the purchase without contacting a notary to confirm basic information about the property for sale.
Steps to write
First you must go to the notary , who will request the title deed or deed of the person who is going to sell to deed. And, if the person who is going to sell appears as married in the title that accredits him as the owner, he must also present his marriage certificate.
Likewise, it must be ensured that there is no inheritance trial pending to be resolved, that the property does not have a mortgage or any other encumbrance (that it is up to date with the payment of property tax and rights for water service and public works).
On the other hand, the notary must obtain an appraisal of the property and, if it is located in the CDMX, a land use zoning certificate, which serves to prove the use of land for which the property in question is intended.
When all the documentation is ready, the notary drafts the deed project and coordinates a meeting in which the buyer, the seller, the financial institution (if applicable), and himself are present. At this meeting, the corresponding payments are made and the writing is read aloud so that everyone agrees.
Before signing, you must make the payment of the amount agreed in the sale and you must also cover taxes, fees and notarial expenses.
Once the taxes have been paid, the notary will prepare the testimony of the deed and process its registration in the Public Property Registry, thus ending the deed process.
Is it very expensive to deed a property?
Currently in the metropolitan area of CDMX the cost of the deed of sale of a home ranges between 4 and 7% of the total value of the property. The largest proportion of this cost are taxes and duties that the notary retains and has to pay to the treasury.
"The issue of public registration also influences, in entities such as CDMX or the State of Mexico it is a gradual and fixed rate, the least that must be paid to register a property in the Public Registry of CDMX is around 1700 or 1800 pesos. and the highest deed value is around 17,500 pesos ”, indicates José Antonio Manzanero.
What are the registration fees and who should pay them?
They are normally borne by the buyer, and are as follows:
- Property acquisition tax (which is local and in some places is called a domain transfer tax)
- public record rights
- Rights for obtaining certificates or certificates from various agencies (such as the certificate of freedom from encumbrances, certificates of non-payment of contributions, certificates of land use, cadastral plans, etc.)
- expenditures (payment to managers, transfers, appraisals, per diem, etc.)
- the notary's fees and the corresponding VAT.
Does the seller have to pay any taxes?
When a person obtains income from the sale of a property, that is, from its sale, he must pay Income Tax (ISR). This tax is only paid by individuals and in many cases it is withheld by the notary before whom the sale is made. There are some cases in which it is possible to exempt the payment of income tax or deduct expenses that are subtracted from the profit from the sale of the property and, as a result, a lower tax is paid or nothing is paid.
How long does the deed process take?
On average, and depending on each federative entity, about two or three weeks, from the moment you deliver the corresponding original documentation to the notary, until the signing of the deed. It all depends on the workload that public registries, cadastres and urban development secretariats have in terms of issuing certificates or accreditation of land use.
If I deed a piece of land and then build, should I re-deed?
“Not because there is already a deed that covers the surface of that land. When you decide to build a house, you must process a building permit, have a project endorsed by the authorities and, once the work is finished, give notice of the completion or occupation of that property. If a person later wants to sell that house, he does not have to re-deed, it is enough to have those three elements: the land deed, the construction and completion license, "concludes the president of the National College of Mexican Notaries.