| | |  Puerto Vallarta Real Estate 
Mexico Resort Real Estate Update from The Settlement Company
 John K. Glaab - settlement-co.com
April 21, 2010
 |  | Now is the time to buy, rather than sell, Mexico Real Estate - unless the seller is really motivated. |  | | |
Welcome to our First Quarter 2010 newsletter. We are starting the new decade in a rather troublesome way. Three natural disasters in Central and South America have saddened the hearts of the world. Then of course we have a global economy that is bandaged and limping along. Many have been severely hurt and have suffered a change in life style. In spite of all of this, there seems to be a sense of optimism and resiliency in many quarters.
In earlier newsletters, I have spoken about the need for a crystal ball and a "one handed economist" to help with possible solutions. In the face of all of this there are some investors who are betting on the future. There are two interesting meetings planned for the next Quarter of 2010. Two of these are the A.M.A.R. Conference in San Antonio, Texas and the National Association of Realtors mid year meetings in Washington, D.C. More on these two events, below.
New Land Bridge Connects Baja California Sur Airports
A new airport shuttle is now carrying international travelers between the airports of San Jose del Cabo and La Paz. The new service is being operated by Eco Baja Tours. The modern vehicle is similar to those providing luxury service on Mexico’s mainland.
Busses leave the Malecon station at 7 am and 9 am. They will make return trips from the San Jose del Cabo Airport to La Paz at 2:30 and 5:00 pm. Developer and hotel associations are underwriting the new service, along with the State Tourism Department.
A one way ticket for the shuttle will cost $325 pesos. (About $25 USD or $27 CDN) Meanwhile the Mexican Association of Real Estate Professionals (AMPI) is working with the Secretary of Tourism to lobby for more flights to La Paz.
News from the NAFTA Trade Office
(courtesy of NAFTA WORKS newsletter)
Building New Bridges between Mexico and the U.S.
On January 12, 2010, Mexican President Felipe Calderon and U.S. Trade Representative Ron Kirk officially inaugurated Anzaldúas International Bridge, which is the first new land port of entry on the southern U.S. border to open in ten years.
New Mexico - Brazil Economic Partnership:
In the framework of a bilateral meeting held in Cancun on February 23rd, 2010, the presidents of Mexico and Brazil, Felipe Calderon Hinojosa and Luis Ignacio Lula da Silva respectively, announced that both countries have agreed to begin a formal working process to evaluate and determine the areas of opportunity, scope, and benefits of a Strategic Agreement on Economic Integration between Brazil and Mexico.
The objectives of this Strategic Agreement are:
• To promote the growth and economic development of both countries
• To increase the employment and well-being of Mexicans and Brazilians
• To guarantee the actual access to the markets of both countries, by coping swiftly and effectively with the existing trade barriers.
• To combine both production chains, including incorporating micro, small and medium enterprises, and
• To shore up the flows of trade, investment, strategic alliances and technology, and cooperation transfer.
Both presidents have stated that these are just some of the many benefits both countries can have by making efficient use of the complementary nature of the Latin Americas two largest economies. They also encourage their private productive sectors to promote the great business opportunities that will emerge as a result of this strategic agreement between Mexico and Brazil.
The Settlement Company Approved as Escrow Agent for BBVA Bancomer Loans
Mortgage loans through alliances between Mexican banks and their US counterparts are now becoming more available for real estate purchases in Mexico. Some banks offer loans for purchase, re-finance and construction. The Mexican banks processing these loans must handle funds through escrow.
After submission of documents and supporting information the settlement company is now approved as Closing Agent and escrow holder for loans made through BBVA Bancomer bank. At present these loans are funded by US Compass Bank. Thus, if you are making a loan through this bank, no matter where in Mexico the property is located, The Settlement Company can handle both the closing coordination and the escrow.
Taxes in Mexico
Following is an excerpt written by Donald Nelson, an income tax professional who shares his time between Mexico and his home in California:
If you own a property in Baja through a Fideicomiso (Mexican Property Trust) you are required to file Forms 3520 and 3520A each year with the US Internal Revenue Service. The Form 3520A is due 3/15/10 for tax year 2009 but can be extended if the extension is filed by that date using Form 7004. The form 3520 is due by the extended due date of your personal tax return.
Failure to file these forms by the due date or filing these forms late can result in the IRS assessing extremely large penalties. An IRS source (who does not want to be identified) has stated orally that if a late filing excuse is attached the penalties may be abated. This unofficial rule may not continue into the future.
Visit the Don Nelson expat tax site at taxmeless.com for more information.
Also on Mexican taxes, Linda Neil, Founder of the Settlement Company, has written an article on the tax responsibilities of foreigners living in Mexico. For a copy of that article, click HERE or send an email to info(at)settlement-co.com.
Taxes on Rental Income
New Mexican regulations can now make it simpler to pay taxes on income received from the rental of your Mexican properties. For additional information, please email quirino.parra(at)settlement-co.com.
Second Annual Real Estate Summit
For a second year in a row, NAR will host a special Real Estate Summit on Tuesday, May 11th at its mid year meetings. The summit will bring together real estate professionals, academic and opinion leaders, economists, government officials, and members of the media for a dynamic conversation about how to address real estate challenges across the nation. Stay tuned for more information about keynote speakers and times.
Editor's Note: I attended last year’s summit. It had been planned as a half day of panels, but ended up being a full day summit. Among the speakers were Alan Greenspan, former Head of the Federal Reserve Bank; Sheila Blair, head of F.D.I.C.; members of academia, the media and economists. The following day a Commercial Real Estate Summit was staged.
Other highlights at the Washington meetings will include: the Certified International Property Specialists (CIPS) Breakfast, where new CIPS designees will receive their diplomas and pins; the International and Second Home Real Estate Forum; the International Networking Reception; the MLS Association Executives Session; a Trade Show, and visits to several embassies and members of Congress. State real estate associations will caucus during the week.
Hotel News from La Paz
The Hotel Fiesta Inn at Costa Baja closed its doors earlier this month. It will be renovated and updated and open as a 4 star Heritage Hotel later this year. According to new General Manager, Jorge Notri, the hotel will be continued to be owned by Costa Baja, but will be managed by the Grand Heritage Hotel Group. The existing restaurant will be enclosed and transformed into a specialty eating facility with world-renowned chefs.
John W. Cullen founded the Heritage Group in 1986. Grand Heritage owns and operates over a dozen independent hotels across North America and Mexico, including one of a kind and historic properties at world class destination resorts.
We understand, but cannot yet confirm, that a new five-star hotel will be constructed at Costa Baja. Alejandro Iberri, Director General of the project, reports that work is moving along on the new Gary Player golf course. It will be a spectacular course, with many holes having ocean views. The course is scheduled to open in November of this year.
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