Puerto Vallarta, Mexico - Since January 2011, many Puerto Vallarta homeowners and homebuyers have had some issues regarding the Predial (property tax.)

This year, approximately 25,000 Puerto Vallarta homeowners have received documents stating that there are property tax payments due since 2006. Even those who have paid their property taxes in full each year and those who purchased real estate last year and received a Notario's certificate of no outstanding amount for Predial or no liens on the subject property, are receiving these notices.

This is happening because in 2009, City Hall decided to fire the appraisal company they used and hired a new one, which took over in 2010 and created a new blue print of the city of Vallarta for Catastro (City Hall's property division.)

The new appraisal company took aerial pictures of Puerto Vallarta, and the computer made a new autocad division of all of the properties in Vallarta. Because of this most homeowners were affected, as the system is telling City Hall that there is more construction than there actually is on some properties.

This has happened to several of our clients, and in some cases, the documents say that there is construction on empty lots. Apparently, the aerial camera does not differentiate between homes and smaller structures such as huts, terraces, palapas, etc., it only responds to geometrical shapes, which are measured by the computer, then sent to Catastro.

(Remember that in order to be considered construction, buildings must have 3 walls and a roof - if it does not, then it's not construction. With this in mind, if you have added a palapa or hut to your property, you don't have to pay for an increase in construction size.)

What it means when you receive a document from Catastro stating that you owe X amount of money and a fine, is that, according to them, there is more construction on your property than what is declared and on record. That is why you'll notice pro rated amounts lower than the actual property tax paid in past years, most likely ranging from $50 to $300 pesos and outstanding since 2006.

In order for you to correct this you have to go to Catastro, request a form to get a new appraiser sent to the property, and wait for them to submit the report. Castatro must make the amendments in the system andsend a request to the Treasury Department to void the fine and change the amounts. Once the appraiser has visited your property, you must present the document from the treasury department to Catastro, and then everything will be ammended.

I was at City Hall recently, and it seems impossible to surpass the bureaucracy, but believe me, you can do it. If the size of your home is the same as stated on your deed or past property taxes, and no additions have been made, the new appraisal will determine the actual amount to be paid.

By the way, the request form will cost you $68 pesos. When filling out the form, be sure to include your telephone number and instructions for the appraiser to call before he comes to appraise your property (which they say takes between 22 to 30 days from the filing date, but specific dates/times are not given.)

It is very important that you file this form immediately. If you let it go until next year without resolving the discrepancy between the deed and City Hall's records, the inaccurate information will be in the system, which means that in the event that you decide to sell your house in the future it will not only make it harder for the Notario to close but also, most likely, increase closing costs.

I hope this information will help you. Please pass it along as most foreigners are just paying these "back taxes" thinking that it is an increase in property taxes and not realizing that, left unresolved, it can be a really big headache in the future sale of their property.

Jaime Elorriaga is an Office Administrator/Real Estate Agent at VIP Vallarta Realty, Inc. Contact him at jaimevipvallarta(at)gmail.com.