The notary obtains a non-encumbrance certificate
Agency: Public Registry of Property of Ciudad de Mexico (“Registro Público de la Propiedad y del Comercio de la Ciudad de México”)
Pursuant to article 3016 of the Civil Code for the Federal District, the notary before whom the transfer deed is being formalized must request a non-encumbrance certificate to the Public Registry. This request also acts as the mandatory pre-preventive notice (aviso preventivo) to the Public Registry, which suspends any inscription on the corresponding property for 60 days.
The applicant must submit before the Public Registry of Property and Commerce the following documentation:
- Application for request in triplicate, including the name and signature of the of the applicant, term of the certificate, location of the property and real estate folio.
- Proof of payment of fees established in article 198, section I of the Fiscal Code of Mexico City in duplicate.
- The application for request may also be made online, as well as the payment of fees.
This procedure can be done online at the following website: http://data.consejeria.cdmx.gob.mx/index.php/dgrppyc/certificado-de-existencia-o-inexistencia-de-gravamenes
Time and cost: 7 days, MXN 623 (MXN 623.00 (Regular – 7 days), MXN 1,246.00 (Urgent – 1-2 days) (Article 198 I(a) of the Fiscal Code))
The notary requests a commercial valuation of the property
Agency: Licensed valuer
A commercial valuation is required under the Fiscal Code of the Federal District to determine the taxable value of the property subject to transfer. Article 116 of the Fiscal Code of the Federal District establishes that the property tax shall be calculated taking in to account the highest of (i) the purchase price, (ii) the cadastral value, and (iii) the value resulting from the commercial valuation by the fiscal authorities or authorized appraiser.
The notaries usually have their own appraisers. Nevertheless, the parties may hire the appraiser they choose. When banks are involved in the transaction, they will usually bring in the valuers they usually work with. Sometimes parties have a previous valuation, and the notary can have it reviewed to see if it suffices. However, these previous valuations are usually not fiscal ones and therefore another one has to be done to determine the value of the property for the ISAI tax, but also for the VAT tax to which commercial constructions are subject to when transferred (please note that the land is not taxable under VAT, just the commercial constructions).
Time and cost: 7 days, MXN 18,171.63 (0.2% of the Property Value)
The notary obtains the Zoning Certificate of the property
Agency: Ministry of Housing and Urban Development of Ciudad de Mexico (Secretaría de Desarrollo Urbano y Vivienda de la Ciudad de Mexico or SEDUVI)
The Public Registry of Property and Commerce requires a zoning certificate of the property to be attached together with the application to register the property transfer. The notary shall request the zoning certificate at the Ministry of Urban Development and Housing (Secretaría de Desarrollo Urbano y Vivienda). The cost is established in article 235, section III of the Fiscal Code for the Federal District.
The applicant must submit an original and copy, the documents below with the corresponding delegation’s single-counter service. The authority will retain only the copies.
- Form TSEDUVICGDAU_CNZD_1.
- Proof of payment of property taxes to date.
- Proof of payment of fees.
- Official identification.
- Relotificaton or subdivision license, if applicable.
- Street number designation and boundary alignment certificate (certificado de alineamiento y número oficial), if applicable.
- Public deeds, if applicable.
- Copy of the cadastre appraisal.
- If the procedure is not carried out by the owner of the property, it must also submit a proxy letter or a notarized power of attorney.
- Companies should submit the incorporation act, power of attorney and official ID of the legal representative or proxy.
Time and cost: 6 days, MXN 1,542 (MXN 1542.00 (Article 235 III(a) of the Fiscal Code))
The notary obtains a certificate of good standing with the water service
Agency: Sistema de Aguas de la Ciudad de México (SACM)
Article 27 of the Fiscal Code of Mexico City establishes that the interested parties shall provide the notary evidence that the property subject to transfer has no outstanding debts to the water supply provider and property tax. This evidence should cover any outstanding from up to five years before the date when the public deed of sale and purchase is signed.
In January 2016, a new online platform was introduced to complete this procedure online (http://www.finanzas.df.gob.mx). In order to request this information (“constancia de adeudo de aguas”), the petitioner only has to submit the water utility Account Number associated with the property to the system and pay the corresponding fee of MXN 158.70. The certificate is valid for a period of 2 months.
Time and cost: Less than 1 day (online), MXN 167 (MXN 167.00 (Article 248 VIII of the Fiscal Code))
The notary checks the good standing of the seller on the property tax (predial)
Agency: Ministry of Finance of Ciudad de Mexico (Secretaría de Finanzas de la Ciudad de México)
The certificate of good standing of the seller on the property tax (“impuesto predial”) is one of the documents to be provided by the interested parties under art. 27 of the Fiscal Code of Ciudad de Mexico; the receipts of payments of the predial (boletas) are no longer required.
Since February 2015, it has been possible to obtain this information online (http://www.finanzas.df.gob.mx). The petitioner has to submit the Cadaster Number (Cuenta Predial) in order to obtain the information of any outstanding debts of the property for the last 5 years.
Time and cost: Less than 1 day (online), MXN 167 (MXN 167 if certificate of good standing (“constancia de no adeudo”) is requested, no cost if information is checked online)
The notary formalizes the sale purchase agreement
Agency: Notary
The notary public will request from the seller:
- Property title (escritura), which the seller already has
- Receipts evidencing the payment for real estate taxes for a period of five years (boletas del impuesto predial)
- Receipts evidencing the payment of water fees for a period of five years (boletas del servicio de agua)
- Public deed(s) containing the incorporation and by-laws of the seller company (escritura constitutiva), together with copy of any public deed(s) containing amendments to the by-laws of the seller company
- Public deed(s) containing the powers of attorney granted in favor of the seller’s representatives (for acts of domain and acts of administration in terms of the second and third paragraph of article 2554 of the Civil Code of the Mexico City)
- Copy of the official identification of the seller’s and buyer’s representatives
The notary will procure on behalf of the parties:
- Non-encumbrance certificate (obtained in Procedure 1)
- The zoning certificate (obtained in Procedure 3)
- The valuation (obtained in Procedure 2)
- Certificate of good standing with the water company (obtained in Procedure 4)
- Certificate of good standing in the property tax (obtained in procedure 5)
The buyer is subject to pay the acquisition tax (“Impuesto sobre Adquisiciones o Transmisión de Dominio”). In this respect, on the date of execution of the real estate purchase agreement before the notary public, said notary public will retain the above mentioned taxes and pay them before Treasury Department.
The scale of notary tariffs is with respect to the Notary Publics of the Federal District only. Other Mexican states have varying scales.
The seller will also have to pay the income tax and the value added tax as follows:
The applicable Income Tax for transferors resident in Mexico is 30% on the gain (the excess of the sale price over the adjusted tax basis). The tax basis of real estates is in general terms the original cost of acquisition as updated for inflation.
The value added tax (16%) is applicable only with respect to the constructions that conform to the property and therefore an allocation of the price to the land and constructions should be made in the sales agreement based on an appraisal. The value added tax will be shifted to the buyer.
The notary public shall calculate its fees as set forth in Article 15 of the Notary Fees of the Federal District (Arancel de Notarios of March 2018), taking into account the highest of (i) the purchase price, (ii) the cadastral value, and (iii) the value resulting from the commercial valuation by the fiscal authorities or authorized appraiser.
Time and cost: 3 days, MXN 527,645.42 (MXN 475,595.71 according to the case study (Property Acquisition Tax plus Notary Fees Tax)
The Property Acquisition Tax is determined, pursuant to article 113 of the Fiscal Code of the Federal District. The Tax schedule is as follows (cumulative and progressive fee schedule):
- From MXN 0.12 to MXN 98,973.75: MXN 239.95. Rate between these amounts 0.01275.
- From MXN 98,973.76 to MXN 158,375.95: MXN 1,439.53 Rate between these amounts 0.02715
- From MXN158,357.96 to MXN 237,536.70: MXN 2,972.26 Rate between these amounts 0.03548
- From MXN 237,536.71 to MXN 475,073.54: MXN 5,642.16 Rate between these amounts 0.04139
- From MXN475,073.55 to MXN 1,187,683.82: MXN 14,986.87 Rate between these amounts 0.04598
- From MXN 1,187,683.83 to MXN 2,375,367.65: MXN 46,127.95 Rate between these amounts 0.05023
- From MXN 2,375,367.66 to MXN 4,575,934.62: MXN 102,827.98 Rate between these amounts 0.05449
- From MXN 4,578,934.63 to MXN 11,916,496.98: MXN 216,795.36 Rate between these amounts 0.05667 [Applicable Rate]
- From MXN 11,916,496.99 to MXN 21,975,704.18: MXN 612,158.06 Rate between these amounts: 0.05716
- From MXN 21,975.704.19 to MXN 43,951,408.38 MXN 1,158,674.79. Rate between these amounts 0.05767
- From MXN 43,951.408.39 and up: MXN 2,363,163.15 Rate between these amounts 0.06265
Notary fees are calculated according to Art. 15 of the official Ciudad de Mexico Notary Fees schedule. The fee schedule is as follows (cumulative and regressive fee schedule). Notary Fees as of January 18, 2019:
- Until MXN 160,857.00: Fixed fee of MXN 4,917.00
- From MXN 160,857.01 to MXN 321,713.00: Rate of 1.125%
- From MXN 321,713.01 to MXN 643,428.00: Rate of 0.975%
- From MXN 643,428.01 to MXN 1,286,855.00: Rate of 0.825%
- From MXN 1,286,855.01 to MXN 2,573,711.00: Rate of 0.675%
- From MXN 2,573,711.01 to MXN 5,147,423.00: Rate of 0.578%
- From MXN 5,147,423.01 to MXN 10,294,847.07: Rate of 0.420% [applicable scale]
- From MXN 10,294,847.07 and above: Rate of 0.327%)
The Notary lodges the preventive notice (aviso preventivo) at the Public Registry of Property of Ciudad de Mexico
Agency: Public Registry of Property of Mexico City (“Registro Público de la Propiedad y del Comercio de la Ciudad de México”)
According to Article 3016 of the Civil Code of Mexico DF establishes that the Notary has to give a preventive notice to the Public Registry of Property during the next 48 hours after the public deed has been signed by both parties of the transaction. In practice, the Notary will fill up a specific form for the “aviso preventivo” and lodge it to the Registry the next day after the signature (sometimes even during the same say of the signature). This notice suspends any possible inscription to the property object of the transaction up to 30 days.
Time and cost: 1 day, no cost
Registration of the transfer of title at the Public Registry of Property of Ciudad de Mexico
Agency: Public Registry of Property of Ciudad de Mexico (“Registro Público de la Propiedad y del Comercio de la Ciudad de México”)
The notary public will proceed with the registration of the first testimony of the public deed containing the formalization of the purchase agreement of a real estate and the transfer of title, before the Public Registry of Property of the Federal District. After registration, the buyer will have to give notice to the corresponding water department, and any other company that provides any service to the property (i.e. electric company, water, etc.)
Time and cost: 30 days, MXN 18,407 (MXN 18,407.00 (Article 196 ‘I’ of the Fiscal Code))
