Owning Your Own Bit of Paradise Comes With Many Benefits
If you are thinking of buying a vacation home in Los Cabos and renting it out while you’re away, here are a few of the perks of choosing such an investment.
Make Extra Money
The biggest benefit of owning a vacation property is the ability it gives you to earn extra income. Airbnb alone is very popular in Mexico. But dozens of vacation rental sites (including the popular Vrbo, formerly VRBO and HomeAway) have changed how people vacation.
Tax Considerations
Keep in mind that in June 2020, a new law was passed in Mexico that allows the government to tax expatriate rental income. The law requires you to declare income and pay taxes or face severe penalties. If you don’t live in your property full-time, as a nonresident of the country you’ll have to file when income is received. The good news is that Mexico has tax treaties with 32 countries, including the U.S. and Canada. This means that you won’t have to deal with double taxation; the taxes you pay in Mexico can be taken as credits when you are paying taxes in your native country as long as it is one of those 32 countries.
Write Off Your Los Cabos Rental Home Expenses
In the United States, you can write off some of your expenses if you rent your home a certain number of days per month or year.
Similarly, if you rent out your home in Mexico for more than 14 days, the property is considered a business for tax purposes; and, with proper documentation, you can write off many of your expenses.
Your Home Away from Home . . . and Future Retirement Home in Cabo
Imagine how great it will be to skip the chore of packing all the vacation gear every time you want to get away to Cabo. And you’ll already know the lay of the land; you will no longer be a tourist in a foreign country. Putting down roots in a new community can be very rewarding.
Buying a vacation home that you can rent out is a great way to build long-term wealth while ensuring that you’re taken care of when you retire. Meanwhile, enjoy some extra income and the beachfront life!
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