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Reinvestment of habitual residence | Permanent residence

What is the homestead reinvestment exemption?

When we sell an apartment or a house, we obtain a series of benefits that will affect our income statement.  However, the profits obtained in a purchase and sale operation will be exempt from payment if they are invested in the acquisition of another habitual residence or in the rehabilitation of the dwelling that is going to have this character. Real Estate

What is the term to reinvest in habitual residence?

If we want to benefit from this tax exemption, we must adjust to certain situations.  Moreover, this supposed benefit does not occur automatically, since it depends on different factors , time being one of the most important.  For example, if the reinvestment in the habitual residence is made in the same year in which the profit is made, there is no need to carry out any formal procedure .

However, if this reinvestment occurs in a fiscal year other than the one in which the benefits were obtained, it will be necessary to indicate it in section G2, page 10, and in G5 on page 11 of the Income Statement.  In any case, the maximum term for the reinvestment of the amount obtained must be made , once or successively (for example, in installments through a mortgage), in a period not exceeding two years .

Likewise, the acquired home must become the habitual residence of the taxpayer (effectively and permanently) within a period of twelve months , counted from the date of acquisition or the completion of the appropriate works.

What happens if I make the reinvestment after this time? Can I benefit from the exemption in the payment of personal income tax?

If the purchase of a new main residence is made outside the two-year period, the benefits obtained will be computed as a “capital gain” in the Income Statement , and will be subject to the payment of the corresponding taxes, with a tax of 19.5%, without the possibility of enjoying the exemption for reinvestment in habitual residence. On the other hand, we must not forget that, for tax purposes, the property that constitutes their residence for a continuous period of at least three years is considered the taxpayer’s usual residence. The registration is not considered by itself a sufficient element for a dwelling to have such consideration , nor is moving or maintaining the fiscal domicile in a certain place. This situation affects both the home we sell and the one we have bought or are going to rehabilitate. Interior Design

When you have an offer to buy, seek advice. It is highly recommended that the deposit contract be made with supervision. Currently, you have many ways to advise yourself or seek advice on how to sell a flat. At Zuberi Builders we offer you all the advice you need from the first moment. In this way you will not have to worry about how to sell your flat, but about the profit you will receive after its sale.

Calculate the total costs of the sale

It is important to point out that having sold a flat at a certain price does not mean that that amount enters your coffers. You should keep in mind certain costs, such as: Costs and expenses of cancellation or mortgage subrogation You need to check the conditions of the mortgage. In particular, you should inquire about the mortgage cancellation or early repayment fees. You should also consider the possibility of subrogating the mortgage on your flat.

The commission for the sale of the Real Estate Agency With our services this does not happen because from the first moment you know what the fixed sale price is. Tax costs and Other expenses Such as advertisements, lawyer expenses, payment of services, management, registration, notaries, repairs and redecoration of the apartment, etc. These are some of the most important extra costs derived from the sale. However, you will have to take into account all those that affect you.

Prepare your floor

This is a key point when it comes to making a quick and successful sale. It is estimated that already in the first minute, the buyer has decided if he likes the property or not. In such a way that you must work hard to conquer with that first impression. Thoroughly tidy up and clean, as well as repair everything in sight. Keep in mind that dozens of buyers will visit the apartment and compare it with the state in which they have found other properties for sale .

The purchase criterion that is logical to follow when faced with similar offers is, without a doubt, the state and the image presented by the flat. Cleaning is not enough, you must also depersonalize the property as much as possible , get rid of the photographs, collections and all the elements that make the apartment “your space”. By neutralizing the flat, the future buyer can “imagine” living there.

Order photographs with a professional and write the ad

For the ad to be impeccable you will need some professional photographs . It may seem frivolous to you, but it is not. The image is what leads potential buyers to make a first selection of the flats that interest them, and the quality of your ad can be the difference between selling and not selling.

Real estate is one of the most important and most expensive industries in our lives. So, it’s a good idea to know what you are talking about when you talk about real estate. As a real estate agent, you have to know all the terms and conditions of buying a house. You can’t just look at the price, you need to know what it is worth.

Buy and sell

The Federal Civil Code defines the sale as the process in which one of the parties agrees to transfer ownership of something to another individual, and this other individual agrees to pay for the acquisition of this object. In real estate, the contract of sale refers to the acquisition of real estate.

Promise of sale

You may have found the ideal house and you are ready to buy it, but formalizing the purchase and scheduling its deed is not an immediate process. As long as the purchase contract is not formalized, the house of your dreams can continue to be sold to the public, and you could lose it at the hands of another. To avoid this situation, there are promises of sale, a contract that is made between the owner and the interested party, in order to ensure the future sale of the property, establishing its future conditions such as the date of signing the contract of sale, and price.

Capital gain

When acquiring a property, you must pay the established commercial value of the property. Many times, over time, this value can increase thanks to external factors such as improving the service infrastructure, development of the area, or changes that you make such as remodeling. The increase in the value of the property is known as capital gains, and it is important that you keep it in mind when purchasing a house, as this value could translate into a profit.


When applying for a mortgage loan to buy a house, it is common for the bank to require an appraisal of the property. The appraisal is an appraisal of the property to determine its market value. The appraisals are carried out by expert appraisers, who are certified experts, and are capable of evaluating the property following established methods. This allows the appraisal to be impartial and reflect the true value of the property.


A lien is a restrictive financial obligation that is placed on property. A house is under lien if there is a mortgage on it, it is in lien, or there is some type of restriction such as having a right of usufruct. Many times when applying for a mortgage loan, financial institutions will require to know if the property is under lien. For this you must request a Certificate of freedom from encumbrance in the Public Registry of Property.

Public Registry of Property

The Public Registry of Property and Commerce is a government body, in charge of registering all properties in the national territory, as well as the data of their owners, and giving public access to this information. The Public Registry of Property helps to provide transparency to real estate processes such as the sale, lease, inheritance, and the application for mortgage loans.

Mortgage credit

When buying a house, it is very likely that you do not have the capital to pay the price of it. According to the National Catalog of Financial Products and Services, in Mexico there are more than 400 financial institutions that offer loans to buy houses, through mortgage loans. The mortgage loan is a long-term loan where the financial institution takes the property to be purchased with the loan as collateral for payment. In case of acquiring a mortgage loan with the intention of buying a house, the amount that the institution will grant will rarely be greater than the commercial value of the property.

Title deed

The property deed is the document that guarantees the owner of a property as its owner. This document protects you in case you apply for a mortgage loan on the property, lease it, or sell it. According to the National Association of Public Notaries, the cost of a deed is between 4 and 7 percent of the value of the property, although it varies depending on the entity. This document must be made by a notary public, and registered in the public registry of the property, otherwise it will have no value before the law.

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