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• Tax Changes: In mid January, the 2008 tax code, including the updated Capital Gains Tax, will be announced. If you have property on the market or a pending closing, this may affect your expected proceeds from the sale. The tax code is released in January every year; in recent years the tax rate has been slightly decreased, but fewer exemptions granted. If you accepted an offer on your property in 2007, but your transaction is still pending, the 2008 tax code will apply. Consult with your Notario Publico for the new tax rules.
• If you file a form 3520A (Beneficiary of a Foreign Trust) with your U.S. tax return, remember that the filing date for this form is March 15 of each year. See your U.S. tax advisor for advice on filing this form. Although the fideicomiso, or trust, in which foreigners must hold property in Los Cabos generates no income, many tax advisors are urging their clients to file the form with their taxes, as failure to report certain assets can result in penalties. If you’ve rented your Los Cabos property for vacation rentals, you will also need to consult with your tax advisor about the implications of this income (and related deductions) on your U.S. tax return.
• Attention realtors, developers and others doing business related to real estate: to have your project or other real estate related news featured in Los Cabos Magazine please submit your information as a press release to: loscabos@realtyexecutives.com. Deadlines for submissions for 2008 are: January 1, March 1, and June 1. Deadline for the January 2009 issue is September 1, 2008. Please include contact information for a responsible party in your press release.
• Cash-Out Financing Now in Los Cabos: ILSMexico has announced that they are now offering Cash-Out Financing. Similar to Home Equity loans in the United States, these loans allow home owners in Cabo the option of refinancing their homes taking as much as 75% of the home’s value in cash to be repaid as a fixed rate mortgage with rates as low as 6.75%. Mike Meenan, Mortgage Banker explains that the actual rate will vary with the client’s credit rating, the loan to value amount, amortization period and how income is verified. “Obviously the better the credit, the lower the rate,” Meenan clarifies. His firm is able to provide cash-out financing based on full documentation, stated income and no doc loan applications. There is no limit on the dollar amount of the loan, but loans in excess of $1,000,000 US are subject to review. “A cash-out refinance should not be a taxable event, thus there is no transfer tax or capital gain tax,” explains Meenan, who adds that properties currently held in a corporation may be an exception. Your realtor can put you in touch with lenders who offer cash-out financing.
• Mision La Serena, the high-end fractional ownership resort within Puerto Los Cabos, has recently affiliated with the Multiple Listing Service in Los Cabos and has added a new full ownership option. They have also added a second sales office at the new private marina in the development. Your MLS-member can show you the fractional and full ownership opportunities at this ultra high-end property.
• Last Chance at Hacienda Cabo San Lucas: Hacienda, the ultra luxury resort development on Medano Beach, is now taking reservations for Phase II, consisting of all remaining inventory. The second phase will offer 130 units, of which 14 will be freestanding oceanfront villas. The remaining units are luxury condominiums from one to four bedrooms, and penthouses in six and seven story towers. Located on Medano Beach, and adjacent to downtown Cabo San Lucas and the Marina, the location of this project is the most convenient in Los Cabos. Although there will be no car traffic within the development (golf carts will serve as shuttles), underground parking will be provided, leaving more green area in the family-friendly project. An upscale spa, pool area, bocce courts and other amenities are planned. Prices for Phase II start at approximately $750,000 US, and exceed six million for the ocean front villas. Many of the units will offer double views of both the Pacific Ocean and Sea of Cortez. A fully refundable deposit of $10,000 US will allow purchasers to participate in the selection event in May of 2008. At that time, purchasers will be allowed the opportunity to choose a unit on a first-come, first-served basis. Your realtor can arrange a tour of the site and take your reservation. The Phase I units are scheduled for delivery in the first quarter of 2009, with Phase II delivery projected for twelve to eighteen months later.
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