Tax Assessment

What is the Fiscal Appraisal?

It is the non-commercial valuation that the federal authority (SHF) or the corresponding municipality itself performs on a property or property in order to assign a tax lien What can be ISR (Income Tax) or ISAI (Tax for Real Estate Acquisition).

This mainly derives from the formalization of the acquisition of a property through a change in the deed and therefore, the owner of the property, either by purchase, by award or any other legal resource for which there is a change in the property owner.

The tax appraisal will help us pay taxes, as well as pay ISR. Said value has no relation to the commercial value, since they are exclusively tax issues, with the objective of setting a territorial tax, which in Mexico is known as contributions, the values are set by public entities for tax purposes. (SHF).

The Fiscal Appraisals They can be classified into three:

Appraisals for tax deduction for improvements (ISR)
Appraisal for Acquisition of Real Estate
Property Valuation

The main objective of a fiscal appraisal is to set a territorial tax, which in Mexico is known as contributions, the values are set by public entities for tax purposes.

What is a tax appraisal used for?

Fiscal Appraisals are used to calculate the Acquisition Tax (ISAI) and ISR. It can be conceptualized that by means of the physical value of the real estate, the tax lien or the corresponding deductible is intended to be measured, as the case may be, they are useful for the tax authorities and/or the user in particular.

When real estate is going to be sold, a mandatory ISR payment is incurred, according to the ISR law in article 205 It is possible to make a deductible and therefore lower the tax payment to ISR for selling a property when investment expenses on the subject real estate are verified.

When the investment in real estate is carried out in terms of improvements, the cost of the investments that have been incurred through the improvements and extensions to the property must be calculated, for this the total cost must be given in the opinion of value in the notice of completion of work. This as mentioned in the article 121 of the ISR law section II;

The tax authorities may take into account the appraisal as part of the investment costs when it has a value less than 10% with respect to the value of the investment contained in the notice of completion of work.

Who can make a tax appraisal?

In Mexico City, it can be a physical or moral person that has the current registration of the Federal Mortgage Society.

When is a tax appraisal necessary?

When the ISAI and ISR domain transfer is going to be carried out. For example, when a property is acquired for:

Buy and sell
Probate Judgments
Awards
Mergers or Divisions

It can also be used to set the condominium regime property specific. This must be under the format linked and necessary to the procedure and in any case with the relevant federal or municipal authority.

What aspects are taken into account?

To make a Fiscal Appraisal, the following points are taken into account:

Urban environment.
Location.
Use of the property.
Types of real estate in the area.
Physicals conditions.
Type of finishes and their conditions.
Taking photographs for the fiscal appraisal report.
Services in which the property is counted.
The profitability of the real estate.

If it is a Fiscal Appraisal from a date prior to the one performed, the following procedure will be carried out:

The value of the asset to the current date will be determined.

The value will be adjusted to the National Consumer Price Index of the month immediately prior to the one in which the appraisal was made between the index of the month for which it is required.

This result will be the value of the property on the date it was requested.

How long is a tax appraisal valid?

In accordance with Article 3 of the Regulations of the Federal Tax Code, which indicates:

Article 3: “The appraisals carried out for tax purposes will be valid for one year, counted from the date on which they are issued, for which, the Tax Authorities will accept the appraisals in relation to the assets that are offered to guarantee the tax interest or when it is necessary to have an appraisal in terms of the provisions of Chapter III of Title V of the Code.”

The appraisals referred to in the preceding paragraph must be carried out by the following appraisal experts:

The Institute of Administration and Appraisals of National Assets
credit institutions
Public brokers that have current registration with the Ministry of Economy
Companies dedicated to the sale or auction of goods

Who performs tax assessments?

The Fiscal Appraisal can only be carried out by Expert Appraisers with a professional license issued by the Ministry of Public Education in the matter of Valuation of Real Estate, depending on the situation or objective of said services, the appraisal expert must also have validity and certification before SHF, Treasury or as an appraiser registered with the corresponding entity.

How long is a tax assessment valid?

Validity of appraisals for tax purposes is valid for 1 year as long as the property has not undergone structural modifications or changes in economic conditions.