Real Estate & Finance

LEGAL BULLETS 2006
By Agustin Galindo

This month we decided instead of writing an article, to provide you with the latest bullets of legal information applicable for this New Year, which we hope will be useful for you:

• INCOME TAX 2006

Some of the Income tax law amendments were published on December 26, 2005 in the Federal Official Gazette containing, among other changes, the applicable tax rate for income tax for 2006, which is at 29% for corporations and individuals; also, below, you will find the applicable tariff for income tax on capital gains for real estate transactions:

Tariff

Please be aware that in order to determine in an exact manner the income tax to be paid in a real estate transaction, a specific calculation needs to be done in order to establish this tax in each case, i.e., update the value of the property for tax purposes in accordance with the applicable provisions, considering the years that the property was owned, calculate the capital gain and apply the corresponding tariff. Also if the seller is an individual or a corporation, or if the property consists of a residence, lot, or commercial property, if there are any applicable deductions and the possibility of getting a tax exemption.

• PROPERTY TAX PAYMENT

Please be aware that during January and February you can pay in advance your property tax and you can get a discount if you pay your property tax for the whole year of 12% during January and 10% during February.

• LABOR LAW CHANGES

On January 17, 2006 an amendment was published to Article 74 of the labor law for what will be known as “long weekends,” that is to say, holidays to commemorate February 5 (1917 Constitution day), March 21 (birth date of President Benito Juarez) and November 20 (Revolution day), holidays that will be enjoyed as follows and respectively, the first Monday of February, the third Monday of March and third Monday of November instead of these specific dates. This amendment is applicable for 2006 except for the corresponding holiday for March 21 which will be applicable to 2007.

• MINIMUM WAGES

The applicable minimum wage per day applicable in 2006 for the three geographical areas in which the Mexican Republic is divided are the following:

“Zone C” is the corresponding zone for the State of Guerrero.

Agustin Galindo is an attorney at law and founder of Galindo Abogados, S.C. Fully bilingual, he specializes in real estate, tax, civil and commercial matters including litigation. You can contact him at agustingalindo@prodigy.net.mx or you can visit the firm’s website at www.galindoabogados.com Telephone numbers: 755-554-9915 and 755-554-9916

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