Do I have to file at home while living in Mexico?
Residence decides it, and residence is a question of facts rather than of where your post arrives. The one exception is US citizenship, which carries the filing obligation with the person wherever they go. So the first thing we establish is which system still claims you.
Is there a treaty between my country and Mexico?
Possibly, and the version in force for your year is the one that matters — protocols and multilateral-instrument positions change what a treaty does without changing its name. We check it against the authority rather than a summary. Where no treaty applies, domestic relief takes over.
I own property in Mexico. Where is the rent taxed?
Rent from immovable property is almost always taxable where the property is situated, frequently by withholding on the gross amount, with your home country taxing the same income and giving credit. A net-basis election, where one exists, is usually the difference between tax on profit and tax on turnover.
What do I file for the year I move to Mexico?
Usually a return covering the whole year with the departure recognised in it, rather than nothing at all. In a residence-based home system the year splits at the date residence ends, with income before that date and income after it treated differently, and the return has to state when the change happened. Americans keep filing regardless of where they live. Either way, the departure year is the return that sets up every year that follows, so it repays being prepared properly rather than quickly. We establish the departure date first and build the return around it.
How is my departure date decided if I keep a house at home?
A home kept available to you is one of the strongest indicators that residence has not ended, and it pulls harder than the date on your boarding pass. Whether it is decisive depends on what else went with you — your spouse and children, your employment, your banking and everyday accounts, and whether the property is genuinely let to an arm's-length tenant or simply left empty for your return. Intentions count for very little here; the documentary pattern counts for a great deal. We assess the whole pattern before fixing the date.
Do I owe tax on things I still own when I leave?
Possibly. Several residence-based systems treat a departing resident as having disposed of certain property at market value on the day residence ends, so tax can arise on gains never actually realised, with particular asset classes excluded and elections sometimes available to defer it. Citizenship-based systems do not work this way on an ordinary move abroad. Reporting of what you hold on departure is frequently required even where no tax falls due. This is the part of the departure year most often missed. We inventory and value what you hold before the date.
Should I sell my home before I move to Mexico?
There is no single answer, and the question is really two. First, does keeping it affect when your residence ends — an empty property available to you usually does, while a genuine arm's-length letting usually matters less. Second, what happens on an eventual sale once you are no longer resident, including how the years of ownership are characterised and what a buyer or closing agent may have to withhold. Selling to solve the first question can create a taxable event you did not need. We set the two out side by side before you decide.
Does buying a house in Mexico end my residence at home?
Not on its own. Acquiring a home in Mexico is evidence that you have settled there and it matters, but your home system is looking at whether ties at home have been severed rather than at whether new ones have been formed abroad. Somebody who buys in Mexico while keeping a house, a family and a job at home has generally not ended residence. There is a second consequence to plan for as well: a Mexican property held through the usual bank trust arrangement may be reportable at home from the date of acquisition.
My employer is keeping me on the same payroll — what changes?
More than the address in the payroll system. Where the work is physically performed usually drives which country may tax the employment income, and a treaty may or may not protect the position depending on how long you are there and who ultimately bears the cost of your remuneration. Home withholding frequently continues out of habit and then has to be corrected through a return. Your presence may also raise questions for the employer about a taxable presence in Mexico. We review the contract and the actual working pattern together.
What is double tax relief and how is it given?
Three mechanisms, and which one you get depends on your residence country's law and the treaty. Exemption leaves the foreign income out of the residence-country base. Credit taxes it and then subtracts the foreign tax, capped at the residence-country tax on that income. Deduction merely reduces taxable income by the foreign tax, and is usually the weakest. Canada and the United States lead with credit; several treaties give exemption for specific income types. See claiming the credit.
Can I avoid capital gains tax on a foreign property?
Not by virtue of it being foreign — there is no exemption for that, and the "keep it offshore" advice you may have read is how people acquire penalties rather than savings. What genuinely reduces the gain is ordinary and legitimate: principal residence relief where the property qualifies and the designation is made correctly, a properly built cost base including acquisition costs and capital improvements, the timing of the disposition, the treaty rules for real property, and credit for the foreign tax paid. See principal residence and foreign property.
