If you own a home in a high-end neighborhood and live in a fairly new house built with top notch materials you’re likely to be among the scores of Chapala area residents getting socked with a substantial hike in this year’s predial (property tax) bill.
The reason is not due to a steep, across-the-board increase in the property tax rate per se, but rather to adjustments in the formula for calculating the fiscal values of land and construction, explains Jesús López Aguirre, director of the municipality’s Catastro land registry office.
The new Tabla de Valores (value scale) approved by the state congress last November allowed the municipality to raise official property appraisals by as much as 37 percent, ranking as the highest rate of increase anywhere in the state. And that translates into jacked up tax bills for many homeowners.
Catastro now assesses each property on the basis of various criteria, starting with the established land values according to location, fully mapped out in the Tabla de Valores. The set value per square meter (m2) is multiplied by the measurements of the lot to arrive at the value of the land.
López indicates that current land values for fiscal (taxable) purposes can range from 400 to 2,000 pesos per square meter, depending upon the town, neighborhood, street and infrastructure where the property is situated. Market values generally run higher still.
Construction values are set by first classifying the age of the construction: modern (0-5 years old); semi-modern (6-10 years); or old (more than 10 years). Next, each structure is categorized according to by the type and quality of building material: luxury, superior, medium, economical or austere. Condition of the building (good, average or poor) is then factored in to come up with the per square meter assessment.
These classifications are based on data drawn from professional appraisals included in the Notary records registered when property titles change hands, Catastro files may include manifestations of construction documents, satellite imagery and physical inspections carried out by city hall personnel.
Land and construction are added together and multiplied by the standing 2015 tax rate of .00025, (up from .00020 applied last year) to determine the total base predial fee per year. Homeowners who pony up the full amount during the first two months of the year are entitled to a 15 percent discount. A 50 percent discount offered to seniors and the disabled is available exclusively only to native and naturalized Mexican citizens, applied to primary residences valued at no more than 420,000 pesos.
Taxpayers should note that the formula for billing undeveloped land is different.
López considers that the new method adheres to the community’s real estate and economic dynamics and is scaled to be more socially equitable than before. He also envisions long-term benefits of the system in terms of collecting valuable data that can be shared between city hall offices to facilitate urban planning, improve public services and streamline citizens paperwork requirements.
In case you’re wondering, all Castastro revenue goes straight into the coffers of the municipal treasury.
Several months ago the city council rejected the Jalisco government’s proposal to take charge of predial collection through state tax offices. The downside of the decision is that Chapala won’t qualify to obtain resources from Fondo de Fomento Municipal (municipal development fund). On the other hand, the municipal government will maintain control of the revenue it generates, without being subject to arbitrary timing and the will of the state to recover the principal source of its own income.
In fact only 59 of the state’s 125 municipalities have bought into the deal. “We’re one of the fortunate ones that generates significant predial income,” says López, “but it’s a good option for those don´t have such a strong tax base and are burdened with employing staff for minimal return.”
On a side note, Chapala stands out as one of just 12 Jalisco municipalities that have activated on-line predial payment systems. The Catastro chief reports that glitches detected early in the month have been ironed out so credit card payments can go through via Internet and official bills can be printed out and paid at Santander bank. However, the majority of Chapala taxpayers, like those in Guadalajara and most of the state’s citizens, still prefer paying in person rather than dealing with newfangled procedures. Less than five percent of predial accounts are covered electronically, almost entirely by those residing out-of-state.