MEXICO Law and Practice Contributed by: Roberto Cannizzo, Carlo Cannizzo, Stefano Amato and Mauricio Moreno-Rey, Cannizzo
• construction of public infrastructure and services. The Procedure The expropriation procedure begins with a dec - laration of public utility by the authority published in the Federal Official Gazette and, where appro - priate, in a local newspaper, and the owners of the property and rights to be affected will be personally notified to respect their right to due process. If applicable, after the process of filing evidence and allegations, the judge will issue the corresponding resolution and, subsequently, the Federal Executive will decree the relevant expropriation that will be published again in the Federal Official Gazette. The relevant decree, together with the appraisal in which the amount of the compensation will be fixed, will be noti - fied to the interested parties, who may then go to court. The price fixed as compensation must be equal to the commercial value of the property, and in no circumstances may it be less than the fiscal value shown in the cadastral offices. Once decreed, the authority is authorised to occupy the property. The applicable law (ie, the Expropriation Law) provides for the existence of temporary occu - pation, total or partial, and the simple limitation of ownership rights, which may be decreed for reasons of public utility. National Law on Ownership Extinction The National Law on Ownership Extinction gov - erns the process of extinguishing property own - ership in favour of the state, either through the federal government or the states, as applicable. According to the law, property can be subject to ownership extinction if it is the product, instru - ment or material object of certain specified crimes. These crimes include:
• offences under the Federal Law against Organised Crime; • kidnapping; • crimes involving hydrocarbons, oil and petro - chemicals; • crimes against health; • human trafficking; • corruption; • concealment; • crimes committed by public servants; • offences outlined in the Federal Criminal Code relating to transactions involving resources of illicit origin. 2.10 Taxes Applicable to a Transaction If real estate is acquired through a direct pur - chase of assets, different taxes and rights must be paid, namely: • vehicle theft; • extortion; and • Property Acquisition Tax, which is paid by the purchaser and varies depending on the state where the property is located – it is usually between 2% and 6%; • VAT on the value of the construction (unless it is a residence or lot), paid by the purchaser at a 16% rate; and • income tax, paid by the seller and calculated on the net gains from the sale of the property. Certain deductions are available (ie, acquisition cost, construction, improvements and exten - sions, notary expenses and commissions). Finally, there are registration fees that the pur - chaser pays to the RPP and for obtaining cer - tificates (no liens certificates, no tax debts cer - tificate, etc).
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