Brokers Commission

 

Before hiring a broker or real estate company to assist you in the sale of your property, you must first agree on the percentage of commission, which is usually between 4 and 7% of the value of the property.

When the property has been sold and it is time to pay the commission, you should ask for his or her invoice. TO make it deductible, the broker agency must comply with the following:

a) the company or individual (broker) must be filed before the Tax Ministry as- Corredores o Agentes Inmobiliarios which in English means, Brokers or Real Estate Agents.

b) the INVOICE (CFDI) must have as invoicing concept the item 80131601.

c) the invoice must include your company’s federal taxpayer registration code and tax address.

d) the invoice file should be sent by the broker as .pdf file and .xml file.

If the above requirements are not met, you risk that the Tax Authorities do not accept such payment as a deductible expense increasing your income and therefore your taxes.