Property appraising methods in the Yucatan Peninsula.

In Mexico, where public record platforms like Zillow, Trulia, and MLS simply do not exist, making it more difficult in assessing the true market value of any given property.

If you’ve owned a house in the US, Canada, or Europe, you’re required to pay tax to the government, usually based on the rateable value of the property. 

In Mexico, the rateable value is known as the Catastro or catastral value, and is assessed by an approved and authorized appraiser; no onsite inspection is required. The value varies depending on location, size, etc., and can be a fraction of the actual commercial value of the property.

This catastro valuation is used by the Notario or public notary attorney offices to assess the value of the annual equivalent of the “Property Tax” known in Mexico as the “Predial” and is very low (and could border on insignificant) when compared to say, property taxes (even at the lowest rates) in the US, Canada, or Europe. It’s a big reason why the cost of property ownership in Mexico is so extremely low. Although the catastro valuation is an essential number for working out tax liabilities, in practice it serves no use in assessing the actual to-date commercial value of a property.

In Mexico, tax values are not determined or measured on the number of bedrooms, bathrooms, etc.; as a measure of value people instead look at the price per square meter of land and then per square meter of construction on that land.

For example, you could have a 300-square-meter plot with 500 square meters of construction. The garden is likely to be small, or even, just a patio, in this scenario. “Construction” is based on outer measurements, wall-to-wall, and includes garages, covered patios, and out-houses or other buildings, not just the main living areas.

YCP’s commercial appraisal methods and processes:

1. Land Value (actual comparables through mapping).

2. Construction Value (current building cost, less any conditional devaluation losses).

3. Comparables through local realtor site listings.

4. Interview neighbors for direct contact info, history, and any problems (past or present).

5. Comparables from Point2Agent, Inmuebles24, viva anuncios, 

Easy Broker, and other similar Mexican real estate listing platforms.

6. Review of the property public registry data from the Registro Público de la Propiedad Office.

7. Business Operating Value (if one exists) with any history, market potential, etc.

8. Build-up or Add-On construction potential/value/cost.

9. Land use Switch, i.e. home to commercial, lot to structure, etc.

10. Business Brand (if one exists).  

We’ll start with a thorough and complete revision of the property, foundation to rooftop. We’ll then inspect all the paperwork i.e. title (titulo), trust (fideicomiso), catastral, buy/sell agreement, CFE, Con agua, and any construction licenses, permits, and permissions. We’ll confirm the property lines and legal boundaries, and in the case of a condominium, we’ll examine the regime rules, guidelines, responsibilities, and any enforcement mechanisms.  

With all the data in hand, we’ll create a fact-filled photo-driven appraisal report that’ll be relevant, useful, and strategic in identifying the correct property appraisal value.

Trust our years of experience to provide you with a factual evidence-based appraisal that will help you negotiate the best possible deal, anywhere in Mexico, every time, guaranteed.   

Complete Bilingual Services.

Here’s an example in Playa del Carmen for a client with a double lot 600m2 and 220m2 of construction on 4th between 55/60 that he bought 20 years ago and wants to know what’s it really worth. Seems the numbers from the many local realtors varied from fire-sale to pie-in-the-sky.

So, we drew the map than drove the streets and got the data to access proper and correct real-time land value.

Replacement Value: Another way of determining the commercial value of a property is to take the commercial value of the plot (land), and add to it the cost of construction, should you build it today (this is usually expressed in cost per square meter of construction) and depreciate this value according to the age of the house. You would then add on the value of any special features.

Similar Recent Sales: We’ll assemble a list of any similar properties in the same areas including those for sale online, those that have sold, and those that we’ve searched out from driving and documenting the targeted area.

Investment Value: This is deduced by determining how much the property would fetch monthly from a rental (based on similar rentals in the neighborhood/area) and multiplying by a factor. This factor is usually calculated by taking into account the cost of maintenance and applicable property taxes. If you wanted to see a return in 6 years (which is about average) then your formula would be monthly rental x 12 + annual maintenance including service fees & taxes multiplied by 6 years.

We’ll consider the house’s size, age, features, location, and all accumulated data to give an accurate, reliable, and trustworthy value of the property.

Tax Value Appraisal

In many areas of the world, the appraised Tax Value (Catastro) is the same as the Commercial Value (selling price). 

In Mexico, the Catastro Value is set by the county appraiser (without onsite property inspection). Throughout the Yucatan peninsula, the Catastro value of all properties is normally a fraction of the Commercial Value. While the Catastro value is used by the Notary (a specially licensed lawyer who performs property transfers) to determine closing costs and the annual tax payment (Predial), it is not effective for comparing Commercial Values.

The catastral appraisal is based upon tax tables published by the municipality where each city block is assigned a value per square meter for the land. Then there are tables to value the square meters of construction depending on the property’s age, style, and condition.

What influences the listing price for a property

Most sellers in Mexico list their property at the highest realistic potential price point based on several variables i.e. what they paid for the house, plus improvements over the years, real estate agent market values opinion, and current listings for similar properties in the area as advertised on property listing portals but without a Tulia or other platform the task is difficult. location, size, condition, amenities, recent sales of comparable properties, and market conditions to determine its market value.

Commercial Value Appraisal

YCP’s comparative market analysis valuation reports are based on a combination of local research of available land prices and comparable properties, all recent sales data through our network of brokers, notarios and contacts, and finally our professional opinion about the property, its construction, and the location.

We create data maps that reveal values of actual prices being asked and that have sold wherever possible.