Selling DVC from Mexico: A Complete Guide for Mexican Sellers

Mexican citizens and residents who own DVC timeshares at Walt Disney World or other US resorts are foreign persons under FIRPTA. When you sell, US withholding rules apply just as they do for UK, Canadian, or Australian sellers. Here is what Mexican DVC owners specifically need to know about both the US and Mexican tax requirements.

FIRPTA Applies: 15% at Closing

FIRPTA applies to all non-US persons selling US real property interests, regardless of nationality. Mexican residents selling DVC have 15% of the gross sale price withheld at closing and remitted to the IRS. This is identical to the withholding faced by sellers from any other country. The closing agent files Form 8288 and mails you Form 8288-A as your withholding receipt.

The US-Mexico Tax Treaty

The United States and Mexico have a tax treaty (the US-Mexico Income Tax Convention). Article 13 of the treaty addresses capital gains on real property. Like most US tax treaties, it preserves the US right to tax gains on US real property interests, including DVC timeshares. The treaty does not exempt Mexican sellers from FIRPTA or from US capital gains tax on DVC gains.

What the treaty does provide: a credit mechanism to prevent double taxation. US tax paid on the DVC gain can be credited against Mexican tax on the same gain, so you effectively pay the higher of the two rates, not both.

US Tax Return: Form 1040-NR

After your DVC sale closes, file Form 1040-NR (the non-resident alien return) with the IRS after December 31. Report the DVC sale on Schedule D and Form 8949. Claim the FIRPTA withholding (shown on Form 8288-A) as a credit. Your refund = withholding minus actual US tax on the gain.

You need a US taxpayer identification number (ITIN) to file. If you do not already have one, apply using Form W-7. See our ITIN application guide. Certified Acceptance Agents are available in Mexico City and other major cities (see the IRS directory at irs.gov.

Mexican Tax Reporting

Mexican residents are taxed on worldwide income, which includes gains from selling foreign assets. Your DVC sale gain must be reported on your Mexican Declaración Anual (annual tax return) filed with the Servicio de Administración Tributaria (SAT).

Key considerations for Mexican reporting:

• Convert to Mexican pesos: Use the exchange rate published by the Banco de México on the transaction date to convert your USD proceeds and cost basis to MXN
• Foreign tax credit: US tax paid on the gain is creditable against your Mexican tax on the same gain under the treaty) prevents paying both countries in full
• Mexican fiscal year: Mexico uses a calendar year (January to December), same as the US, so the timing aligns well

ITIN Sources in Mexico

The IRS maintains a directory of Certified Acceptance Agents (CAAs) in Mexico at irs.gov/itin. CAAs are available in Mexico City, Guadalajara, Monterrey, and other cities. A CAA verifies your identity documents in person so your Mexican passport does not need to be mailed internationally.

Frequently Asked Questions

Do Mexican DVC owners pay FIRPTA when selling?
Yes. FIRPTA applies to all non-US persons selling US real property, including Mexican citizens and residents. 15% of the gross DVC sale price is withheld at closing and remitted to the IRS.

Does the US-Mexico tax treaty eliminate FIRPTA withholding?
No. Article 13 of the US-Mexico treaty preserves the US right to tax gains on US real property interests. The treaty prevents double taxation through a credit mechanism, but does not eliminate the 15% FIRPTA withholding or the US capital gains tax.

Do I need to report my DVC sale to the SAT in Mexico?
Yes. Mexican residents are taxed on worldwide income. Your DVC gain must be reported on your Mexican annual tax return. You can claim a foreign tax credit for US tax paid to prevent double taxation on the same gain.

Where can I find an ITIN Certified Acceptance Agent in Mexico?
The IRS directory at irs.gov/itin lists CAAs by country and city. Search for Mexico to find agents in major cities including Mexico City, Guadalajara, and Monterrey.