I Guess We Are Staying….
The Mexican government has decided to change all us expats’ resident visas around, with a range of implications for the foreigners who are living here. As was the case before, now you’re either herded into the “tourist” group, or a permanent residents’ group. As a “temporary” visitor, e.g. tourist, they give you a piece of paper called an FMM which gives you 180 days to hang out in Mexico, and you can bring your U.S. or Canadian plated vehicle in with you. You can legally then stay in the country for six months, really touring around, living in your rented casita to finish writing your novel or whatever. But you have to leave Mexico when the six months (or ten days on the beach) are up. Alternatively, you’re a permanent resident, which opens a different can of worms. Before, there were different classes of resident visas all the way up to “inmigrado” which meant you figured you were here to stay and your next step past that, if you were interested, was naturalization, going for Mexican citizenship. That visa came with the ability to get working papers – essential for all those condo salespeople at the beaches and others living and legitimately working here.
But now they’re changing all of it, and people are none too happy about it because they are tightening up the rules that directly affect us – about driving foreign-plated cars, how much money you have to have to live here permanently as a retiree, and a couple of other important things. The financial requirements for residency used to be quite minimal, and it was one of the things that made it attractive for Americans who had only the most basic Social Security income to move down here. But under the new rules, everyone needs to demonstrate a stable income of about $2,100 a month. The lawyers are saying “don’t worry, they will probably grandfather in people who have been here for a while” but nonetheless, already some people are panicking that they’ll be thrown out anyway, and proactively planning to head back NOB (North of the Border).
The old Mexico hands are also saying “wait, wait, they will revise and clarify these laws, they’ll see that they are running off perfectly good folks who employ maids, gardeners, and pay VAT and other taxes – they will backtrack on this”…. but there is a lot of discussion about just going back up north instead of hunkering down and seeing what happens. Our feeling is that most of this talk comes from people who have never been too happy here; it gives people a good excuse to bail. But some lawyers believe that there will probably be some sort of credit or point system put into place, so that even absent the required income stream, if you own your own home, or have other investments, you’ll get your permanent visa income notwithstanding. However, as of now the new rules are the new rules and everyone is having to deal with them. There are lots of theories as to why this is being done…revenge for the U.S.’ horrible immigration policy? Trying to get a “better class” of person here with tighter regulations? (try to emigrate to Canada, New Zealand or Australia and see what THEY require!) – no one really knows, but all of us who are living here, for all intents permanently, are now being forced to deal with the new requirements.
The car situation is complicated too. Because cars are cheaper up north, many people have been down here for years with older foreign-plated vehicles with long-expired registrations from wherever they came from originally. It makes perfect sense to me that the Mexican government wants to have everyone who is living here as a permanent resident be driving – in our case – a Jalisco-plated car so they can track it if they need to. Amazingly enough, all car registrations in Mexico are on computers now. But as a practical matter they are now forcing those with U.S. plates to scurry back to the border to sell their vehicles and come back down and buy something here in Mexico that will have Mexican plates.
There seems to be a process by which you can “nationalize” a car with foreign plates IF and only IF it was made in a NAFTA country. Meaning they look at your VIN number and see where the car was manufactured. If it was made in Mexico, Canada or the U.S., you may be able to nationalize it – a big hassle, and the nationalization route quickly became rife with fakery and corruption so it was an expensive risk to take. People paid a lot of money to “consultants” who turned out to be scam artists when the hapless gringos discovered that their fancy new Mexican registrations and plates were entirely fake. We have friends who have a much-loved Subaru they’ve been driving around here for six years, but alas, it was built in Japan, so no nationalization is posible for them. They have to return the car to the border, have its importation tags cancelled and removed, and get rid of it. They are buying a new car down here, the legitimate way, from a dealer in Guadalajara.
All of it is a big pain in the neck. We’re fine in the car department; after the carjacking in 2007, I decided I didn’t want to drive around with foreign plates any more and our present car has had Jalisco plates since the day we bought it. Much easier and we are grateful now that we see so many people going crazy with all these new rules and regulations! So the car thing is a non-issue for us, but it turned out that our old visas (called an FM-3) were destined to present us with some problems. Aside from the fact that they are being done away with, they were “sort of” permanent resident and “sort of” not. One of the bad things, we discovered, about our old FM3 visas was that if and when we sell our present house, we would have owed a huge amount in capital gains taxes to the Mexican government. The way around that is to become permanent residents under the new rules. Then you’re allowed to buy and sell a house once every five years without owing capital gains taxes on the sale. Some of the other visa classifications also had limits on how long you could be out of the country, and other weird rules we could just as well do without.
So Arnold and I, without even having any sort of conversation about it, called our attorney and said “we need to apply for those permanente visas, because our house is on the market and when it sells we would be liable for a lot of capital gains taxes!” We actually had the notario figure it out and it was scary how much we would have owed, in spite of the fact that we have actually not made a dime on this place. Actually, we have put a lot of money into remodeling it and updating the electrical, plumbing, etc. But with the collapse of the U.S. real estate market we had a collapse here too, so no one is making any money on the sale of their houses. A huge tax bill on top of that would not be what we had in mind. We were told that to apply for the “change of condition” in our visas from FM3 to permanent, we had to submit six months worth of bank statements, proof of our income and investments, and tons of other stuff and it is taking about three months now to get these visas. It used to be that the little immigration office right here in Chapala could handle this, but now, once again, they’ve tightened things up and all the decisions about getting or not getting a visa are handled out of Mexico City. So you send in your request and you basically sit there and wait until you are summoned – in our case, to Guadalajara – to be fingerprinted and a couple of weeks after that your permanent resident card is ready for you to pick up – or so we are told.
Being a permanent resident is also, like the old inmigrado classification, one step below being a naturalized Mexican citizen. And unlike the old visas, which had to be renewed every year, these are permanent and at least right now, for the moment, they are saying once you have it, that’s it. No need to renew it annually or anything like that. Of course down the line they may realize they are giving up a nice income stream in fees or whatever and they may change the rules, but right now we are looking forward to getting the new permanent visas and being free to come and go as we please.
So we made an appointment with our attorney, went in to her office with the requisite piles of bank statements and such, paid to have an official translator translate them all into Spanish, then she submitted them a few weeks ago, and now we just wait. We’re figuring we might get them in August sometime, but ¿quien sabe? Walking back to the car we just looked at each other and said “Hmmm, I guess we’re staying here, yes?” “Yeah, Arnold said, well, we are buying our second house here, and we now have four cats and a dog (no New York co-op for us, even if we had the dough…); and we can’t figure out where we would move to that we could afford even if we DID want to leave here, so, well, I guess we are staying…”
And we went home and I fixed dinner.