Why is my property tax still under the previous owner’s name?

By: Karinna Galla // Real Estate Adverso (YUC, Q.ROO, CAMP)

If you recently purchased a property and, as a responsible homeowner, dutifully paid your property tax, you may have noticed that it still appears under the name of the previous owner, whether it’s an individual or even the construction company in the case of new properties. But don’t worry, the news isn’t as bad as it seems.

It turns out that, once you’ve signed the “deed” for your new house, apartment, land, or whatever it may be, at the notary’s office; the notary must take the complete file to the Public Registry of Property and Commerce (RPP) of the state where the property you just acquired is located to register the transaction. In other words, to have the purchase of that property officially recorded by the government. Usually, this process can take around three months, although in some states, these times may vary or even double.

Once your “deed” has been properly registered in the aforementioned Public Registry, the notary will then notify you to pick up your testimonio (yes, that’s what the “deed” is called) at their offices. Let’s be honest, it’s most likely that the notary or the lawyer who handled your process won’t call you, so you’ll have to be the one to follow up after the previously stipulated time has passed.

It is at this point where you should verify that you receive all the documents I mentioned in another blog post, including the Registration Certificate. Once this is completed, the property is officially under your name before the government.

So, why is my property tax still under the previous owner’s name?

Let’s see, property tax is a levy applied to real estate, whether it’s land or buildings. Real estate owners are obligated to pay this tax annually to the local or municipal government. The amount of the tax is generally determined based on the cadastral value of the property, which can be assessed by the local tax administration. Its main objective is to collect funds to finance local public services and municipal infrastructure, such as roads, public lighting, garbage collection, among others, depending on the municipality where your property is located.

Its collection and administration are in the hands of the municipalities. That is, each city or municipal government must manage and collect property tax from properties within its territorial jurisdiction, that is, its cadastral registry; overseen by, as you can probably define it, the Municipal Cadastre Department. Relax, we’re getting closer to the answer. Keep reading!

So far, we’ve talked about two government agencies involved, in one way or another, in the name change of your property: the Public Registry of Property at the state level and the Cadastre Department at the municipal level. And yes, believe it or not, they are not interconnected. So, even if the property is already in your name in the Public Registry and everything is legally set, the update in the Cadastre must be done separately, as it doesn’t happen automatically.

In some instances, the notary (or their office staff) does it for you. In some instances, I said!!! More likely, you will need to do it personally once you have received your testimonio duly registered in the Public Registry of Property. The requirements, resolution times, and processes will vary greatly depending on the municipality where your property is located, but, in general, these are straightforward procedures with very low or no cost.

The most common (and likely) requirements are as follows:

– Testimonio (or public deed)

– Property tax payment receipt

– Proof of payment of ISABI (Tax on the Acquisition of Real Estate)

– Registration Ballot

With these documents, go to the Cadastre office in your locality and request the “Change of Owner,” et voilà, your next property tax will already be in your name.

As always, I hope this information has been helpful, and please share if you managed to complete the procedure without complications.

Until next time!