Permanent vs Temporary Residency

If you’re living in Mexico you’re probably aware of this but if you’re just thinking or planning, you might want to know what are some of the differences between Permanent Resident and Temporary Resident status.

They’re actually called Residente Permanente (RP) and Residente Temporal (RT) so I’ll refer to them like that.

If you get it at the outset, RP costs less overall and is easier. RT is a 4 year path to RP so it involves renewals (more paperwork and fees, more trips to immigration) and those multiple renewals add up to more than the RP fees.

Financial requirements differ greatly. For either one you need to show 12 months of qualifying investments OR 6 months of qualifying income, but the numbers are much higher for RP than for RT. Often people who can’t achieve RP status right away, just take the RT and wait the 4 years because you don’t have to re-qualify again at the end of that period. Note that if you are requesting approval based on income, it has to be foreign sourced income that will continue after you move to Mexico. Usually but not always, this will mean they want to see pension income.

This is a big one – as a RT you are NOT allowed to work or earn income in Mexico. None, nada, not in any way, including renting out your home when you’re not there. In order for a RT to work, they must get a special work permission attached to their visa, which usually involves a sponsoring employer. On the other hand, an RP is allowed to earn income so that can be a huge benefit. In either case, if you are earning income you will have to register with SAT for income taxes and let INM (immigration) know what you are doing, and if your status ever changes you have to inform INM within 90 days.

This one some people think is big, but it’s really not. An RP is NOT allowed to have a foreign plated vehicle in Mexico but as an RT you can continue driving your foreign car until the end of your 4 years when you convert to RP. In most areas of the country your vehicle must have a temporary import permit (TIP) and a RP cannot get a TIP. Theoretically you can do a permanent import of your vehicle but it is costly and complicated. Really, the best and easiest thing is to leave your car behind and buy one in Mexico, or at least get rid of it before you become RP. Problem solved. Unless you have some kind of special attachment to it, it’s just a car after all. And despite some of the rumors, Mexican cars are every bit as good. I am continually amazed though by how many people think this is a show stopper. Often they base their arguments on (perceived) safety differences but Mexican cars have airbags, bumpers, crush zones, etc., just like those to the north.

With either RT or RP you can open a Mexican bank account, obtain (cheap) Mexican health insurance, get your INAPAM (senior’s discount) card, and much more, but as RP you have even more benefits than RT, almost equivalent to being a citizen but without voting rights.

One final difference between the two is that an RP can qualify for exemption of capital gains tax on the sale of their home. This can be a huge tax saving but it’s similar to US/Canada in that there are some qualifications to meet. For specifics on this, you should speak with a Mexican notario, as they can and do interpret the rules differently from one to the next. Note, this is not an area of expertise for realtors or lawyers; only a notario can perform real estate transactions.

Of course this isn’t an exhaustive list, but I’ve hit the high points. If I’ve missed an important one, please let me know, and don’t forget to check the FAQ’s for more.

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