Thomas Lloyd,  Broker By Thomas Lloyd
2010-10-04

While Mexico property taxes tend to be fairly low, it is nevertheless important for buyers to see that these funds will be going to good use. In the case of Playa del Carmen real estate, two facts help indicate this. One is the amount of new large-scale infrastructure projects, the other is the recent raising of its credit rating by Standard and Poors.

  

At the end of August 2010 the municipal treasurer, Mauricio Gongora, reported that the international credit evaluator, Standard & Poor's, had upgraded the long-term credit rating of the municipality of Solidaridad (the municipal name of Playa del Carmen), from BBB to A, and further upgrades are expected in the near future.

  

Standard and Poor's has two general rating categories - one is "investment grade" including four ratings (BBB, A, AA, AAA) and the other is "non-investment grade," also known as "junk bonds" (with large attention given to the recent downgrade of Greek government credit to this status, and the possibility of doing so with a handful of other countries, bringing the spotlight to the European debt crisis.)

  

While Playa del Carmen's municipality was already within investment grade, this upgrade indicates a increased responsibility in the management of government finances. The upgrade comes as a result of an assessment of municipal administrative performance in 2008, from which the credit rating agency concluded that Playa del Carmen has a high financial flexibility, an adequate income and budget performance.

  

The measure implemented by the municipality in recent years leading to this upgrade include the modernization financial administration, allowing for greater control and transparency in spending, as well as more efficient tax collection. From the perspective of S&P, this means that the municipality is improving its ability to guarantee loan paybacks. Since the credit ratings are long term, the ongoing application and improvement of these measures is expected to bring further credit upgrades in 2010.

  

Even for those who have no interest in investing in government bonds, the reasons for the upgrade indicate responsible use of public funds; it means that money isn't being "lost in the shuffle," funds are really being applied to the projects that they are designated for, and there are reliable records to demonstrate this. If you are buying Playa del Carmen property, and paying taxes on it, it is important to know that these funds will be applied responsibly to roads improvements, new parks, and in general improving quality of life in the area.

  

(As a side note, it also means is easier to pay your property taxes; convenient automatic payment machines, early payment discounts of up to 25% and a future online payment option are all a part of these measures!)

  

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Region:  Playa del Carmen real estate.

Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. A Mexican Certified Realtor he is the current president of TOPmexicorealestate, you can contact him at (512) 879-6546.

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