While quite unfortunately, governments in some parts of the world are seeing downgrades in credit ratings due to poor financial management, there is some good news for investors; Playa del Carmen’s municipal government has recently received an upgrade in credit rating, and is likely to see further upgrades in the near future.
While the announcement is related directly to government bonds for the Municipality of Solidaridad (the municipal name of Playa del Carmen), it has some good implications for Playa del Carmen real estate investors.
The news came in late August, 2010, announced by Mauricio Gongora, municipal treasurer, who reported that Standard & Poor’s had raised the credit rating of the municipality from “mxBBB” to “mxA”.
According to the final outcome of the performance assessment of the municipal administration in 2008, the credit rating agency concluded that Solidarity has a high financial flexibility on the side of an adequate income and budget performance, with hopes of further improvement in 2010.
Gongora said that this result was chiefly due to the mayor Roman Quian, who implemented austerity measures through administrative modernization program that allowed the treasury to improve expenditure control and increase efficiency in collection.
In the document published on rating website, which is given in relation to financial management, it was stated that “Solidaridad has maintained adequate administrative practices in recent years. The current administration continues with the modernization processes that have benefited the collection of taxes, registration and control of expenditure. Also, the administration has good tax collection practices through land regularization programs, updates to the system of cadastral information and payment facilities to the taxpayers.”
Gongora also noted that the efforts made from the treasury were highly rated by Standard & Poor’s, with the report stating that “the management of cash has a strict budget control that does not allow extensions of the budget but only adjustments in the items of the same area,” which guarantees financial health by not permitting expenditures to increase over the fiscal deficit while avoiding income in the municipality.
For Mexico real estate buyers interested in Playa del Carmen, this information has a few implications; one is, it will be easy to pay your property taxes! (Electronic payment modules, early payment discounts and plans for on-line payment are part of this plan.)Â The more important part is that your tax payment will be in the hands of a government with financially sound practices, that will continue to improve its credit rating an draw investment.Â These funds will also be put to good use, improving the quality of infrastructure in the area â€“ a fact which can be seen in large highway bridge and road improvement projects, for example.
Overall, good and improving financial management on the part of the municipal government will continue to make Playa del Carmen a great place to live and invest in 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. In the summer of 2009, he received the first federally applied Mexico Real Estate Degree and Mexico Professional Real Estate License S.E.P. #5978657. He is the current president of TOPmexicorealestate, you can contact him at (512) 879-6546 or through the company’s web site www.TOPmexicorealestate.com NETWORK
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