Market Comparison Tulum Mexico and Ambergris Caye Belize
Tulum, Mexico vs. Ambergris Caye, Belize
Tulum, Mexico, and Ambergris Caye, Belize, are both stunning tropical destinations. Though they have similar landscapes, they offer different tourism and investment opportunities. Tulum has become one of the hottest tourism destinations in the world, as evidenced by the development of the Tulum International Airport (opened in December 2023) and the Maya Train.
Ambergris Caye is Belize’s top tourism destination. The Caribbean island is also one of the top locations in the world for diving, snorkeling, fishing, and other water activities. It has seen substantial growth and offers an array of advantages and incentives for offshore investment compared to Tulum.
Ambergris Caye vs Tulum
Belize and the island of Ambergris Caye offer a compelling combination of factors, including solid tourism growth, affordability, a favorable tax environment, and unique natural attractions. Ambergris Caye presents a promising opportunity for real estate investors seeking attractive returns and a slice of paradise.
Key Things to Consider
- Property Ownership
- Taxation (Capital Gains & Rental Income)
- Tourism
- Gross Rental Income (ADR, Occupancy, Revenue)
- Annual and Monthly Trends (Inventory, Income Year-Over-Year)
Lower Competition: While Tulum has seen rapid development, Ambergris Caye still offers opportunities with less competition among investors.
Tax Benefits: Belize offers attractive tax incentives for property owners, including no capital gains tax and low property tax rates, which can enhance your investment returns.
Tourism Market Overview Ambergris Caye & Tulum
Ambergris Caye
International Airport Arrivals Over 8 Months = 431,353 overnight arrivals
2024 Year Over Year Tourism Growth = +30% from 2023
Tulum
International Airport Arrivals Over 8 Months = 670,000 overnight arrivals
2024 Year Over Year Tourism Growth = -1% from 2023
Tourism & Experience
Investment and Vacation Rentals
Vacation Rental Occupancy
Ambergris Caye Occupancy
Ambergris Caye Vacation Rental Occupancy
- 2024 Average Occupancy of 59% for vacation rentals on Ambergris Caye.
- Ambergris Caye had a +15% increase in average occupancy in 2024 compared to 2023.
- The peak 2024 occupancy in Ambergris Caye for a month was 82% occupancy in February.
- The lowest 2024 occupancy in Ambergris Caye for a month was 37% occupancy in September.
Tulum Occupancy
Tulum Vacation Rental Occupancy
- 2024 Average Occupancy of 46%.
- -1% decrease in average occupancy in 2024 compared to 2023.
- The peak 2024 occupancy in Tulum for a month was 56% in January.
- The lowest 2024 occupancy in Tulum for a month was 34% in September.
Nightly Rental Rates Ambergris Caye vs Tulum
Ambergris Caye ADR (Nightly Rates)
Ambergris Caye Nightly Rental Rates and ADR
- 2024 Average ADR or Nightly Rental Rate of $245 USD per night for vacation rentals on Ambergris Caye.
- Ambergris Caye had a +2% increase in average ADR in 2024 compared to 2023.
- The highest 2024 average monthly ADR (Nightly Rate) in Ambergris Caye was $264 USD/night.
- The lowest 2024 average monthly ADR (Nightly Rate) in Ambergris Caye was $232 USD/night.
Tulum ADR (Nightly Rates)
Tulum Nightly Rental Rates and ADR
- 2024 Average ADR or Nightly Rental Rate of $199 USD per night for vacation rentals in Tulum.
- Tulum had a -1% decrease in average ADR in 2024 compared to 2023.
- The highest 2024 average monthly ADR (Nightly Rate) in Tulum was $217 USD/night.
- The lowest 2024 average monthly ADR (Nightly Rate) in Tulum was $232 USD/night.
Rental Income Ambergris Caye vs. Tulum
Monthly Rental Income
Annual Rental Income Ambergris Caye vs Tulum
Ambergris Caye Rental Revenue
Ambergris Caye Rental Revenue
- 2024 Average Rental Revenue for vacation rentals in Ambergris Caye is $43,200 USD annually.
- The average vacation rental property revenue in Ambergris Caye increased by +17% in 2024 compared to 2023.
- March 2024 was the peak month for rental revenue on Ambergris Caye, with an average monthly revenue per unit of $4,640 USD.
Tulum Rental Revenue
Tulum Rental RevenueThe
- 2024 Average Rental Revenue for vacation rentals in Tulum is $28,500 USD annually
- The average vacation rental property revenue in Tulum decreased by -1% in 2024 compared to 2023
- January 2024 was the peak month for rental revenue in Tulum, with an average monthly revenue per unit of $3,156 USD.
Property Ownership in Belize vs. Mexico
- Belize offers a more straightforward and unrestricted path to property ownership for foreigners.
- In Mexico, the Fideicomiso system adds complexity and cost to owning property in desirable areas.
Belize
- Fee Simple Title: Foreigners can purchase and own a property outright with a fee simple title, the strongest form of ownership.
- No Restrictions: There are no restrictions on foreign ownership, even in coastal or border areas.
- Straightforward Process: The buying process is relatively simple, with minimal red tape for foreigners.
Mexico
- Restricted Zone: Foreigners cannot directly own property. The “Restricted Zone ” includes land within 100 km of borders and 50 km of the coastline.
- Fideicomiso (Bank Trust): To own property, foreigners must use a Fideicomiso, a bank trust that holds the title for 50 years, renewable.
- Mexican Corporation: Alternatively, foreigners can establish a Mexican corporation to own property in the Restricted Zone, but this can be more complex and costly.
Currency
Belize’s currency is pegged to the USD. The US dollar ($) is also used for all international purchases and tourism. The pegged currency has given Belize the tools and resources to grow as a new country, with British Common Law, full land ownership, and foreign property rights. Most offshore real estate purchases in the Caribbean are in USD. This also incentivizes foreign investment. The private sector is strong in Belize, and as it continues to grow, so will Belize’s economy and purchasing power.
In Mexico, all real estate transactions are recorded in Mexican pesos, even if the property was purchased or sold in another currency. This leaves real estate values susceptible to currency fluctuations and volatility.
Mexico
Mexico Real Estate = MEX Peso
Mexico Currency = MEX Peso (fluctuation)
Belize
Belize Real Estate = USD
Belize Currency = BZD (2:1 with USD)
The Belize dollar is pegged to the US dollar at a 2:1 ratio, providing currency stability and simplifying financial transactions for US dollar users. Real Estate purchases and transactions are also made in USD.
In Mexico, real estate transactions are recorded in Mexican pesos, even if the property was purchased or sold in another currency. This leaves real estate values susceptible to currency fluctuations and volatility.
Taxes
Belize offers attractive tax incentives for property owners, including no capital gains tax and low property tax rates, which can enhance your investment returns. When comparing Belize and Mexico, Belize generally has a more favorable corporate tax environment due to its lack of a general corporate income tax.
Belize Taxes
- No Capital Gains Tax
- No Estate Tax (Inheritance Tax)
- Low to No Offshore Income or Corporate Tax
- Very low property tax
Belize does not have a general corporate income tax. However, operating domestic businesses in Belize have 1.75% on international corporate income. 3% on domestic corporate income.
Belize has a 5% Transfer Tax. This would be the acquisition taxation of property.
Mexico Taxes
Capital Gains Tax in Mexico Real Estate
- Non-Mexican Capital Gains Tax on Real Estate
- Rate: 25% of the gross sales price (no deductions allowed)
- The net Gain Basis (Only available to Mexican Citizens and Residents) Rate ranges from 1.92% to 35% of the net gain (calculated as sales price minus allowable deductions). The seller must have legal status in Mexico.
Mexican residents may be eligible for certain exemptions or reduced rates, so residency status is important. Foreigners (Americans or Canadians) are subject to full Mexican taxation on capital gains with no exemptions or special considerations. There is an additional 25% on capital gains in real estate.
Rental Income Tax in Mexico
Rental Income Tax is 25% for non-residents. The percentage of gross income paid to the Mexican government. 25% for non-residents.
The tax on rental income from vacation properties owned by foreigners in Mexico is the same as for any other rental income earned by non-residents. Foreigners pay a 25% tax on the gross rental income.
There are no deductions for (non-resident) foreigners in Mexico on real estate income. Foreigners cannot deduct any expenses from their rental income before calculating the tax. Unlike Mexican residents, foreigners cannot deduct expenses such as property taxes, maintenance, or insurance from their rental income before calculating the tax.
- Additional taxes: If the vacation property is furnished, an additional 16% Value Added Tax (VAT) is applied to the rental income.
- High rental income taxation: The tax system for foreigners’ rental income is straightforward, but the 25% flat rate can be significant.
- VAT for furnished rentals: Remember the additional 16% VAT if the property is furnished
Example
A foreigner rents their furnished vacation property in Mexico for $2,000 USD per week.
25% income tax on gross rent: $2,000 * 25% = $500
16% VAT on gross rent: $2,000 * 16% = $320
Total Taxation = 41% of gross vacation rental income
Total tax due: $500 + $320 = $820
Additional Considerations
Businesses should consider other taxes, such as VAT, property taxes, and payroll taxes, when evaluating the overall tax burden in each country.
Additional Taxes in Mexico
Mexico Corporate Tax: 30% corporate income tax rate: Mexico imposes a 30% corporate income tax on worldwide income, and non-residents are taxed on Mexican-sourced income.
Mexico Acquisition Tax: When buying a property in Mexico, you must pay an acquisition tax, typically 5% of the assessed value. Some states have rates as high as 6.5%.
Investing in Ambergris Caye over Tulum
Investing in Ambergris Caye over Tulum presents a compelling case, with several factors tilting the scales in its favor:
Higher ROI Potential
- Stronger Tourism Growth: Ambergris Caye is Belize’s top tourist destination, experiencing consistent growth. While Tulum is also popular, its growth might plateau due to infrastructure limitations and increasing costs.
- More Affordable Entry Point: Real estate prices in Ambergris Caye are generally lower than in Tulum, allowing for greater investment potential and higher rental yields.
- Favorable Tax Environment: Belize offers tax benefits that are enticing for real estate investors, including no capital gains tax, no estate tax, and low property taxes. These factors can significantly boost your return on investment.
Diversified Investment Options
- Range of Properties: Ambergris Caye offers a wider variety of investment properties, from beachfront condos and villas to inland lots and commercial spaces. This diversity caters to different investment strategies and budgets.
- Emerging Developments: New developments on the island, including luxury resorts and residential communities, provide opportunities to invest in pre-construction projects with potentially higher returns.
Established Infrastructure and Amenities
- Accessibility: While both destinations require connections, reaching Ambergris Caye is straightforward, with direct flights to Belize City and convenient ferry services.
- Developed Infrastructure: Ambergris Caye boasts a well-established infrastructure with reliable utilities, healthcare facilities, and a range of amenities catering to residents and tourists.
Unique Natural Attractions
- Belize Barrier Reef: Ambergris Caye’s proximity to the world’s second-largest barrier reef is a major draw for tourists, ensuring a steady stream of visitors and rental income.
- Diverse Marine Life: The island offers unparalleled opportunities for diving, snorkeling, and fishing, attracting water sports enthusiasts and nature lovers.
Stable Political and Economic Climate
- Stable Democracy: Belize is a politically stable country with a democratic government and a growing economy, providing a secure environment for foreign investments.
- English-Speaking Country: As an English-speaking country, Belize offers ease of communication and business transactions for international investors.
Tulum Mexico
Ambergris Caye Belize
Overall, investing in Ambergris Caye offers a compelling combination of factors, including solid tourism growth, affordability, a favorable tax environment, and unique natural attractions. Belize offers many advantages for people looking to invest in the Caribbean. Ambergris Caye presents a promising opportunity for real estate investors seeking attractive returns and a slice of paradise.
To learn more about Belize and investing in Belize, contact us!
Belize vs Tulum Video
There are quite a few advantages to investing in Belize that many investors are unaware of. Belize offers diverse real estate opportunities, which we are excited to share with you!
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