What Foreigners need to know about buying Property in Mexico
Being a property owner abroad is a lifetime dream for a lot of people. Non-Mexican residents can purchase property in Mexico and this article highlights everything you need to know to move forward. We suggest using a dependable realty agent as it is a safe and straightforward way to protect yourself and follow the correct process. All foreigners now have legal safety due to recent legislation for real estate transactions. You don’t have to be a resident in Mexico to invest in property there, and you don’t need to be a resident to invest in property in Mexico either.
The Foreign Investment Legislation of 1973 saw a constitutional modification which permitting foreigners to buy property outright. The exception to the rule is a “restricted zone’; consisting of all lands within 100km (sixty four miles) from border and 50km (32 miles) from the coast. For properties inside this zone, foreigners must use a fideicomiso. The fideicomiso is a bank trust wherein the bank (trustee) holds the trust deed for the purchaser (beneficiary). While the trustee is the legal owner of the real estate, the beneficiary retains all ownership rights and responsibilities and may sell, lease, mortgage, and pass the property on to heirs. The fideicomiso is authorized by the Mexican Government under the Ministry of Foreign Affairs.
The fideicomiso is required to verify the property’s legal status and confirm that no other claims or liens exist in regards to the property. The trust is established for a 50 years and is renewable for another 50 years after that.
There are also additional expenses to be considered at the closing of any property purchase. The buyer usually pays the transfer of acquisition tax. The acquisition and transfer taxes are approximately 2% of the gross sales price. Additional closing costs are between 3% to 5% of the selling price.
Using an escrow agent is standard practice. Property purchases in Mexico are often cash transactions. We recommend using a trusted escrow company to deal with the final transaction just as you would in your own country.
Also, please remember to pay your property taxes! If you decide to rent your new property there are some obvious tax implications.
Looking for a house, enterprise, or different property investment in Mexico should be an exciting and stress-free experience. The real estate brokers of Realty Kore have this in mind when helping you find your perfect property. They draw upon their very own experiences and considerations with investments in a foreign land and help to make the process of buying and selling in Mexico as worry free as possible.