Here are our top 6 most frequently asked question about buying a home in Mexico:

Is home ownership considered a secure investment in Mexico?

Yes, property ownership in Mexico is a secure investment option.

Foreigners have been purchasing land and homes in the coastal areas of Mexico for more than forty years. This is thanks in part to the help of a Mexican Bank trust which names the owner as the beneficiary and the Mexican bank as the trustee. It is interesting to note that savvy Mexican investors will also use a bank trust. The reason is that it’s a great estate planning tool. If anything happens to an owner, the property transfers to the named beneficiaries.

Owners enjoy the same rights as property owners within the United States, Canada and other parts of the world. This includes the right to enjoy, lease, sell and make improvements to the property.

What does the law say about property ownership by non-Mexicans?
This question is addressed in Article 27 of the Mexican Constitution. Foreigners cannot hold residential real estate within fifty kilometers of the Mexico coastline. Also, non-Mexicans cannot own land within one hundred kilometers of Mexico’s international borders.

But, foreigners own with a bank trust. All foreigners are in this category, including all five star resorts. The Mexican bank trust is referred to as a Fideicomiso. Much like a trust in the United States, the Mexico bank holds all rights and privileges of the property including ownership. While exclusive use and enjoyment goes to the foreign owner.

With a bank trust, the beneficiary has the right to occupy or rent the property at his own discretion. The beneficiary may also start a transfer of title for the property to any legal beneficiary he chooses. Beneficiaries can also make changes to the property by following all local zoning laws and regulations.

The initial term of these trusts is fifty years. The trust can be renewed for the next fifty years…into infinity. Also, the property may be sold at any time to any person qualified for land ownership through citizenship or bank trust. The non-Mexican buyer can increase the sale amount due to property value appreciation.

The bank trust was designed to ensure the legality of all transactions. and protect the rights of non-Mexicans who secure land. Beachside Real Estate has closing specialists and a savvy sales team that will help you every step of the way as you establish a trust.

How do I establish a bank trust, or fideicomiso?
A bank trust, is established during the closing process on your new property. As part of your closing costs, you will pay the Mexico bank a fee which includes a property value percentage. This fees covers the costs of preliminary studies and the drafting of a trust agreement.

Costs associated with establishment of a trust can range from five hundred to fifteen hundred dollars. Then, approximately five hundred dollars per year. These fees are paid to the Mexico bank serving as the trustee.

These real estate bank trusts are held as off balance sheet assets by the Mexico banks acting as trustees. This trust system was implemented by the Mexican Government. It was enacted to provide foreigners legal ownership without amending the Constitution of 1917.

Our closing specialists will assist you you understand each and every step in the purchasing process.

What kind of closing costs can I expect in Mexico?
Closing costs are, on average, calculated as 3 – 6 % four of the property purchase price. All property purchases in Mexico are done with a Notary. Notaries in Mexico have a much higher level of status and responsibility than in other parts of the world. Closing cost fees cover the costs of all of the tasks that the notary undertakes to closing on your property. Costs include property registration, transfer tax, and a certificate of no liens for the property. You will also pay 750.00 USD to open an escrow account where deposits will be made for your purchase.

Public Notaries will record all transactions taking place in the Land Registry Office. Notaries are also responsible for collecting any property taxes due during closing.

Is Title Insurance available in Mexico?
Yes. Title insurance is available in Mexico. However, very few purchasers choose to buy title insurance. This is becasue of the high level of due diligence that goes into creating a new deed (escritura). A deed in Mexico is a big document that includes the full history of the property. It is reviewed by the transaction lawyer, the notary, and the bank trustee. Finally, it is reviewed and registered with a federal seal.

What can I expect to pay for property taxes in Mexico?
When compared to other areas and regions around the world, the annual property tax in Mexico is considered very low. Property taxes have never been considered government revenue. Taxes are paid annually and can be done online. They are calculated using a percentage of the assessed value.

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