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Home Ownership In Mexico FAQ’s


Is home ownership considered a secure investment in Mexico?

Yes, home ownership is considered a secure investment in Mexico. Foreigners have been purchasing homes and land as well as investing in major resorts, for decades in Mexico. This is because the law provides a legal, simple and safe trust to be able to own property in the ‘restricted zone’ along coastlines. The trust places legal title in the name of a Mexican bank under a permit from the Secretary of Foreign Relations, so the bank may administrate the property on behalf of the buyer/beneficiary. Owners enjoy exactly the same rights of ownership as a Mexican national or North American elsewhere.

What are the laws for property ownership by non-Mexicans?

As stated in Article 27 of the Mexican Constitution, non-Mexicans cannot directly own property within fifty kilometers of the Mexico coastline or within one hundred kilometers of Mexico’s international borders. However, a specific long term irrevocable title transfer bank trust system was created years ago to facility the acquisition of this land by foreigners.

In this scenario, the buyer has complete control of the property and owns the beneficial interest in the trust. While the bank has technical “ownership”, for a 50 year term, it has no rights to the property, and is mandated that any dealings with the property are to be solely at the instruction by and for the benefit of the beneficiary which may be an individual or corporation. The fideicomiso allows a buyer to avoid inheritance taxes and to put the property in a will, as well as the obvious rights of real estate ownership including building or developing the property and renting out or selling the property. Foreigners are required to obtain a permit to own the land, as is the case with ‘direct deeds’, from the Secretary of the State, which is essentially an endorsement from the Mexican government of ownership of the property. As such, a fideicomiso affords foreigners the same rights and responsibilities full and direct ownership gives. Upon the sale of the property the buyer can assume the current fideicomiso or can take out another one.

How do I establish a Real Estate Trust or ‘Fideicomiso’?

When you decide to purchase property in Vallarta/Nayarit, you will receive the assistance of our specialists to assist you and make sure that you and your legal counsel understands each and every step in the process.

A Real Estate Trust, or Fideicomiso, is established by paying the Mexico bank of your choice, a nominal fee which includes a property value percentage. These fees cover the costs of investigation and the drafting of the trust agreement.

Typical costs to set up a trust range from five hundred to fifteen hundred dollars in the initial set-up, and approximately five hundred dollars recurring annually. These fees are paid directly to the Mexico bank serving as the trustee.

The trusts are not assets on the books of the bank, nor are banks allowed to take any action without written instruction from the beneficiary of the trust. The bank holds title to the real estate in trust, and the foreigner is designated as the holder of the beneficial rights of the trust, which includes the right to sell, improve, and will to heirs, or exercise any legal right under law. As beneficiary, the foreigner has the equitable interest in the property through whatever market variations may occur. In other words, any equity or the loss of equity accrues to the holder of the trust, not the bank.

What kind of property closing costs should I expect to incur?

Common practice in Mexico is that the seller pays capital gains tax and the real estate broker’s commission. The buyer is responsible for paying the transfer or acquisition tax and all other closing costs including the notario’s fees. Federal law regarding the real estate transfer tax allows each of the Mexican States to determine its own transfer tax rate which may range from 1-4% of the tax appraisal value, which is usually less than the actual sale amount.

Additional closing costs, excluding transfer taxes, are generally 3% of the appraised tax value or more depending on the individual State. The percentages are applied to the highest value of either the amount for which the property is sold, the official tax appraisal or value designated by the property assessment authorities. WE RECOMMEND AN ESTIMATE FROM THE NOTARY BE REQUESTED WHEN YOU HAVE FOUND A PROPERTY YOU LIKE.

Can I purchase Title Insurance in Mexico?

Yes, you can. When purchasing a property in Mexico, normally your notario will review the current escritura (deed) and the lien certificate only, to see if there are existing liens on the property.

It is recommended to have title insurance when the price is one million USD or higher, adjacent to the federal maritime zone, or there have been known problems with the property.

We recommend that a buyer hire a professional bilingual and bicultural attorney to conduct important due diligence before closing on the property. Your attorney can also do a review of the history of title.

If you choose to buy in an area which has not had title insurance previously, there will be an additional cost for the research of the neighborhood or community.

If you choose to buy title insurance, the title commitment is used before closing so you can see the conditions under which they will issue title. The actual insurance is issued after the deed is registered at the public registry.

What kind of property taxes can I expect to pay in Mexico?

The annual property tax in Mexico is considered very low compared to the rest of the world. Property taxes are calculated using a percentage of the assessed value which was determined during purchase. Yes, our brokerage has close to 20 years experience

Does GoodLife Puerto Vallarta offer Property Management and Rental Services?

Yes, our brokerage has 18 years experience in Property Management and Rental Services. This professional service is available to any homeowner. Services can include: housekeeping, maintenance, shopping and stocking of your home, fresh linens for arrivals, transportation and bill payments.

Are home furnishing packages available in Mexico?

Yes, working with our professionals, home furnishing packages can be chosen after your purchase to reflect your taste, needs and lifestyle.


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  1. Pingback:Fideicomiso. Why You Want One. | GoodLife Puerto Vallarta

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