TOP Frequently Asked Questions About Mexico Real Estate
Can foreigners own property in Mexico?
Yes, foreigners can own property in Mexico, but there are certain restrictions on owning property in certain areas, known as the "restricted zone." The restricted zone consists of land within 50 kilometers (approximately 31 miles) of the coast and 100 kilometers (about 62 miles) of the border. Foreigners can still own property in the restricted zone, but they must utilize a bank trust called a "fideicomiso" to hold the title to the property.
Can I use a real estate agent to help me buy property in Mexico?
Yes, you should use a full-service real estate agent to help you buy property in Mexico. A real estate agent can assist you with the entire process, from finding a suitable property to negotiating the purchase price and handling the closing. It is important to choose a reputable and experienced agent who is familiar with the local real estate market and the legal requirements for purchasing property in Mexico. AMPI is Mexico’s Professional Designation and is similar to NAR (National Association of Realtors).
How do I purchase property in Mexico?
To purchase property in Mexico, you will need to sign a purchase agreement, pay a deposit when all conditions are met, pay a deposit for the closing costs, and then pay the balance at closing. Your agent will also work with a Notario of your choosing (we will consult), and the agent will walk you through the closing process.
How long does it take to close on a Mexico property?
The closing process for purchasing property in Mexico can vary, but it typically takes six weeks to three months to complete. The exact closing time will depend on various factors, such as the location of the property, the complexity of the transaction, and any issues that may arise during the process. It is important to work with a qualified real estate agent and attorney to ensure that the closing process goes smoothly and that all necessary steps are completed in a timely manner.
What are the closing costs for purchasing property in Mexico?
Closing costs for purchasing property in Mexico typically range from 3% to 6% of the purchase price, depending on the location and type of property. These costs may include taxes, fees, and other charges. The lower the price of the property, the more (as a percentage) you will pay in closing costs.
Is financing available for purchasing property in Mexico?
Yes, financing is available for purchasing property in Mexico, but it may be more difficult to obtain than in other countries. Some Mexican banks do offer mortgage loans to foreigners, but the terms and conditions may be different than what you are used to. You may also be able to obtain financing through a private lender or by using a home equity loan or line of credit from a lender in your home country. We have over 700 sales and have only worked with four mortgages. The last one was over 10 years ago. Mortgages also lengthen the closing process by double.
Are there any tax implications for purchasing property in Mexico?
Yes, there are tax implications for purchasing property in Mexico. You will be required to pay a value-added tax (VAT) on the purchase of commercial property, as well as annual property taxes (a lot lower than north of the border). You may also be required to pay capital gains tax if you sell the property in the future.
What are the costs of maintaining a property in Mexico?
The costs of maintaining a property in Mexico will depend on the size and type of property you own, as well as its location. Generally, property maintenance costs in Mexico are lower than in other countries, but you should still budget for ongoing expenses such as utilities, insurance, property taxes, and HOA fees…if applicable.
Can I rent out my property in Mexico?
Yes, you can rent out your property in Mexico, but there are certain rules and regulations that you will need to follow. You may need to obtain a permit from the local authorities and pay taxes on any rental income you earn. Please chat with your agent about this.
Is it safe to buy property in Mexico?
Mexico has a reputation for being a safe place to buy property, but as with any real estate purchase, it is important to do your due diligence and research the area where you are considering buying. This includes checking the crime rate, the stability of the local real estate market, and the overall quality of life in the area.
What should I consider when buying property in Mexico?
When buying property in Mexico, there are several factors to consider. These include the location of the property, the overall condition of the property, the potential for rental income or resale value, and any additional costs or fees associated with the purchase and ownership of the property. It is also important to carefully review the purchase agreement and any other legal documents related to the property and to seek the advice of a qualified attorney if you have any questions or concerns. We have been working with the same real estate attorney since 2004 and he becomes your attorney when you work with us.