Mexico Real Estate: A Comprehensive Guide
If you are considering living, investing, or retiring in Mexico, there are many places where you can find great deals on real estate. From big cities to beach resorts in Cabo, Baja, and the Mayan Riviera, Mexico offers a wealth of opportunities. Many people purchase real estate in Mexico as a second property for vacation purposes or as their permanent residence. However, it is important to realize that the rules for owning Mexico real estate may be different than what you are used to, and it is crucial to understand the entire process before making a significant investment.
Before starting your property search, it is worth learning what to expect and the process for owning real estate in Mexico as a foreigner. The Mexican Constitution of 1917 established rules about owning real estate in the country, stating that only Mexican nationals could own it, or it had to be communal property. However, this constitution was amended in 1973 to allow foreigners to own property, as long as it was not in a restricted zone. The restricted zones were defined as areas within 100 kilometers of an international border or within 50 kilometers of coastline at high tide. An amendment added in 1993 allowed foreigners to purchase real estate in restricted zones through a Fideicomiso system.
The Fideicomiso system allows foreigners to purchase property through a bank trust, where the bank is the legal owner of the real estate and the foreigner is the beneficiary of the trust, with all the rights of ownership. The trust lasts for 50 years and can be renewed for another 50 years at any time during that period. If the trust is not renewed after 50 years, there are another 10 years to submit the application to renew it. Another way to purchase property is through a Mexican corporation, which can purchase property anywhere in Mexico but is subject to higher utility fees. However, corporations cannot own single-family residences.
To buy property, foreigners can work with a Mexico real estate agent that lists properties for sale. Once they find a property, they can negotiate the sales price, and upon agreement, a deposit of 5% to 10% is paid to the buyer. The foreigner then needs to obtain a permit to buy the property from the foreign secretary's office, with a clause stating that foreign jurisdiction will not be sought in the property. Once the permit is obtained, the seller provides the land deed, which should be reviewed by a lawyer for any potential problems. The deed is transferred to the buyer, and the buyer pays the remainder of the money. The process of registering the property can take anywhere from 48 to 108 days.
Aside from the property price, there are other costs that have to be paid. Notary costs, acquisition tax, registration fees, and title insurance are typically paid by the buyer, while real estate agent fees are paid by the seller.
It is essential to have the help of a professional experienced in this type of transaction to ensure a smooth and successful buying process. With the proper guidance, buying and owning Mexico real estate can provide you with the property you desire without additional risks.