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Guide to Buying and Owning Mexico Real Estate

24 March, 2020

Guide to Buying and Owning Mexico Real Estate

Owning property in Mexico is a fantastic way to earn ongoing income for a secure retirement and also enjoy some of the world’s most amazing vacation destinations. This guide to buying and owning Mexico real estate covers the basics and will help expats understand how to maximize ROI and find the right investment property for your situation.

Free Download: Buying Safely in Mexico

“Mexico real estate has a lot to offer in terms of great weather, beautiful scenery and authentic Latin American culture, plus you will find lots of affordable real estate in Mexico”, wrote International Living. “Mexico has it all… rich culture, perfect climate… affordable living… not to mention mountains, beaches, deserts and just about everything in between”.


The Buying Process for Foreigners to Own Mexico Real Estate

The Buying Process for Foreigners to Own Mexico Real Estate

Searching for real estate in Mexico is very similar to the process in other countries, thanks at least in part to the Internet! Just make sure you work with a trusted realtor / real estate investment advisor who truly knows the area(s) you are interested in and can show you a wide variety of properties. Although many things are exactly the same as buying real estate anywhere else, there are some aspects of the buying process in Mexico that foreigners need to understand.

In 1917, the Mexican constitution established rules that made it virtually impossible for foreigners to own property in the country, but in 1973 the constitution was amended and now direct foreign ownership of property throughout Mexico is allowed, with the exception of the Restricted Zone.

What is the Restricted Zone in Mexico?

Defined as any area within 100 kilometers of an international border and within 50 kilometers of any coast, the Restricted Zone was originally designed to protect the country’s borders, but today foreign buyers simply need to set up a fideicomiso, which is a real estate trust with a bank, in order to purchase property in Mexico’s Restricted Zone.


Under this straightforward system, foreigners can legally purchase real estate in Mexico through a bank trust (known as a fideicomiso), wherein the bank acts as trustee and the buyer serves as the beneficiary of the trust. As the beneficiary, the buyer is the only legal owner of the real estate that is held by the trust, including the right to sell, lease, mortgage or pass the trust along to heirs if they choose.



More About Mexico’s Fideicomiso System for Buying Real Estate

More About Mexico’s Fideicomiso System for Buying Real Estate

“The bank is required to check ownership and insurance, and to verify the property is free of liens”, wrote Global Property Guide. “A trust is granted for a 50-year period. The trust is renewable at any time (for another 50-year period) by submitting an application to the bank, but if the 50-year period expires without renewal, the owner has another 10 years in which he may submit an application to renew the trust”.

In addition, if the property you are buying already has a fideicomiso, the existing bank trust can either be transferred to the new owner - where it will remain valid for the remainder of the initial 50-year period), or the existing trust can be renewed. One benefit for the buyer if the property is already in a fideicomiso, is that probate and transfer taxes can be avoided if the trust is transferred.


Final Steps to Buying Property in Mexico

Once you have found the right property - whether it’s a true investment property that pays ongoing income for retirement, or a private vacation home that finally offers enough space for the entire family to enjoy vacations together - your Mexico realtor / real estate investment advisor should work to negotiate the sales price. Similar to real estate transactions anywhere else, a deposit is typically required after you come to an agreement on price, then the buyer will need to obtain a permit (promissory agreement) to buy the property.

“It is simple and straightforward to buy property in Mexico for foreigners”, wrote Live and Invest Overseas. “However, you need to do your due diligence and hiring a real estate professional is a must”.


Final Steps to Buying Property in Mexico

After the permit has been acquired, the seller will provide the land deed and the trust is established. All documents should be reviewed by an English-speaking Mexican attorney prior to closing and your realtor / real estate investment advisor should be able to help connect you with reputable legal representation. The deed will ultimately be transferred to the buyer when the seller receives payment for the remainder of the purchase price.

Keep in mind the total process of registering the property can take up to three months before the final deed is issued. Also, be sure to do a walk-through of the home or condo before closing, just to make certain the property is being handed over in satisfactory condition.


Last Points to Consider

Finally, it’s imperative to clearly define your property objectives before diving in and buying real estate in Mexico. For example, are you looking for a place to live, either full or part time? Is your financial portfolio lacking a hedge against inflation? Do you need to diversify and protect your assets from stock market volatility? Are you looking for income producing investment properties, or the perfect place to retire? Whatever your Mexico real estate dreams may be, an experienced realtor can help you find the perfect property to make them come true, so be sure to ask for client testimonials and choose your partner wisely!


Want to Know More About Investing in Mexico Real Estate? | Download our Free Guide Buying Safely in Mexico

Topics: Real Estate Mexico Learn How