FAQ’s About Real Estate in Mexico
Can foreigners, including U.S. citizens, safely purchase real estate in Mexico?
Yes, foreigners can safely buy real estate in Mexico. The Mexican government allows foreign buyers to take ownership of land through a fee simple deed.
Does the Mexican government put restrictions on foreign buyers who wish to purchase property near the beach?
Yes. If foreign buyers want to purchase land within 50 kilometers from any coastline or 100 kilometers from Mexico’s international borders, the buyer must hold the property in a Mexican bank trust, known as a “Fideicomiso.”
How does the Fideicomiso work?
First, a foreign buyer must select a Mexican bank to become the trustee. Once the trust is acquired the buyer, plus anyone else specified by the buyer, becomes the sole beneficiary of the trust, thus owning the property. Buyers have full rights to do whatever they wish with their property; it can be rented, leased, sold or given away. The trust also enables the property owner to name a beneficiary upon death, and a Mexican will is not necessary for the deceased’s wishes to be carried out according to the trust.
Does the Fideicomiso have a time limit?
The initial trust term is 50 years and can be renewed every 50 years with no limit as to the number of times the trust can be renewed. This allows a beneficiary to hold the property in perpetuity by renewing their trust, thus indefinitely owning the property.
How much does the Bank Trust cost?
Based on the current tariff, the bank charges the person desiring the Fideicomiso an initial fee from approximately $500 to $1500 USD for establishing the agreement and the trust. The annual charge for managing the trust may vary from $300 to $1,000 USD per year on an ongoing basis. These fees are paid directly to the bank that serves as the trustee.
What role does a Public Notary play?
In contrast to the U.S., a public notary, “Notario”, is a government-appointed lawyer who processes and certifies all real estate transactions, including drafting and reviewing all official documents to ensure the proper transfer of the property.
Is the sale of Mexican property taxed?
Yes. Any buyer, foreign or not, pays a 2% transfer tax upon the property’s original purchase price. Buyers must also pay annual Mexican property taxes. Currently, the tax rate is .08% of the assessed value of the property. Discounts are available on this tax for early payment within the assessed tax year.
Is title insurance available?
Yes. Title insurance protects a purchaser against damage or loss arising from a defect or lien on the property’s title. Quivira is pre-qualified for title insurance through First American Title International. This relationship allows any buyer who wishes to purchase property within Quivira the option to purchase insurance directly from First American Title.