Buying Properties in Mexico FAQs

I am not a Mexican citizen, can I purchase real estate in Mexico?

Yes. The Foreign Investment Law was modified in 1971, allowing foreigners to now own property in the restricted zone with a bank trust or “Fideicomiso”, therefore making the real estate purchase a much safer investment. The bank, which is known as the trustee, holds the trust deed for the purchaser of the property, which is known as the beneficiary. This property is not part of the bank's assets and cannot be subject to any lien or attachment for any bank obligations. The owner (beneficiary) has all of the ownership rights to the property and may sell, rent, remodel or pass on to their heirs.

What are my rights as a buyer?

The Trustee (Mexican Bank) is the legal holder of the property, but as a beneficiary of the trust, you have the right to sell your property without restriction. You may also sell your rights to a third party, or pass it on to named heirs.

What happens if the beneficiary dies?

At the time the trust is set up, a substitute beneficiary is named. This person has the same rights as the first beneficiary in case of his own death. A United States LLC may also be the beneficiary.

Is the Trust renewable?

Yes. According to the Foreign Investment Law passed in 1993, trusts can be renewed for an indefinite number of successive 50 year periods.

How much will my closing costs and annual taxes be?

Closing costs before closing are determined by the Notary. Notaries in Mexico are actual state government appointed lawyers who have the power and authorization to close real estate transactions. The closing costs, typically between 4-5% of the purchase price, include their fees, transfer taxes and establishing the trust. Closing costs may increase if you include title insurance and financing fees. Cabo Property Finders will assist you with the closing process. In addition, there is a yearly flat fee of $500USD charged by the bank for its services as trustee over the property, and nominal local property taxes.