There are many places in Mexico where you can find a good deal on buying Mexico real estate. From the big cities to the beach resort areas, Mexico has plenty to offer. Many people decide to pack up their things and to purchase real estate in Mexico. They may be deciding to buy a second property for vacation purposes or they may be buying something to turn into their permanent residence. Either way, there are some great places to choose from in Mexico.
What many people do not realize when they make the decision to buy real estate in Mexico is that the rules may be different than what they are used to. It is never a good idea to make a significant investment in real estate unless you understand all of the things that are involved and that have to be done. That is true when you are buying real estate in Mexico. Before you start to look for any property, it is worth learning what to expect and what the process is for buying real estate in Mexico when you are a foreigner.
The Constitution of 1917 set rules about who could own property in Mexico. It could only be owned by Mexican Nationals or it had to be communal property. That meant that it was impossible for a foreigner to buy property in Mexico. That constitution was amended in 1973. After that time foreigners could own property as long as it was not in a restricted zone. The restricted zones were defined as areas within a 100 kilometers of an international border or within 50 kilometers of a coastline at high tide. Another amendment added in 1993 allowed foreigners to purchase real estate in the restricted zones through a Fideicomiso system.
Under this system, foreigners could purchase property through a bank trust. The bank is the trustee. They are the legal owner of the real estate. The foreigner is the beneficiary of the trust. They have all of the rights of ownership and can sell, lease, mortgage or pass the trust to their heirs as they want.
The trust that is created is good for 50 years. It can be renewed at any time during that 50 year period for another 50 years. If it is no renewed after 50 years, there is another 10 years to submit the application to renew the trust.
Another way to purchase property is through a Mexican corporation. They can purchase property anywhere in Mexico, but the property is considered commercial property and is subject to higher utility fees. Corporations cannot own single family residences.
The Buying Process
Searching for a property is similar to other countries. The foreigner can work through agents that list properties for sale. Once they find a property they want to buy, they can negotiate the sales price. Upon the agreement on price a deposit of 5 to 10% is paid to the buyer.
The foreigner needs to then obtain a permit to buy the property from the foreign secretary’s office. This will include a clause that the foreigner agrees that, foreign jurisdiction will not be sought in the property.
Once that permit has been obtained, the seller needs to provide the land deed. It is a good idea to have a lawyer review this deed for any potential problems. The deed is transferred to the buyer and the buyer pays the seller the remainder of the money. The process of registering the property can last anywhere from 48 to 108 days.
Besides the agreed upon price of the property, there are other costs that have to be paid. Some are typically paid by the buyer and others are paid by the seller.
The buyer pays:
- Notary costs
- Acquisition tax
- Registration fees, other fees
- Title insurance
The seller pays
- Real estate agent fees
Make sure that when you are a foreigner buying property in Mexico, you have the help of a professional experienced in this type of transaction. It will help you get exactly what you are looking for without any additional risks. We have a Mexico real estate buyer’s agent to help you buy property in the Mayan Riviera real estate market.