Foreigners can legally purchase and possess real estate in Mexico. Aside from the laborious procedure of creating a bank trust (fideicomiso), foreigners can purchase real estate in Mexico with relative ease. You can own the house or apartment on the beach in Mexico that you've always wanted for a comparatively small price! Due diligence and a little research are all that are required. Everything you need to know to start buying real estate as a foreigner and owning an expat apartment in Mexico is covered below.
Where To Buy Real Estate In Mexico
If you are interested in Mexican real estate, you should focus on several cities. They are better to have property for foreigners. Apartments and villas are available now. You can choose the object under construction or that is already built.
Mexico
Mexico is the capital of the country, a noisy metropolis, impregnated with history and culture and firmly rooted in the present. Although the city fell four places in the 2023 Economic Competitiveness Index, it continues to rank fifth in the Mexico Institute of Competitive Development’s 2023 Urban Competitive Index. (IMCO). In 2022, about 40 percent of real estate sales in Mexico came from foreign buyers, and according to the Mexican Sotheby's International Realty, this figure will rise to 60 percent this year.
If you are looking for fashionable neighborhoods to move to Mexico, look for Lomas de Chapultepec and Jardines del Pedregal, home to the business and political elite of the city, where houses usually cost millions of dollars. Emigrants prefer the Coyocan and San Angel areas for their colonial-style houses and lively artistic surroundings, as well as the Roma and Condesa neighborhoods, which are popular with families and young professionals, according to Daniel Sanchez of Sotheby's International Realty, Mexico.
Puebla
Puebla attracts visitors with churches from the 16th to the 17th centuries and colonial buildings. Puebla also ranks among the top 15 most competitive cities in Mexico and is one of the three to devote more than 10 percent of its federal budget to improving public transport.
The elite real estate market in Pueblo has grown in recent years. The proximity of the city to Mexico City and its thriving cultural life also make it an attractive destination for those looking for a second home or investment real estate.
Maya Riviera
The Maya Riviera is a favorite holiday destination for millions of Americans. It is not surprising that this picturesque region, impregnated with Mayan history and culture, is also in demand among expatriates. Toulouse, with its fashionable wellness-oriented atmosphere and fantastic restaurants, along with Playa del Carmen, famous for its nightlife, all-inclusive resorts, and beautiful beaches, are excellent options for those considering moving.
One of the main differences between Playa del Carmen and Toulouse is that in Playa Del Carmen real estate offers and housing prices are determined by proximity to the sea, as access to the beach is practically throughout the city.
Mérida
The capital of Yucatán is regularly ranked among the safest cities in Mexico. The Spanish occupied Merida in the middle of the 16th century, but the city has a rich Mayan heritage. In fact, some of its colonial buildings were built from the stones that remained from the demolished Mayan dwellings. In addition to the colorful architecture, residents also enjoy proximity to the beaches of the Gulf of Mexico, which are less than an hour's drive from the city.
The economy of Merida is one of the most competitive among the largest cities in Mexico, where retail dominates the local market. The city is also home to a large number of indigenous people, and about 8% of the total population speaks the language of Indigenous peoples.
San Miguel de Allende, Mexico
Fantastic food, great artistic surroundings, affordable living, beautiful architecture, a lively international community, and spring weather all year round are reasons to move to San Miguel de Allende.
The market is developing rapidly, with young, educated, and mobile working families moving to San Miguel.
Puerto Vallarta
Interest in this lively Pacific coastal city is growing rapidly with a record number of passengers arriving in Puerto Vallarta in 2023. Tourists flock here to get warm under the hot Mexican sun and get acquainted with the culture and nightlife. Those who choose to make this place their home will also benefit from almost perfect weather all year round, affordability, access to good health care, and excellent economic opportunities.
Monterrey
Monterrey is the major economic power of Mexico, known as the industrial capital of the country. Due to its proximity to the United States, many companies have established their activities there, benefiting from rapid access to the US market.
Thanks to this Monterrey is able to attract people from all over the world, wishing to get a better quality of life and a more highly paid job.
The city is surrounded by an impressive mountain range of the Eastern Sierra Madre, which turns it into a paradise for lovers of active recreation.
Los Cabos
Los Cabos will be the perfect home for expatriates. People are attracted by the diversity of its landscape: kilometers of sandy beaches, impressive views of the desert, and the beautiful mountain range of Sierra de la Laguna, located at the threshold of the biosphere reserve.
How To Buy Land In Mexico?
You will need a good lawyer who will conduct the deal to acquire a land assignment. All land sold in Mexico has a certain status. Some objects cannot be bought by foreign subjects or investors.
There are 6 types of land use in Mexico:
- Residential land - land intended for the construction of housing.
- Manufacturing - territory for industrial and production purposes only.
- Industrial - area for various special constructs and installation of necessary equipment (communication towers, windshields, etc.).
- Infrastructure - all objects related to infrastructure activities.
- Public - parks, landscapes, places of recreation, which are national goods for public use.
- Green spaces are parks, landscapes, places of recreation, that are not national goods for public use.
The real estate lawyer will help to check all the documentation provided and will clean up the discrepancies together with the seller and after you can conclude a contract.
How To Buy Real Estate In Mexico: Step-By-Step
The process of acquiring real estate in Mexico for foreigners is as follows:
- Search and book accommodation. After choosing an object you need to provide the owner of the property with an offer to buy through the realtor. This document does not require notarial certification and can be signed, scanned and sent by e-mail. At the same time, it is necessary to make a deposit of 5-10% of the value of the object, which confirms your seriousness and provides a guarantee of the transaction. This can be done in cash or by bank transfer.
- Formulation of a bank trust. In the case of purchases in strategically important territories closer than 100 km from the state border and nearer than 50 km to the coast, you will need to issue a bank trust (fideicomiso). This is the authority to manage property. Although the certificate of ownership is kept in the bank, you remain the full owner of the purchased housing.
- Signature of the document on the right of ownership. The final registration of the transaction is achieved by signing the ownership document (escritura) with a Mexican notary (notario publico). This notary records all real estate transactions and guarantees their legality.
- After preparing a bank trust, you transfer the balance of 90-95% of the value to the agency account.
- Registration of property. After the signing of the transfer of ownership, the notary registers the object in the state registration chamber (registro publico).
Real estate prices in Mexico vary depending on the location and type of property. According to the Statista report, in the first quarter of 2024, Mexico was the most expensive place to buy residential real estate in the country. The average price in the Mexican capital is 3.7 million Mexican pesos (about $220,000), roughly twice the national average.
Among the states with high average housing prices are Najarit (2,383,490 Mexican pesos, or $140,000), Morelos (2,128,060 Mexican peso, or US$130,000), Baha California Sur (2,107,010 Mexican pesos, or USD125,000) and Keretaro (2,026.010 Mexico pesos or $120,000).
Locations where you can find cheap apartments in Mexico include Puerto Aventuras, Akumal, North Coast of Cosumel, Cancún, Puerto Morelos, and Toulouse. Apartment prices there range from $90,000.
Taxes In Mexico
- The purchase tax is about 2-4% of the transaction value depending on the state in which you buy the property.
- Real estate valuation tax. It is possible that the tax authority will carry out an independent valuation of the property after its acquisition. If the estimated value exceeds 10% of the purchase price, you will be required to pay 20% tax on the difference between these amounts.
- Fee for registration in the Federal Register. The buyer is obliged to pay a registration fee for updating records in the state register and issuing a new certificate of ownership. This rate depends on the cost of the transaction and varies from state to state, but is usually around 2-4% of the value of the property.
- Public notary services. Notarial fees are usually between 4% and 7% of the cost of sale.
- Fee for property trust services, fideicomiso, if necessary. In case the property is located in “restricted” zones (within 50 km/100 km from the coast or border), you will have to pay the bank for the establishment and management of the property trust. The cost of establishing a trust is typically around $1,000, and annual maintenance is between $1000 and $2000.
FAQ
Can you own beachfront property in Mexico?
Yes! Foreigners interested in properties within 50 km of the coast or 100 km from a border will have to purchase the beach property through a trust with a Mexican bank known as a fideicomiso. It is a fairly straightforward process, and nothing to be scared of.
What is a fideicomiso?
With the use of a fideicomiso, foreigners can purchase real estate in Mexico and enjoy all the privileges accorded to native citizens. This is a very popular, safe, and authorized method for foreigners to own real estate in Mexico. You can build on it, live there, sell it, rent it out, or leave it to your heirs.
How long does a fideicomiso last?
It lasts for 50 years and after that, it is renewable by the owner or their heirs. This means that ownership does not expire as long as it is renewed.
How much does a fideicomiso cost?
Fideicomisos do add some time and cost to the buying process. The setup costs range from $500 to $1,000 USD and maintenance fees cost around $500 to $700 USD per year.
Can I hire a lawyer to help with the contract?
Since your sales contract will be in Spanish, many purchasers want to take it to a laywer, or notary in Mexico, for examination and independent commentary. We can recommend a notary if you're looking to buy on the Riviera Nayarit.
Are there mortgages for foreigners in Mexico?
Yes, but it will require a lot of paperwork, months of processing, and high-interest rates. 99% of sales are cash sales due to the costs of mortgages.
Can the Mexican government sieze my property?
No, the Mexican government does not have the legal authority to seize your property if you bought it properly and are not breaking any laws on it, nor do they wish to deter foreign investment or tourism.
Mexico is not allowed to expropriate property directly or indirectly under NAFTA unless it is needed for a public purpose. For instance, if the land is needed to construct railroads or roadways. The majority of nations, including the US and Canada, use the same procedure.