BUYING A PROPERTY IN MEXICO

Can I as a Mexican Foreigner, purhcase property within the restricted zone under a Mexican corporation entity?
It depends, if you want to acquire for residence purposes you need to acquire with a bank trust. If you want to acquire for commercial purposes you can acquire via Mexican Corporation with certain procedures and requirements. If you want to acquire for other purposes other than residential, you can acquire via Mexican Corporation with certain requirements and procedures.

Can I own property near or in front of the ocean?
Yes, laws pased in 1973 and 1993 have made it possible for foreigners, foreign firms, and Mexican firms with foreign participation to acquire interests in coastal real estate through a bank trust. What are my rights as a buyer? The Trust is a legal substitute for fee simple ownership, but in many cases, the Trustee is the legal holder of the property. As Beneficiary, you have the right to sell your property without restriction. You may also transfer your rights to a third party or pass it on to named heirs.

Can I own property in Mexico?
Yes, Mexican foreigners may obtain direct ownership of property in the interior of Mexico. Mexican foreigners can also own property along the ocean front. By Mexican law, properties within the 50 km of any ocean front and 100 km of any country boarder are acquired via a bank trust or via establishment of a Mexican Corporation.

Costs and Taxes: Buying

Acquisition Tax: This tax is paid on the sale value of the property and is equivalent to about 2% depending on the state in which you buy. This tax is paid whether the property is sold, transferred, donated, placed into trust, split off or merged.

VAT (Sales Tax): No Value Added Tax (Sales Tax) is payable on residential property. Commercial Property transactions are liable to VAT at the current rate in addition to the Acquisitions Tax.

Appraisal Tax: The Tax Authority may choose to perform a commercial appraisal of the property after you purchase it. If the appraisal value is greater than 10% of the price you paid for it, you will be asked to pay 20% tax on the difference between the two amounts. This sum is due within 15 days of the date of the appraisal report.

Registry Fee: In order to have the Public Records updated, a 1.3% fee (based on the value of the transaction) is paid by the buyer.

Public Notary Fees: You will be required to pay fees for services provided by the Notary Public. These are about 1.5% of the transaction value, plus the cost of the official appraisal (as described in Valuation section, for tax purposes).

Bank Trust: If you purchase property within the 50/100km restricted zones, you will need a bank to set up and manage a trust for you. Shop around, as prices vary from bank to bank. Set-up fees can cost around US$1000, with annual service charges between US$1000-$2000. The annual service fee will cover legal obligations (e.g. the filing of necessary documents annually) by the bank on your behalf.

Lawyer / Attorney Fees: If you hire a lawyer / attorney, you will also need to pay him/her with fees for services they undertake on your behalf. These should be negotiated in advance.

Land / Building Surveys: If you need to undertake any land or building surveys, these will have to be paid for separately. Cost will depend on type, extent and complexity of surveys undertaken.

Foreign Office Permit: Your permit from the Mexican foreign office will cost around US$150.

Service Fees: If you are buying a house in a gated community, or an apartment, be sure to check on the annual service fees, and have these put in writing. Service fees can range from US$100 a year to US$1000+ a year, depending on location, number of houses or apartments in the enclosure and amenities offered.

Title Insurance: When you buy property in Mexico, you would do well to consider purchasing Title Insurance. Rates are based on the sale value of the property and are charged at around US$5-US$5.50 per US$1,000 of the value.