Property purchases by foreigners in Mexico take place through the fideicomiso system (Trust).
If you’ve done your due diligence, and you are represented by experienced real estate professionals and a licensed real estate attorney, you’ll have no problems.
The trust is made through a bank, allows a foreign buyer to hold property with all the rights and privileges of a owner. You can use, sale, rent or inherit the property. Plus, you can easily transfer the trust to another foreign buyer, should you wish to sell.
A trust is good for 50 years and is renewable thereafter (by you or your heirs).
The cost to initiate it, is about 3,000 USD. The annual fee vary from each bank, starting from 500 usd.
Please keep in mind next points to make sure you and your investment remain safe throughout the process:
1. Get a referral: Not all real estate agents in Mexico are reliable or certified, so be sure your agent it is. Also check your network between friends, to find a trusted agent, this is also a good idea.
2. Know the market: Whats going on in the area of your interest?, check the prices, updates in law, government situation, etc, for all this information, a local real estate agent is very helpful.
3. Get an inspection. Many homes in Mexico are on the newer side and won’t have any problems, but it’s still a good idea to have your new property checked for things like pests and mold, which can crop up pretty swiftly in the warm climate.
4. Never mail money. If the seller isn't willing to make transactions face to face, or to give the proper documentation or receipt, it’s probably a good idea to walk away.
5. Trust your gut. Don’t go through with a purchase you’re not sure about.
Steps to follow for buying a property as a foreigner in México:
Investigate a Mortgage or, if you’re in the restricted zone, a bank trust or fideicomiso
Engage a real estate agent of your confidence
Find your property HERE and make an offer.
Have a sale contract written by a notary
Finalize your fideicomiso or mortgage with the bank.
Sign the contract
Pay taxes
Taxes and fees:
Find here some referral about it, please notice this can vary from each situation.
Agency/Agent fees, which are variable and can be negotiated, about 6% commission fee.
Notary/Lawyer fees, which are variable but are taxed at 16% VAT
Acquisition Tax, between .2 and 4.5%
Registration Fee, which can be anywhere from .02 to 1.8%
Title insurance, at roughly .5%
We hope this gives you a better idea about the process of buying a property in México, feel free to contact us to answer all your questions.
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References:
Transferwise,com
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