Buying Process

Discover the streamlined process of purchasing and owning real estate in Mexico as a foreigner. With clear legal provisions in place, investing in Mexican property has never been more accessible. This guide outlines the essential steps and considerations for acquiring your dream property south of the border.

 

Owning real estate in Mexico as a foreigner is a straightforward and lawful endeavor. Unlike in some countries, Mexico welcomes international buyers with open arms, offering a well-defined framework for property acquisition.

Navigating Special Regulations:
While Mexican citizens can freely purchase property throughout the country, foreigners encounter specific regulations, particularly in sought-after regions. For properties situated within 50 km of the coastline or 100 km from a border, alternative avenues are employed for ownership. These areas require property acquisition through a trust managed by a Mexican bank, known as a “fideicomiso,” or via a corporation.

 

The Fideicomiso Approach: Your Path to Property Ownership

 

Embracing a fideicomiso, or Bank Trust, empowers foreign buyers with the same property rights as Mexican citizens. This secure and widely adopted method facilitates foreign ownership of Mexican real estate, granting the freedom to utilize, develop, lease, sell, or bequeath the property as desired.

 

Key Benefits of the Fideicomiso:

 

  • Flexible Ownership: A fideicomiso allows one or more individuals to co-own the property. Married couples can jointly own, and owners can designate heirs.

  • Longevity: The trust’s duration spans 50 years, with the option for renewal by the owner or their heirs. This ensures perpetual ownership as long as renewal is pursued.

  • Transferability: Transferring ownership is seamless when the time comes to sell the property.

  • Portfolio Management: Through a single fideicomiso, international buyers can manage multiple properties in Mexico.

Enjoy all the benefits of ownership, and embark on your journey to make Mexico your second home or greatest investment!

Exploring Alternative Paths: Buying Property via a Corporation

If you’re seeking an alternative route to property ownership in Mexico, establishing a Mexican Corporation presents an appealing option. This approach circumvents the need for a fideicomiso and allows for property acquisition under the umbrella of a corporate entity.

 

Creating a Mexican Corporation: A Swift Process

Forming a Mexican Corporation offers a viable avenue for foreign buyers to avoid the fideicomiso arrangement. The standout feature of this method is that the property is purchased directly by the corporation, eliminating the necessity for a trust arrangement.

Speedy Formation and Minimal Requirements

Crafting a Mexican Corporation is a streamlined process that unfolds within a mere two weeks. The only prerequisites are a minimum of two partners, both of whom can be foreigners—no Mexican citizenship is mandatory. The associated costs for establishing this corporate entity are capped at a maximum of $1,500 USD, making it a cost-effective choice.

 

Swift Timeline: From Formation to Property Acquisition

Once the Mexican Corporation is in place, it functions as a domestic entity, affording you the privilege to procure property in Mexico in the same manner as a Mexican national would. In as little as a month and a half, you can navigate the creation of the corporation and finalize the property acquisition under its corporate umbrella.

 

Informed Opinion: The Ideal Path

In the realm of property acquisition strategies, the choice between a fideicomiso and a Mexican Corporation hinges on your intentions and goals.

 

Fideicomiso: Residential and Personal Ventures

If your aim revolves around personal residential use of the property and you don’t anticipate substantial income generation, a fideicomiso remains an advantageous choice. This method aligns seamlessly with residential purposes, granting you all the rights and privileges of a Mexican citizen.

 

Mexican Corporation: Business Endeavors

Conversely, if your plans involve business pursuits or if the acquired property will serve as the foundation for commercial activities, a Mexican Corporation is the logical selection. By leveraging this method, you’re equipped to seamlessly integrate the property into your entrepreneurial ventures.

 

Conclusion: A Tailored Approach to Ownership

In the spectrum of property acquisition strategies, Mexico offers tailored solutions to align with your distinct intentions. Whether you opt for the secure framework of a fideicomiso for personal use or harness the potential of a Mexican Corporation for business endeavors, you’re equipped to navigate Mexico’s real estate landscape with confidence and clarity. Your decision hinges on your aspirations, ensuring that your path to property ownership is aligned with your goals.

 

Property Taxes in Mexico: A Brief Overview

Understanding property taxes is crucial when considering real estate investment in Mexico. Here are the key tax components to be aware of:

 

– Transfer Tax: When a property changes ownership, the buyer is liable for a 2% acquisition tax. This tax forms part of the closing costs for the transaction.

 

– Property Tax (Predial): Commonly referred to as “predial,” this tax is an ongoing expense. On average, it amounts to around 0.1% of the property’s assessed value at the time of sale.