Step by step guide to your dream home

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A Fideicomiso, or a bank trust, is a legal arrangement sanctioned by the Mexican Government, specifically designed for foreign investors wanting to purchase property within the "restricted zone." This zone includes any land within 100 kilometers of national borders and 50 kilometers of the coastline.

Essentially, a Fideicomiso allows you to own property indirectly. While a Mexican bank holds the legal title as your trustee, you retain all the benefits and responsibilities of ownership—similar to having direct ownership (known as 'fee-simple' in other jurisdictions). The bank, acting as your trustee, cannot leverage or use the property; its role is strictly to represent your interests.

This trust can last up to 50 years and is renewable. Under this arrangement, you have the full flexibility to lease, sell, renovate, will, or even mortgage the property just as if you were the direct owner.

The process of purchasing real estate in Mexico typically begins with an 'Offer to Purchase.' This initial contract outlines the terms of the purchase, including the deposit details, acceptance deadline, price, and payment plans. Once the seller accepts this offer, both parties will sign a purchase agreement. This contract requires the buyer to deposit 5-10% of the property's value and includes penalties for either party if they decide to withdraw from the deal.

Before proceeding with any money transfer or contract signing, we strongly recommend consulting with our team. We can help navigate potential complications and advise on minimizing fees and taxes associated with your purchase.

When setting up a Fideicomiso trust, the notary plays a crucial role. They begin by verifying the legal status of the property. This involves inspecting for unpaid taxes or any other legal encumbrances, and gathering necessary documents such as the property deed. The notary also checks if the seller is legally allowed to transfer the property by reviewing recent tax receipts and proof of payment for public utilities.

As the buyer, you will need to provide the notary with a copy of your identification, a recent utility bill showing your current address, and if applicable, your visa or documentation confirming your legal status in Mexico. The notary, in collaboration with the bank, will then finalize the documents required to establish the trust.

As the property purchase nears completion, several critical actions take place. First, the seller is responsible for paying any applicable taxes on the transaction. Next, at the notary's office, the property deed is officially signed over to the buyer. The buyer is then required to complete the payment for both the property and the notary's fees.

Upon completion of these transactions, the notary submits a copy of the deed to the Public Registry of Property. This registration is crucial as it ensures public disclosure, helping to prevent fraud and protect the legal ownership of the property. Once the final payment is made and the deed is registered, the title is officially transferred to the new owner or held in the bank trust.

At ForHouse, we are committed to guiding you through every step of the property purchasing process. Hiring a local lawyer can further streamline this process, offering you additional peace of mind. Our collaborative approach means that you don’t need to be present in the country for every transaction. With the support and expertise of our team, we ensure a smooth and secure experience as you navigate the complexities of buying property in Mexico.

No, you do not need to be a Mexican citizen to purchase property in Mexico. The process for foreigners buying real estate here is straightforward and has been refined over the years, attracting millions of international investors. Many of these investors have seen substantial returns on their investments. Importantly, you do not need to reside or have resident status in Mexico to own property, making it an accessible option for non-residents looking to invest in real estate.

When purchasing property in Mexico, it’s essential to be aware of the various taxes and fees that apply both during and after the acquisition process. Understanding these costs will help you budget effectively and avoid surprises.

Property Acquisition Tax: Upon purchasing real estate in Mexico, buyers are required to pay an acquisition tax, which varies by state but typically ranges from 2% to 4% of the property value. This tax is due at the time of purchase and is a one-time fee.

Notary Fees: In addition to the acquisition tax, buyers must also pay for notary services. Notary fees can range from 0.5% to 1.5% of the property value, depending on the complexity of the transaction and the notary chosen.

Total Closing Costs: Combining the acquisition tax and notary fees, along with possible additional administrative fees, the total closing costs usually amount to approximately 7% of the property's purchase price. This percentage serves as a general guideline and can vary based on specific circumstances and the location of the property.

Annual Property Tax (Predial): Property owners in Mexico are also subject to an annual property tax known as "Predial". This tax is relatively low compared to many other countries, usually amounting to around 0.1% of the assessed value of the property, assessed at local government levels.

Value Added Tax (IVA): Generally, residential properties are exempt from IVA (Value Added Tax), but if you purchase a new home from a developer, IVA at 16% may apply. This does not apply to resale homes.

Tax Benefits of a Fideicomiso: Owning property through a Fideicomiso (bank trust) can offer foreign investors specific tax advantages, such as potential deductions for property taxes and expenses related to the maintenance of the property when it is used for rental income purposes.

When purchasing property in Mexico, understanding the visa requirements is crucial, especially for foreign investors who may not be familiar with the local laws.

No Visa Requirement for Property Ownership: Importantly, Mexico does not require foreigners to obtain a specific visa to buy property. This means you can purchase property in Mexico even if you are not a resident. However, owning property does not automatically grant you residency status.

Temporary and Permanent Residency Visas: For those interested in spending significant time in Mexico or considering relocation, owning property can help qualify for either a Temporary Resident Visa or a Permanent Resident Visa. While property ownership is a favorable factor, the visa application will still be subject to meeting other requirements set by the Mexican government, such as financial solvency or family ties in Mexico.

Temporary Resident Visa: This visa is suitable for those who wish to stay in Mexico for more than 180 days but less than four years. It can be renewed annually for up to four years. Holding significant investments in Mexico, such as real estate, may facilitate the issuance of this visa.

Permanent Resident Visa: Suitable for those who plan to settle permanently in Mexico. Applicants typically need to demonstrate a continuous and regular source of income or substantial assets, and property ownership in Mexico can strengthen an application.

Tourist Visa: If you do not plan to reside in Mexico but wish to visit your property occasionally, a tourist visa will suffice. This visa allows you to stay in Mexico for up to 180 days.

Legal and Professional Advice Recommended: Due to the complexities involved and potential changes in immigration law, it is highly recommended to consult with an immigration lawyer or a professional advisor who specializes in Mexican visa applications to ensure compliance and to streamline your application process.