Buying property in Mexico as a foreigner is an exciting opportunity, whether you’re looking
for a vacation home, an investment property, or a place to retire. However, understanding
the legal framework is essential to ensure a safe and successful transaction. This guide
will walk you through the process, including the fideicomiso (bank trust) system required
for non-Mexicans, financing options, escrow services, and how Life in México Realty.com
can help protect your investment.
Can Americans & Canadians Buy Property in Mexico?
Yes, they can legally purchase property in Mexico, including beachfront and restricted
zone properties (within 50 km of the coast and 100 km of the border). However, buying
property in these restricted zones requires the use of a fideicomiso, or bank trust, as
mandated by Mexican law.
What is a Fideicomiso (Bank Trust)?
A fideicomiso is a trust agreement set up with a Mexican bank that holds the legal title
to the property on behalf of the foreign buyer. The buyer retains full ownership rights and
control over the property, including the ability to sell, lease, renovate, or bequeath it.
Key Features of a Fideicomiso:
– Established for 50 years and renewable indefinitely.
– The foreign buyer is the beneficiary of the trust.
– The bank holds the legal title but has no ownership interest, it helps protect any
changes.
– The beneficiary has full rights to use, rent, sell, or inherit the property with a Will or
Family Trust.
Steps to Buying Property in Mexico as a Foreigner
Call LIFE IN MEXICO REALTY.COM, they will help you find a more appropriate property
and will guide you through the process to make an offer and get legal immigration status in
México.
Once you find a property that suits your needs, you will make an offer and sign
a promissory agreement (Contrato de Promesa de Compra-Venta) outlining the terms and
payments.
You will have the opportunity to check all the Legal Due Diligences
Before proceeding, it is crucial to verify:
– That the property has a clear title (no liens or encumbrances).
– That the seller is the legitimate owner.
– That there are no outstanding debts (property taxes, utilities, etc.).
Our team at LIFE IN MEXICO REALTY.COM will ensures that the property is legit and
ready to be transferred to you, making sure to protect buyers from fraud and legal risks.
Set Up the Bank Trust (FIDEICOMISO) on your name(s)
If the property is in a restricted zone, you will need to establish a fideicomiso with a
Mexican bank. The bank acts as a trustee, holding the title while you retain full control of
the property, this legal procedure protects your investment.
At LIFE IN MEXICO REALTY.COM We handle all the legal procedures, including selecting
a reputable bank and setting up the trust efficiently.
Financing Options for Foreigners
Mortgage financing for foreigners in Mexico is limited, however there are several financing
options available, like: MOXI a Personal Financial lender that Finance from 65 to 80% of
the Property value directly to American Citizens, and with SEAPORT Financing for
Canadian Citizens through their Retirement Funds accounts transfer options, (the age is
important in this financing option)
– Developer Financing – Some new developments offer financing plans directly to foreign
buyers, that can be up to 6 to 12 months direct financing.
– Mexican Bank Mortgages – Some banks offer mortgages to foreigners, though they
require a significant down payment (typically 30-50%) and proof of income, the APR’s
could be higher than back at home.
– Paisano Program – Some lenders specialize in financing international real estate
purchases, to Citizens of the USA that also have a Mexican Citizenship, with the Paisano
Program, and local Banks that finance in Pesos, considered a greater benefit to dual
Citizens.
– Home equity loans from the USA or Canada – Many buyers, obtain a home equity
loan from their home country property to finance their Mexican purchase and pay in cash.
How LIFE IN MEXICO REALTY.COM can help! We have a team of professionals that will
review your possibilities and paperwork, we work directly with financial corporations and
banks, to find the best options for you.
Secure Escrow Services
Unlike USA or Canada, escrow is not mandatory in Mexico, but it is strongly recommended
to ensure a safe transaction. Escrow services hold funds until all legal and financial
conditions are met, we will give you options to ensure a smooth transaction, at LIFE IN
MEXICO REALTY.COM we currently work with corporations like MLS VALLARTA, TLA,
MEX LAW and other legal Escrow options.
To start your purchase, an ESCROW account will be opened and 10% of the purchase
price needs to be deposited, as well as the ESCROW processing fee that ranges between
600 to 800 USD in Average. The buyer pays the Closing Fee that in México could be a
little bit higher than in the US or Canada, however the annual Property Taxes in México
are very low.
LIFE IN MEXICO REALTY will give you options to ensure your funds are protected
throughout the transaction.
Sign your purchase agreement (Promesa de Compra-Venta)
Once due diligence is complete, the final Escritura Pública (public deed) is prepared and
signed in front of a notario público, a government-appointed official who ensures legal
compliance.
Your contract will be prepared by a Real Estate Lawyer that works with the Notary to
ensure transparency, fairness, and compliance with Mexican real estate laws.
Pay Closing Costs and Fees
Closing costs in Mexico typically range between 6 to 10% of the property price (averaging
8%) and may include:
– Transfer tax
– Notary fees
– Registration fees
– Legal and bank fees for your Trust (fideicomiso)
– Escrow and financing fees (if applicable)
Registering the Property
After signing, the property must be registered with the local Registro Público de la
Propiedad (Public Registry of Property) to finalize ownership rights, it takes a few days.
We will maintain you informed of all post-purchase registrations process by LIFE IN
MEXICO REALTY and can be also checked with the legal Notary Office as well, to ensure
your property rights are fully protected.
MLS VALLARTA, TLA, MEX LAW and other legal Escrow options, are third party
corporations that don’t belong or represent LIFE IN MEXICO REALTY.COM, this
companies have a long-term reputation, that LIFE IN MEXICO REALTY associate with for
Escrow Services, in certain occasions different purchase agreements are made when the
Developers are financing directly to the buyer.
LIFE IN MEXICO REALTY is Located at Avenida México #574 Interior 45 at Nuevo
Nayarit, Jarretaderas, Nayarit. México. P.C 63735 Telephone 011-52-322-209-5661 and
email: info@lifeinmexicorealty.com
