Can a us citizen own property in mexico?
Yes, with some restrictions. While Mexican citizens can purchase land without facing any real barriers. Foreigners experience some geographic barriers that might prevent some from buying in the most desirable areas.
If your residential property is 62 miles from a border or closer to the coast, you will need to purchase it through a Mexican bank. Although these can be formed and used, it is usually a lengthy process. Foreigners are generally encouraged to work with a lawyer or notary as they navigate their purchase.
Guide to Buying Property in Mexico
- Know the market. As a foreigner, you may notice that the prices of the homes you are looking for tend to rise out of the blue. In case you are not familiar with the prices around you, you could end up incurring much more money than the real value of your property.
- Get a referral. In Mexico, real estate agents are not required to be trained or licensed and can act independently of an agency. That means there’s no practical way to ensure you’re getting an agent who cares about your interests. If possible, it’s always a good idea to use your network to find a reliable agent.
- Meet the seller. While it’s fine to work with an agent, it’s crucial to meet and talk to the actual seller. It will help you confirm that they are indeed selling their property and whether they have the right to sell that specific property.
- Trust your gut. In case something seems wrong, then it probably is. You should trust your instincts and never make a purchase you are not sure about.
- Don’t send money. In the event that the seller is not ready or willing to transact face-to-face, it is probably a wise idea to walk away.
Property Taxes in Mexico
It can be quite difficult to determine exactly what level of fees you will pay due to looser regulations. However, here are a few good ones to keep in mind:
- Agent/agency fees. They are variable and can be negotiated
- Lawyer / notary fees. They are variable and can be taxed with 16% VAT.
- Registration fee and this can vary from .02 to 1.8%
- Acquisition tax, from .2% to 4.5%
- Title insurance, at about .5%
Ownership Issues in Mexico
Thanks to Mexican laws, it is possible to acquire property in Mexico, however, there are certain terms and conditions that determine the size of the property or the location to be acquired.
A clear example is the law of Restricted Zones, an area that extends 50 km inland from the beach and that is not authorized for sale to foreigners. However, outside this limit, as a foreigner you can acquire your real estate and be the legitimate owner of it, in accordance with Mexican law.
Likewise, we know that acquiring a property by the sea is a dream for foreigners, that is why, as an alternative to the Restricted Areas Law, it is possible to acquire your real estate through a Trust.