Preparing to buy real estate in Mexico includes finding answers to questions such as how to buy real estate in Cancun as a foreigner, what taxes will be paid, what documents are required, and how the transaction process works.
Rules for buying real estate as a foreigner
When purchasing a property under construction, the procedure is different. A contract is signed. The property is built. After the property is completed, a trust is established, and the notary signs the transaction.
For foreigners, the documentation package is minimal. No documentation proving the origin of the funds is required.
To buy real estate in Mexico as a foreigner within 50 km of the coast and 100 km of the border, a fideicomiso (bank trust) is established. The Mexican bank guarantees the transaction, but all rights of ownership, sale, lease, and inheritance belong to the investor. This is a completely legal and secure form of ownership, which has been in effect for many years. Step-by-step procedure for purchasing real estate in Mexico: 1. Selecting a property. Decide on the purpose: investment, relocation, rental, or vacation. 2. Checking the legal status. A licensed realtor (in Spanish, "broker") and a notary check the property's registration and ensure it is free of encumbrances and debts. 3. Reservation. A deposit is paid to reserve the property. 4. Execution of a fideicomiso. The bank sets up a trust in the buyer's name, securing their ownership rights. 5. Purchase and sale agreement. The document is drawn up in Spanish and notarized. 6. Payment and signing. The buyer transfers funds, the notary registers the transaction, and you receive the property. 7. Registration of the transaction in the state property registry (Registro Público de la Propiedad).
Closing Costs and Taxes When Buying a Property in Mexico
The above taxes and notary fees total approximately 7% of the purchase price. The costs for taxes, fees, and notary services are the same for Mexicans and foreigners.
The only difference between the costs for foreigners and Mexican citizens is the amount of the fideicomiso trust. Upon purchase, the one-time payment is approximately $2,200 (state fees, bank services, and the first year's fee), followed by annual maintenance fees of approximately $522.
In the state of Quintana Roo, property acquisition taxes are 3.3% of the purchase price.
When signing the title deed, called an Escritura here and a Title in the US, the buyer also pays notary fees, registration fees, and an appraisal by a tax professional.
The above taxes and notary fees total approximately 7% of the purchase price. The costs for taxes, fees, and notary services are the same for Mexicans and foreigners.
Transaction Participants
Important: For a secure transaction, it is recommended to work with a licensed realtor who is well-versed in local laws and procedures.
In Mexico, a realtor is called a "broker" or "asesor inmobiliario" A license in Spanish is called a "matricula." Realtors licensed in the state of Quintana Roo are listed on the SEDETUS website.
The realtor's fees are paid by the seller or developer.
In Mexico, a lawyer is not a mandatory party to a transaction; their functions are performed by a notary and a realtor. The notary is responsible for the legal integrity and registration of the transaction, while the realtor accompanies the client through all stages, from selecting a property to signing the contract.
Is it possible to buy real estate in Mexico remotely?
Yes, of course. Many people do this. It saves you time and money. We select a property online, watch presentations and videos from the site. The contract is signed electronically. If you are purchasing a property under construction, you can come and pick it up when it is ready. To sign the final document at the notary's office, you must either come in person or send a power of attorney.
