Advice on buying Mexico Property

You have found a Mexico property you wish to purchase what next?

Mexico Property Buyer's Guide explains the legal fees, legal procedures, purchase taxes and Mexico mortgage procedure.

Purchasing Mexico property

With snow capped volcanoes, ancient ruins, colonial towns lost in time, glitzy resorts, and deserted beaches the mix of ancient and modern is the key to Mexico's charm.

Buying property in Mexico can offer good value for money in comparison to prices in the USA or Europe. But the rule of Buyer beware applies here when purchasing in the more remote areas without the infrastructure of the more developed areas.

Mexican law allows foreign nationals to purchase land and property within Mexico; the Notary Public will guide you through these, but as a rule
1 Mexico Property may be bought and owned outright for residential use outside of the 100km restricted land border or outside the 50km coastal zone.

2 Within these zones foreign nationals may own property through a trust known as a fidecomiso which is set up through a bank and provides ownership of the property in all but name.

The Mexican Constitution previously banned foreign nationals from owning property within these restricted areas. (This old law was intended to protect Mexico from foreign invaders!)

As the constitution cannot be changed the government introduced this system of land trusts so that foreign nationals could invest in these restricted areas.

The trust will hold the deeds to the property and you name the sole beneficiaries to the trust and therefore the property. You have full rights to do whatever you want with the property as long as it is within the local planning regulations.

The trust enables you to name a beneficiary upon your death so therefore you do not need to have a Mexican will in order for your wishes with regard to the trust to be executed.

Historically most property transactions in Mexico are completed in cash. Now US and Mexican banks are beginning to offer mortgages for property purchase in Mexico. It is quite common for banks to advance between 80-90% of the purchase price, but beware interest rates vary between 11-14%. So any prospective purchaser would be advised to check out whether or not it would be more advantageous to arrange finance in their home country.

Obtaining a Mexican mortgage is more complicated than in the USA or Europe the reason being that should a borrower default. Foreclosure on the property is a lengthy and much more complicated process, so lenders take additional precautions.

Documentation required when applying for a mortgage
Aged between 18years -70 years
Proof of Income
Bank references and recent statements
Birth certificate and marriage certificate if applicable
Sale contract
Proof of deposit

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These guidelines are meant for guidance only and describe a straightforward purchase scenario. However this information is not meant to replace proper legal advice, which we always insist you take.

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