Foreigners Guide to Purchasing Property in Mexico

Mexico has surpassed China as the United States’ most important trading partner because of its closeness to U.S. markets, its advanced infrastructure, its access to ports for worldwide distribution, and its highly trained, well-educated workforce.

The U.S.’s greatest trading partner in 2019 was Mexico, with a total value of USD614.5 billion in bilateral commerce and USD144 billion in bilateral, reciprocal foreign direct investment. Mexico’s economy, at USD1.3 trillion, is the second-largest in Latin America and the 15th-largest in the world (FDI). In 27 of the 50 states in the US, it is the top or second export market.


The Mexican market is wide open for U.S. corporations

Some of our clients are investing in Mexico’s real estate to facilitate their country’s production and distribution networks, while others are looking to make Mexico their permanent or temporary home. In addition, a sizable portion of our clientele is investing in Mexico’s real estate market because they believe in its long-term potential.


A Glance at the Mexican Real Estate Market

The substantial and expanding middle class in Mexico, along with the country’s recent and ongoing infrastructural developments, offers promising prospects for financial backers. The cheap cost of living and tax rates, along with the current appreciation of the U.S. dollar against the peso, make Mexican real estate a great investment for retirees and tourists.

In locations preferred by ex-pats, the cost of luxury real estate in Mexico City is far lower than in other global metropolises, and the quality of infrastructure and services is excellent. Similar trends may be seen in the real estate markets of popular Mexican resort areas including the Riviera Maya, Mazatlán, and Los Cabos.

Naturally, reduced loan rates are also contributing to the expansion of the market by increasing liquidity and opening up new options for purchasers.


The Real Estate Regulatory System to Buy Or Sell Property in Mexico

In some “restricted zones,” foreigners can only buy property by setting up a bank trust or incorporating a Mexican company, even though most of the old mechanisms have been dismantled. Land within 50 kilometers of Mexico’s coastlines or beaches and within 100 kilometers of its borders is off-limits to international buyers. It is feasible to buy property in certain zones, but only through a bank trust or a Mexican business, as we’ve discussed before.

Though the system is quite safe, many foreigners are put off by the fact that it depends on the trustworthiness of Mexico’s banking system and property register administration, which is why the trust account known as a fideicomiso is permitted by the Ministry of Foreign Affairs.

While the trustee remains the official owner of the property, the beneficiary keeps all ownership rights and is free to sell, lease, mortgage, or otherwise distribute the asset as they see fit. Trusted assets are not bank property.

It is essential to perform a title search when buying real estate in Mexico (or anywhere else), since this will reveal the property’s chain of ownership and ensure that it is free and clear of any liens or encumbrances.

Lastly, the importance of Notaries Public in the closure of a transaction cannot be overstated. In Mexico, a property transfer must be certified and formalized in front of a Notary Public, who serves as both a certifier and an attestor under the law. To prove ownership to outside parties, owners must get a Property Deed issued by a Notary Public and recorded at the Public Property Registry.


Added Factors

Besides checking the property’s title, real estate transactions require careful completion and collection of all necessary papers. The effort you put in now will pay off in the future if and when you decide to sell.

Even though it probably goes without saying, I will say it anyway: knowing Spanish can help you immensely while navigating the real estate acquisition process, especially when interacting with government organizations and service providers. The reality of this is magnified in places with fewer people. The best thing to do if you don’t know Spanish is to ask a buddy or a reliable coworker who does. It usually takes between eight and twelve months to close a deal, in my experience.


Accurate Representation by Qualified Experts

Just like I would for any sizable investment, you should seek out professional legal representation to have on your side during the buying process. If your whole retirement fund is at stake, as is common in such deals, this becomes much more crucial.

When conducting business with firms and individuals that are functioning inside their home cultures and legal systems, you will need a reliable advisor who can assist you negotiate Mexico’s legal system, tax code, and bureaucracy, as well as provide advice on local contexts.

When it comes to real estate transactions, for instance, we not only handle the legal elements, but also put our customers in touch with the best local realtors, mortgage lenders, and architects through our extensive professional network. We also help clients with the Mexican government’s red tape, ensuring a smooth transaction with a Mexican Notary Public and a clean title registration.

There is no reason to expect a sudden shift in the attractiveness of Mexico’s real estate market. Buying or selling property in Mexico is a desirable investment for many types of buyers, including business professionals, retirees, and tourists.


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