Answers To The 10 Most Frequently Asked Questions Foreigners Have When Planning To Buy Mexican Real Estate


1. Is it safe to buy real estate in Mexico?

Yes, it is safe, but it is crucial to use the representation of a real estate advisor and a real estate closing attorney to ensure you fulfill the proper steps and receive the title on the property. The attorney performs a complete title search, including the chain of ownership to ensure this seller has the right or legal representation to sell, and that no others are waiting to take possession of the property. This search will also reveal any taxes owed or liens on the property before the property is paid for.

2. Can a foreigner buy beachfront property in Mexico?

Yes, property within 50 kilometers of any coast, or 100 kilometers of the border is considered the restricted zone, foreigners can purchase property in the restricted area through a fideicomiso (Bank Trust)

3. What is a Fideicomiso?

A fideicomiso means the property is held in a bank trust with you as the beneficiary. The fideicomiso is a secure way to own property in Mexico; you have full authority over your property with the same rights you would have under a free title real estate ownership.  

4. Is the Fideicomiso Just a Lease?

The fideicomiso is not a lease; although it is held in 50-year terms, the trust is renewable by you at any time or it can be extinguished if needed. This property is not considered part of the bank’s assets, you are the full owner of the real estate property.

5. Are There Fees Involved with a Fideicomiso?

Yes, The fideicomiso is subject to a setup fee and a nominal annual trust fee, set up fees and annual fees vary depending on the bank and the location and value of the property. The normal closing cost involved in a real estate purchase is around 4.5 to 5 percent including the 2 percent municipal acquisition tax.

6. How can I buy in a restricted zone without a Fideicomiso?

As a foreigner, you may set up a Mexican corporation, and buy real estate in a restricted zone through the corporation. Or by becoming a Mexican Citizen, you may purchase restricted property without a fideicomiso. (The process of “Naturalization” or “Citizenship” is an option for foreigners who demonstrate legal residence in Mexico for five consecutive years minimum prior to the application date).

If the property is outside the restricted zone, foreigners may legally purchase property without the need of a fideicomiso.

7. Why do I need a Real Estate advisor and a closing Attorney?

Hiring a real estate advisor and a closing attorney is the recommended way to guide you through the process and to guarantee that you receive the title on the property, real estate attorneys will provide a quote of expenses (Closing costs), and guide you through the purchase process, from reviewing your offer, to purchase, to closing the deal, including title insurance of your property if needed.

An attorney will ensure there are no errors during the Property Registration and provide proof your name is on the deed in the Public Registry Office. If your property is not registered, you will not have the title or legal ownership of the property.

8. What Function does a Notario Publico (Public Notary) Serve?

The Notario Publico is a government-appointed attorney responsible for the purchase process transaction and registering of real estate deeds with the Public Registry Office. Although the Notario is a lawyer, they do not act as your lawyer in this case, as they are representing the buyer, seller, and the state at the same time.

9. Will my property have Title?

Yes, you will get a title or trust provided that it was a legal purchase and you have an attorney that guarantees title on your investment.  

10.  Can the Mexican Government Take my Property?

No, one of the advantages of hiring a real estate advisor and a real estate attorney you will ensure the proper legal purchase process, which should include the chain of ownership to ensure the seller has the legal right to sell the property, and no one has a claim against the property. The search will also reveal any taxes owed or liens on the property. Once you have the title and get registered as the new owner at the Property Registration Office, no one can take the property away from you.

Under the North American Free Trade Agreement (NAFTA) Mexico may not expropriate land except for a public purpose such as building a road. This same act exists in most countries including the US and Canada.

Sergio Gutierrez, Keller Williams Cabo Paradise MX CEL +52 624 125 6085 MX TEL +52 624 104 0236