Many Americans and Canadians decide to invest in Mexico real estate to secure their retirement money, pay less taxes and enjoy a more affordable lifestyle abroad. However, many come with an array of questions concerning the Mexico real estate purchasing process. Some will also wonder about their residency status, visa requirements and other needs. Here is a brief breakdown of the most frequently asked questions about buying real estate in Mexico to help you with your decision.
Can foreigners purchase Mexico real estate?
Yes. Any nationality can purchase real estate in Mexico. Depending on what area you select to purchase in, there could be certain stipulations and/or added procedures you will need to abide by. When thinking of buying property in the Riviera Maya – or any coast – you need to do research about the restricted zones and the process of obtaining a bank trust.
Can foreigners hold title to property purchased in Mexico?
There are several ways to hold title in Mexico depending on location. Foreigners can hold title in a non-restricted zone. If they purchase property within 100km of any border or 50km of any coast, a bank trust or Mexican corporation needs to be set up. These will hold title for you but have no power over the property itself.
Is it safe for foreigners to purchase Mexico real estate?
Yes. It is very safe to own property in Mexico as a foreigner, as long as you purchase legally. If you follow all the procedures advised by your real estate agent you will be fine. It is highly advised to hire a lawyer to make sure all of Mexico’s real estate laws are followed through and you acquire a clear title.
Once I purchase property in Mexico, will it help in the process to get citizenship and/or a work visa?
When you purchase property in Mexico, it will help expedite citizenship or residency much quicker. There is an income standard that the government requires you to meet to get residency. The ownership of property can go towards that standard. The work visa is a different procedure, but once you obtain residency or citizenship, you can work. We recommend you hire a good lawyer to make sure the paperwork is error-free and submitted correctly.
What are the basic steps of buying Mexico real estate?
After finding the property you want to buy, there are four basic steps to the purchasing process:
- The offer to purchase
- The promissory contract
- The purchase and sales contract
- The closing and title transfer
What are the buyer’s estimated closing costs?
Typically, in Mexico, the buyer will cover the closing costs and the seller will pay the capital gains tax and commissions. As a general rule of thumb, the closing costs come to about 4 to 7% of the purchase price. While these are higher than in the USA or Canada, the annual expenses and property taxes are much lower and eventually off-set the higher closing cost.
How can I finance my Mexico property?
Most real estate transactions are cash deals. If you are looking to finance your investment, your best option is to find financing in your home country. You can take equity out of your home or other tangible assets. Some sellers will do partial financing (especially developers with pre-construction projects) with a substantial down payment. However, they usually charge a higher interest rate for a shorter period of time. In Mexico there are a couple of associations that offer financing for foreigners. However, they tend to be pricier and are often just a last resort to finding financing.
Who are the key players when purchasing a property in Mexico?
There are key individuals that take part in the purchase-sale transaction. You will need a reputable local real estate agent, an attorney and an authorized Notary. It is your free will to involve as many other parties as you feel necessary.
We hope these simple questions and answers help you on your process to buy your dream home in Mexico. If you have any further questions or concerns, feel free to contact us or check out our detailed FAQs. At Top Mexico Real Estate, we pride ourselves in offering the best service for those who are searching for their paradise home in the Riviera Maya or Mexico in general. Owning a home in Mexico is much easier than you think.
And remember, at Top Mexico Real Estate…we make it happen!