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Congratulations! You have decided to purchase a home, or are thinking about buying one in Mexico. You'll be joining the ranks of hundreds of families who realize that home ownership offers a number of benefits including building equity, saving for the future, and creating an environment for your family.
Please contact me if you have any questions about buying a home in Playa del Carmen or elsewhere in Cancun and Riviera Maya.
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FAQ (frequently asked questions)
1. Can foreigners own property in Mexico?
Yes, foreigners can own property in Mexico.
2. What is the Restricted Zone?
The belt of 100 km along the border or 50 km along the coast is known as the Restricted Zone. Foreigners CAN acquire property here through a trust or a Mexican corporation.
3. What is a fideicomiso?
A Fideicomiso, is a trust acquired through a bank to obtain rights over a certain property.
4. What do I need to do to establish a fideicomiso?
All you do is choose a bank to be your representative or trustee. This bank will get a special permit from the Foreign Affairs Ministry for a certain property.
5. What legal rights do I have over the property through a fideicomiso?
You have all the legal rights that a normal ownership give you. You may sell the property, modify it, transfer it, build on it, lease it, mortgage it, etc.
6. What is the cost of the fideicomiso?
The bank charges an initial fee for the preliminary studies and drawing up of the agreement. This varies from bank to bank, but is an approximate of $24,000 pesos (around $2,600 usd). Then the bank charges a yearly fee, which is a percentage of the property value for the services as a trustee.
7. Can a foreigner own a business in Mexico?
As a foreigner, you may own a Mexican Corporation, who in turn will own the business.
8. How much are the closing costs?
The closing costs vary depending on the value of the property, but they are usually between 5-7% of the property value
9. Who pays for the closing costs?
The buyer does. The seller normally pays for the capital gain tax.
10. Who registers the title?
A Notary Public, who is a government appointed lawyer that acts on its behalf to insure the proper transfer of the property.
Mexican Company
It is relatively easy to form a Mexican Corporation. You can hire an attorney to do this for you, but Playa Realty can help you through every step of buying real estate in Mexico.
Until recently, foreigners had to have a Mexican partner in order to start a Mexican Company. Not anymore. Now Mexican Companies can have 100% foreign investment and ownership.
The difference with a "fideicomiso" is that a Mexican Company MUST be formed if you intend to make a business out of whatever property you buy. Then, the company will own the property, you will own the company.
Another instance in which a Mexican Company is used is for lots that are larger than 1,500m2. When you buy more land than this, you must commit investing a certain amount of money within the first year in order to get the Foreign Affairs Ministry permit. It is much easier to form a Mexican Company, where there are no limitations in this regard.
Then, you declare a "state of dormancy" when the company is completely inactive and you do not have to worry about tax declarations or the like. The costs for forming the company can be around $3,000 to $4,000 usd.
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