Key Takeaways

Property Ownership in Restricted Zones

Foreigners can own property in Mexico’s restricted zones—land within 100 kilometers of borders and 50 kilometers of coastlines—by using a fideicomiso, a bank trust that holds the legal title on their behalf. This system was created to comply with Mexican laws while allowing foreigners the rights to use, rent, or sell the property.

Work with Professionals

Collaborating with certified real estate agents and local legal advisors is crucial. They can help you navigate the complexities of the Mexican real estate market, from understanding local zoning laws to verifying property titles.

Due Diligence

Thorough due diligence is essential when buying property in Mexico. This includes verifying the property title with a notary public, understanding local zoning laws, checking for any outstanding debts or liens, and being aware of financial obligations like capital gains taxes. Avoiding ejido land—communal land that cannot be privately owned without going through complex legal processes—is also critical.

Navigating the Fideicomiso System

A fideicomiso is renewable every 50 years and can be transferred to another foreign buyer, making it a practical solution for those looking to own a second home or relocate to Mexico. Although there are setup and maintenance costs, it remains the safest method for foreign property ownership in restricted zones.

Avoiding Scams and Fraud

Unfortunately, scams and fraud do occur in the Mexican real estate market. To protect yourself, always conduct thorough due diligence, work with reputable agents, avoid high-pressure sales tactics, and insist on seeing the property in person or through a virtual tour. A cautious and well-informed approach will help you avoid common pitfalls.

Financial Considerations

Understanding financial aspects such as capital gains tax, property taxes, acquisition tax, and closing costs is vital for a successful transaction. Engaging a local accountant or financial advisor can help you navigate these obligations and plan accordingly.

Local Market Conditions and Infrastructure

Researching local market conditions is important, as property values vary significantly across Mexico. Infrastructure projects like highways, airports, and rail lines can greatly impact property values and accessibility, making them key factors in your investment decision.