Can I own property legally in Mexico? The answer to that question is yes, absolutely. Otherwise, I wouldn't be down here, right?
We live in what's called the restricted zone. I'm going to throw a chart up here so you can see where the restricted zone is located.
If you were to own property outside of the restricted zone, you could own Mexican fee simple. You just have a simple deed that's registered in the city registry. But we do live in the restricted zone, and 99% of our clients own property through what's called a fideicomiso.
A fideicomiso is essentially a real estate bank trust, very similar to a trust in the United States. If you have a family trust in the States, you have a trustee or a fiduciary. In this case, it would be a bank that's authorized to do business in Mexico—BBVA, Bancomer, Santander, Banorte, just to name a few.
These banks are authorized to do business in Mexico, and one of their divisions acts as trustee for a fideicomiso. The bank acts as the trustee; you are the beneficiary. You will name an heir or a secondary beneficiary in the case of your death. You will name an heir during your closing process, and the bank then knows who the rightful owner of the property would be in the unfortunate case of your death. We have to present a death certificate to the bank, and simply notify them, and then the property transfers to your heirs.
The trust looks like this. It's a big document, all in Spanish, and it also includes your deed. The deed contains what's called an inscription number. You can take that inscription number, look it up on a government website called *ekerstone.gov.mx*, type it in, and it will pull up the information: who your trustee bank is, your name as the beneficiary, your property tax ID number, and any other pertinent details such as when you closed and when it was transferred. This is good, useful information that lets you confirm if your deed is in good order.
The trust lays out all of the rights and responsibilities that you have, very similar to those of a Mexican citizen. You have the right to own, the right to sell, the right to rent, the right to make modifications, and the right to gift the property to your heirs. If you don’t want to gift it, or if you’ve been here for many years, you can always sell the property.
The trust is valid for 50 years and is renewable for another 50. There will be a fee for that, but no trust has yet reached the 50-year mark, so we don’t know what those fees will be. The trust also contains the history of the property, the floor plans, and information about the developer. Essentially, it’s a record of the property’s history. It also includes your beneficiary information, your address, and all the necessary details to identify the rightful owner of the property.
Currently, it’s taking about 90 days to close on a property. I also have another webcast with one of our premier attorneys, Jorge Valdez. Take a look at my interview with him—he gives some really good information about the process and why it’s taking so long to close on property.
As for closing costs: they typically range between 3 and 6% of the purchase price, depending on the transaction. These costs include the notario fees, attorney fees, closing coordinator fees, deed registration, and some minor fees such as blueprint fees. They also pull what’s called a certificate of no lien, which confirms the property is clean and free of encumbrances. You’ll get a stamped form from the public registry showing that it is free and clear.
One of the largest closing costs is the 2% transfer tax, which is included in that 3–6%. It’s 2% of the purchase price. Property taxes in Mexico are extremely low compared to places like San Diego or the East Coast of the United States. For example, property taxes for an oceanfront home here are around $200 a year. Because taxes are so low, the government collects more upfront through the transfer tax.
So be prepared to pay 3–6% of the purchase price at closing. It’s on a sliding scale—the higher the purchase price, the lower the percentage. On a $600,000 property, closing costs are about 3%. If you’re buying a $50,000 lot, closing costs could be closer to 11%.
That’s the general information you need to know about fideicomisos and how to legally own property in Mexico.
My partner Sandy and I are always available to answer your questions. Visit our website at **rockypointkyle.com**, and click on the “Information & Newsletters” tab. There, you’ll find detailed guides, floor plans for different resorts, and Q&A that will help you decide whether to buy here in Rocky Point.
Thank you so much for visiting with us. We hope to see you soon. Please reach out.
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