Owning property in Mexico as a Foreigner

 

Buying property in Puerto Peñasco, Mexico, as a foreigner is straightforward but involves specific legal steps. Here’s what you need to know:

 

1. Fideicomiso (Bank Trust) or Mexican Corporation Mexico Restricted Zone

  • Foreigners cannot own property directly within 50 km (31 miles) of the coast or 100 km (62 miles) of the border. Instead, they must use a Fideicomiso (bank trust) or form a Mexican corporation.
  • A Fideicomiso is the most common option for residential buyers. A Mexican bank holds the title, but you have full ownership rights, including selling, leasing, or passing it to heirs.
  • A Mexican corporation is used if you plan to run a business on the property.

2. Find a Trusted Real Estate Agent

  • Work with a reputable agent experienced in Puerto Peñasco’s real estate market. They can guide you through the legal process and ensure a secure transaction.

3. Make an Offer & Sign a Purchase Agreement

  • Once you find a property, your agent will help you negotiate the terms and sign a legally binding Offer to Purchaseor Sales Agreement.

4. Set Up a Fideicomiso

  • If you’re using a Fideicomiso, the bank will handle the trust setup. This usually takes 4-6 weeks and involves a one-time setup fee plus annual maintenance costs.

5. Due Diligence & Notary Public

  • A Mexican Notary Public (Notario Público) ensures the property is clear of liens and verifies legal ownership.
  • A title search and property appraisal may also be done during this stage.

6. Closing & Property Taxes

  • Finalize the transaction at the notary’s office, pay closing costs (which can range from 5-7% of the property price), and get the escritura pública (official deed).
  • Pay annual property taxes, which are relatively low compared to the U.S.

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