How to Buy & Own Property in Mexico as a US Citizen

You are a US citizen and plan to buy a house in Mexico, but is it possible for you to do so? The answer is yes! US citizens are allowed to buy property in Mexico.

However, there are some legal and practical considerations you should be aware of before making a purchase. This article will serve as a basic guide on how you can purchase a house in Mexico as a US citizen.

Fideicomiso: What Does This Term Mean?

Before we hop on to guide you on how to buy a property in Mexico as an American, we must understand the meaning behind this important term. A Fideicomiso is a trust that gives permits American citizens to purchase property in Mexico. This trust gives you all the rights that any common Mexican citizen has in terms of buying and selling property.

A Fideicomiso is one of the safest and legal ways to obtain legal ownership rights in Mexico. With this trust, you can buy, sell, build, or even rent out properties as you want. The trust lasts for about more than 50 years and can be renewed on expiration. Those who wish to own multiple properties can do so with the help of a single Fideicomiso. On the contrary, there are certain fees for buying this trust and then maintaining it every year. 

Steps to Follow When Buying a Property in Mexico as a US Citizen

Mexico is a great place to have a property. It has beautiful scenery, weather, and culture. There are a lot of real estate options for you to choose from. Follow these steps if you have already made up your mind to buy a property in Mexico;

Step 1: Find a Reliable Realtor

To start off, you need to find a real estate agent who is licensed and experienced to work with foreigners. Ideally, the real estate agent must help you out in dealing with all the legal aspects of buying a property in Mexico. Moreover, they must also advise you on the condition of the local market, property value, and several financing options available.

Step 2: Select a Location

Mexico is a diverse country with plenty of options to choose from. Every region is unique when it comes to culture, climate, and attractions. Think of what you prefer in a property. Real estate in Chelem Mexico is particularly booming these days and many Americans are showing particular interest in the region. This special region of the Yucatan Peninsula is popular for its affordability in the real estate sector. The recent interest of foreigners in this area has led to an increase in demand for vacation homes in Chelem.

Step 3: Look for a Mexican Attorney

Search and hire a Mexican attorney who particularly specializes in real estate laws and regulations. They must have complete knowledge about the tax implications of buying a property in Mexico. A Mexican attorney may especially come in handy when you wish to get a mortgage from a Mexican bank.

Minimizing the Risk of Acquisition

As a US citizen buying a property in Mexico, you need to pay attention to certain factors to avoid the risk of acquisition. Here are a few of these factors that you need to pay attention to

Doing a Thorough Title Search

Before finalizing a deal on any property, make sure you properly conduct a title search. The property seller must have the complete rights to sell the property. Also, make sure that there are no due debts or mortgages on the property owner.

Paying the Property Tax

Once you become a property owner in Mexico, you will have to pay property taxes as per the laws of Mexico. Even though these taxes are quite low in comparison to the USA, these can be higher in certain regions of the country.

Homeowner’s Association

There are certain properties in Mexico that are a part of the Homeowner’s Association (HOA). It is their responsibility to provide maintenance, security, and amenities to the property. If your property is a part of HOA then make sure that you review all the rules and fees before finalizing the offer.

Insurance

You must obtain property insurance as a means of protection for your investment. Your realtor or attorney can connect you with available insurance options that can provide you with optimum coverage at the best cost.

How to Send the Payment?

When it comes to paying off the amount to the property owner, having a Mexican bank account can make things easier for you. However, if you do not own one then look for banks with the best exchange rates. Majority of the property owners prefer a wire transfer of the complete or partial payment to their banks as these are completely secure. If the amount is less than $10K then you can even use wise.com as this platform offers the best exchange rate.

Tips When Looking for a Property in Mexico

  • If you are eyeing a tropical property to purchase, remember that such properties always require a lot of maintenance due to constant damage from the environment
  • You do not have to personally visit Mexico when shortlisting properties. You can easily scroll through Facebook to find some good options. However, it is advisable to have a look at the property personally before finalizing the purchase.
  • Always prioritize location over everything else. It is the number one factor that you must never compromise on.
  • Verify the identity of the seller, research the developer, and look up all the deeds on the property. These checks and balances ensure that you do not get scammed when making a purchase. 

Conclusion

Mexico is a great location for investment in property. There are plenty of foreigners who are cashing in on this opportunity. Many are purchasing houses simply because they plan to rent these out as vacation homes. 

Regardless of the purpose behind making the purchase, you can easily buy and own a property in Mexico even if you are an American. All you need to do is make yourself aware of all the local rules and regulations before buying any property.