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If you’ve ever thought about owning a house or condo in Mexico, you’re not alone. Many people from around the world are interested in buying property there for vacations, retirement, or investment. Yes, foreigners can own property in Mexico, but special rules apply depending on where the property is located.
There are some areas in Mexico, known as restricted zones, where you must use a special bank trust called a fideicomiso if you want to own land as a foreigner in Mexico. These zones usually include land within 50 kilometers of the coast and 100 kilometers of international borders. Outside of these areas, foreigners can directly own property and follow a process similar to what Mexican citizens do.
Understanding these rules and the steps involved can help you avoid surprises and make the buying process smoother. It’s important to know the legal requirements and be aware of the possible costs and responsibilities that come with owning property in another country.
Key Takeaways
- Foreigners can own property in Mexico, but the process depends on the location.
- Some areas require a bank trust called a fideicomiso for foreign buyers.
- Knowing the legal steps and costs can help you avoid problems.
Legal Framework for Foreign Property Ownership
Mexico allows foreigners to own property but has special laws that control some areas and ways of buying land. The most important laws cover where you can buy, how you can own land, and what steps you must follow.
Mexican Constitution and Property Laws
Foreign property ownership in Mexico is regulated by Article 27 of the Mexican Constitution. This law sets clear rules on what land foreigners can own and what methods are allowed.
You may own land anywhere in Mexico that is not in a restricted zone. However, you are not allowed to buy land that is set aside as ejido or communal property, which is usually meant for local communities and cannot be owned privately. To legally own land, you must follow Mexican property laws, which sometimes include using specific kinds of trusts or companies if you buy near the borders or beaches.
If you start a company in Mexico, it can own land on your behalf in most cases, as long as it follows Mexican business laws.
Restricted Zones Explained
The “restricted zone” includes any land within 50 kilometers (about 31 miles) of the coastline and 100 kilometers (about 62 miles) of Mexico’s international borders. Foreigners cannot buy property outright in these areas. This rule is in place to protect national interests.
If you want to live or invest in beach towns or border cities, you cannot directly own the land as a foreigner. Instead, you must use a special arrangement to manage your rights. Land that is not in the restricted zone may be owned directly. You also cannot buy ejido land, but you might be able to lease it for certain uses as long as you do not take full ownership.
Learn more about the restricted zone rules on the Mexican Consulate’s guide to acquisition of properties.
Direct Ownership vs. Fideicomiso
If you want to own property outside the restricted zone, you can hold the title in your own name and enjoy full ownership rights. This means you can sell, rent, or pass down the property as you want.
Inside the restricted zone, you must use a fideicomiso, or bank trust. With a fideicomiso, a Mexican bank holds the property title for you. You are still the owner for practical purposes and can improve, use, sell, or leave the property to your heirs. The fideicomiso is set up for 50 years and can be renewed in perpetuity. The cost of a Fideicomiso is around $500 USD a year.
Read more about how fideicomiso works and how it helps foreigners buy property in coastal areas in our COMPLETE Mexico Relocation Guide– which also gives you a directory of our recommended real estate lawyers in Mexico.
Hidden Costs & Fees to Keep in Mind
When budgeting to buy property as an expat in Mexico, you might encounter unexpected costs beyond the standard fees.
For example, currency exchange fees from traditional banks can be higher than using online transfer services like Wise. Additionally, unforeseen delays in closing the sale could result in extra travel or accommodation expenses.
It’s also important to note that annual fideicomiso fees can vary widely between different Mexican banks. To avoid surprises, you should budget an extra 10–15% on top of your planned expenses to cover these hidden or unexpected costs.
Acquisition Process for Foreigners
Buying property in Mexico as a foreigner is possible if you follow the legal requirements and complete each step carefully. It is important to understand that foreigners may face some restrictions in certain areas.
Steps to Purchase Property as an Expat in Mexico
You need to follow specific steps to buy property in Mexico. First, find a property and agree on a price with the seller. If the property is in a restricted zone (within 50 km of the coast or 100 km of borders), you must buy through a bank trust, known as a fideicomiso. This allows you to hold the rights to use and sell the property.
After agreeing on the terms, sign a purchase agreement and pay a deposit.
Next, you apply for all required permits, like the SRE permit, which is needed for most foreigners to buy real estate in Mexico. The notary public (Notario) will check the documents, handle taxes, and draw up the official sale documents. Once everything is approved, you sign the final contract at the notary’s office and pay the remaining balance. You then receive the legal title to the property.
Selecting a Real Estate Agent
Choosing the right real estate agent is one of the most important decisions you will make. Look for agents with experience working with international buyers. A good agent helps you find properties, explain the process, and communicate with all parties.
Make sure your agent is registered with a professional organization such as AMPI, as there is no federal licensing in Mexico for real estate agents. Ask for client references and check their local reputation by doing a google search or a Facebook search. A good and reputable realtor should have an online presence.
A qualified agent will guide you through local regulations, help with paperwork, and explain fees and taxes. This support is key to avoiding mistakes.
To get access to our complete directory of vetted and recommended realtors across Mexico, consider buying our COMPLETE Mexico Relocation Guide. When you buy the guide, you get instant access to the steps for moving to Mexico and our directory of vetted contacts. And we NEVER take a kickback or commissions from our recommended contacts.
Due Diligence Responsibilities
Due diligence is your responsibility when buying property in Mexico. You must check the legal status of the property to ensure there are no debts or claims. Request an up-to-date title deed and have a notary public review it to confirm the seller is the legal owner.
Check for unpaid property taxes, liens, or restrictions. Make sure all permits are in place if you plan to build or remodel. It’s important to visit the property in person and get an independent appraisal. Using a trusted lawyer and a notario helps you understand your rights and avoid problems.
Understanding Fideicomiso Trust
A Fideicomiso is a legal way for non-Mexican citizens to buy and own property in coastal and border areas of Mexico. This structure gives you control and use of the property while meeting Mexican law.
How the Trust Structure Works
Mexico’s constitution does not allow foreigners to own land directly within 100 kilometers of the borders or 50 kilometers of the coast. To solve this, you can set up a Fideicomiso, or Mexican property trust. In this setup, you are the beneficiary of the trust, while a Mexican bank acts as the trustee.
Key points:
- You can use, rent, sell, or build on the property.
- The trust usually lasts 50 years and can be renewed.
- You may list heirs or beneficiaries so the trust can be inherited.
- The cost varies depending on which bank issues it. But it is common to pay around $500 USD/Year
The Fideicomiso is not a lease. The trust lets you enjoy almost all rights of ownership. This process is common and recognized by Mexican law.
Role of Mexican Banks in Fideicomiso
A Mexican bank, called a “fiduciario,” handles the trust on your behalf. The bank holds legal title to the property but must follow your instructions as the beneficiary. The bank cannot use or sell your property without your written consent.
Main roles of the bank include:
- Managing all paperwork for the trust
- Ensuring compliance with Mexican property laws
- Protecting your rights as the trust beneficiary
You pay the bank an annual fee for these services. The bank’s job is mostly administrative—the day-to-day use, renovations, and profits from selling or leasing are all under your control.
Ownership Restrictions and Limitations
Mexico allows foreign individuals to own property, but some important rules and boundaries exist. Where the property is located and how you intend to use the land are key factors that determine your rights as a foreign buyer.
Location-Based Restrictions
Mexican law limits direct foreign ownership of land in certain areas. The “restricted zone” is any land within 50 kilometers (about 31 miles) of the coast or 100 kilometers (about 62 miles) of an international border. In these areas, you cannot legally own the property outright.
Instead, you must use a bank trust called a fideicomiso or set up a Mexican corporation, depending on how you will use the property. The fideicomiso lets you hold the property in a Mexican bank’s name, but you control it. This trust lasts for 50 years.
If you’re looking to buy outside the restricted zone, you can hold the property directly in your name, just like a Mexican citizen. There are no special tools or trusts needed for those transactions. These location-based rules apply to both homes and land.
Land Use Considerations
The kind of property and your intended use also matter. If you want to use the property for residential purposes in the restricted zone, you must use the fideicomiso. Using a Mexican corporation is not permitted for personal residential use in these areas. Corporations can own restricted zone property, but only for commercial, not personal use.
There are also rules about agricultural and ejido land. Foreigners usually cannot own these types of land directly, since they are intended for specific social and community uses. Always check local zoning and land use laws before making a purchase to ensure your plans match what is allowed for the property. This will prevent complications with local authorities and future ownership issues.
Costs and Taxes Associated With Buying Property
When you buy property in Mexico, you will need to pay various fees up front and take care of annual property taxes after the purchase. Knowing these costs ahead of time helps you avoid surprises and budget properly.
Purchase Costs and Fees
You pay a series of one-time fees when you purchase property. The most significant is the Property Acquisition Tax, which is usually about 2% to 4.5% of the property’s value. This fee is paid to the local government at closing.
Other acquisition costs include notary fees, legal fees, and document registration charges. Notary fees often range from 0.5% to 1.5% of the property’s value. You also need to pay for permits, trust setup (if buying in the restricted zone), and valuation fees.
A typical list of expenses:
- Acquisition tax: 2%-4.5% of value
- Notary fees: 0.5%-1.5%
- Trust setup (if required): $500-$2,000 USD
- Legal fees
- Permit and registration fees
The total closing costs are often 5%-7% of the purchase price. Some costs may vary by region.
Ongoing Property Taxes
After you buy, you will pay annual property taxes called predial. These are based on the assessed value of your property and are much lower than in many other countries. Most owners pay between 0.1% and 0.3% of the assessed value each year.
You receive a bill from the local municipality, and payment is required yearly. Discounts may be given if you pay early or online.
If you own a property in a Mexican trust (testamento), there will also be annual bank trust fees. These are usually $400-$700 USD per year.
Failure to pay your property taxes or trust fees can lead to penalties or legal trouble, so it is important to stay up to date.
Rights and Obligations of Foreign Owners
Foreigners can buy property in Mexico, but there are rules about how you own, use, and care for your property. You must follow Mexican laws and might have specific obligations as a non-citizen owner.
Legal Rights After Purchase
When you buy property in Mexico, you have the right to use, rent out, remodel, or sell your property. In restricted zones along coastlines or borders, you can hold property through a bank trust (fideicomiso), which lets you fully control and transfer your property, but the bank holds the title for you. This trust usually lasts for 50 years and can be renewed.
Outside these restricted zones, you may own land directly in your name. However, you cannot buy land that is part of communal (ejido) ownership, but you can lease it in some cases for business use. You may pass the property to your heirs, sell at any time, or use it as a vacation home. Foreigners have legal protection under Mexican property law, just like citizens, as long as you meet all requirements and follow the trust or company rules.
Responsibilities for Maintenance
Owning property in Mexico comes with costs and duties. You are responsible for paying annual property taxes, called predial, which are usually lower than in the United States or Canada. You must keep the property in good condition and make sure it does not become a risk or nuisance to neighbors if you live in a privada (gated community) that has an HOA.
Basic maintenance like repairs, yard work, and pest control is your responsibility. If your property is in a condo or development, you will likely pay monthly or yearly maintenance fees- also known as mantenimiento. This usually covers things like common areas, community pools, a gym and in some cases part of your utilities.
You must respect local laws and community rules. Staying up to date on utilities, HOA fees, and permits is necessary. Not following maintenance rules can lead to fines or legal problems.
Selling or Inheriting Property as a Foreigner
Foreigners in Mexico can sell property or pass it on to heirs, but legal steps and documentation must be followed. Specific procedures exist for both selling and inheritance, and working with trusted legal professionals is recommended.
Get our FREE Guide to Estate Planning in Mexico
Selling Procedures for Foreign Owners
To sell property as a foreigner, you need your ownership documents, proof of tax payments, and a valid official ID. If your property is held through a bank trust (fideicomiso), the bank must approve the sale. You’ll also need to pay capital gains tax, unless you qualify for an exemption.
Steps to sell:
- Hire a notary public to oversee the transaction.
- Sign the sales agreement and transfer ownership at the notary’s office.
- Ensure payment of all local taxes and fees.
Any outstanding debts on the property must be cleared before the sale is finalized. Buyers will want assurance that there are no legal claims against the property.
Inheritance Rules and Processes
If you want to leave property to heirs, having a Mexican will is highly advised. Without a will, Mexico’s intestate succession process applies, and property is distributed according to local law. This can take extra time and money.
For foreign owners, property can legally be transferred after death to named beneficiaries. The process usually involves:
- Presenting a death certificate and will (if it exists).
- Notifying the bank holding the trust, if applicable.
- Completing legal paperwork to update ownership records.
If no will exists, heirs must complete an intestate proceeding, which assigns ownership by court decision.
Common Challenges and Practical Considerations
Buying property in Mexico can be rewarding, but it requires careful attention. There are specific legal steps and unique risks that can affect your experience.
Navigating Bureaucracy
The process to buy property in Mexico involves more steps for foreigners compared to locals. If the property is within 50 kilometers of the coast or 100 kilometers of an international border, you must use a bank trust (fideicomiso) or set up a Mexican corporation. This rule applies whether you’re buying a home, land, or commercial space.
You will need to work with a notary public, who oversees the contracts and registers your ownership. It is important to verify that the property title is clear and that there are no outstanding debts or liens. Having a bilingual attorney can help you understand documents and avoid miscommunication.
Delays and extra paperwork are common, so patience is necessary. Tip: Keep copies of all agreements and official papers. Document your interactions and track deadlines for payments or registrations. This will make the process smoother and help you fix problems if they come up.
Avoiding Common Scams
Scams can happen at different stages in the buying process. Some common scams include fake property titles, sellers misrepresenting what you are buying, and agents who disappear with your deposit. You might also encounter properties listed as “ejido” land, which is communal and cannot be legally sold to you.
To protect yourself, always:
- Check the property’s legal status with the local Public Registry.
- Use only trusted real estate agents and qualified notaries.
- Never pay large sums before verifying ownership and legal documents.
Ask for official receipts for every payment. Get everything in writing and make sure you understand each term. Carefully checking paperwork and being cautious with payments will lower your risks. To learn about legal pitfalls and how to avoid scams, check out our COMPLETE Mexico Relocation Guide– a step by step course teaching you how to move to Mexico the right way. Which also includes our complete directory of vetted and recommended contacts- such as: realtors, immigration facilitators, real estate lawyers, notarios, relocation tour guides and more!
