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Frequently Asked Questions

Can Foreigners buy Property in Mexico?

  • Yes!

There are, of course, legal steps to follow when buying property in Mexico as foreigners but with our help and guidance, we will keep the process simple and fully understood.


In this region, foreigners buying property in Mexico need to own it through a bank trust referred to as a Fideicomiso.

Why do Foreigners need a Bank Trust to purchase property in Vallarta?

  • The Mexican Constitution of 1917 designated the area within 100 kilometers (62 miles) of Mexico's borders and within 50 kilometers (31 miles) of the coastline as off limits to direct real estate ownership by foreigners. This are used to be known as the “Prohibited Zone” but new beneficial legislation in place now refer to it as the “Restricted Zone”.
  • A foreigner can purchase the right to hold, occupy, use, improve, develop, rent and sell real estate by purchasing a beneficial interest in a bank trust which holds the legal title to the property.
  • The bank holds legal title to the real estate and acts as trustee while the beneficial interest in the trust is owned by the foreign individual.
  • The trustee bank is obligated to deal with the property only for the benefit of the beneficiary.
  • The bank takes its instructions from the beneficiary owner only.
  • The beneficiary may be a foreign individual or other foreign legal person such as a corporation.
  • The trust exists strictly for the benefit of the beneficiary who is for all practical purposes the owner of the underlying property.
  • The property may be passed on by will or inheritance, it can be used as collateral for a loan and the property can be freely enjoyed, rented or sold all as determined by the owner beneficiary.

The Foreign Investment Law of 1993 went even further and authorized the out-right ownership of nonresidential real estate in the Restricted Zone by a Mexican corporation which can be 100% foreign owned. This includes real estate purchased for development which will be sold off to foreigners for residential use. The corporation is considered Mexican and therefore the foreign shareholders can own the land directly through this Mexican person.

What is a Mexican bank Trust or Fideicomiso?

  • Any foreigner or Mexican National can constitute a Fideicomiso (the equivalent to an American beneficial trust) through a Mexican bank in order to purchase real estate anywhere in Mexico, including the Restricted Zone.
  • When buying property in Mexico as a foreigner, the buyer requests the Mexican bank of his/her choice to act as a trustee on his/her behalf.
  • The bank, as a matter of normal course, obtains the permit from the Ministry of Foreign Affairs to acquire the chosen property in trust.
  • The Trust term is 50 years and can be automatically renewed for another 50 year period.
  • During these periods you have the right to transfer the title to any other party, including a member of your family.
  • The bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary who has all the benefits of a direct owner, including the possibility of leasing or transferring his/her rights to the property to a third party or to a pre-appointed heir.
  • The bank ensures precise fulfillment of the trust, according to Mexican law, assuming full technical, legal and administrative supervision in order to protect the interests of the buyer.
  • "Fideicomisos" are not held by the trustee as an asset of the bank.
  • More Mexican Nationals are opting to purchase with a Bank trust because it clearly states who they wish to become their beneficiaries in the event of death.
  • The Trust works as a will and testament for the property purchased and saves time and money by avoiding a lengthy probate case (which can be up to 3 years in Mexico).

What documents do I need in order to buy property in Mexico?

Apart from having the necessary funds, there are standard documents you will need to present to the Notary when buying property in Mexico as a foreigner:

  • Valid passport.
  • Valid driver’s license (normally 2 forms of photo ID are required).
  • Proof of address (at home or here in Mexico) in the form of a recent utility bill.
  • Personal information (full legal name, date of birth, place of birth, address, contact information email and phone).
  • Beneficiary information (full legal names, copy of passports of official IDs and addresses).
  • A Mexican CURP number (if you have one)
  • A Mexican RFC number (if you have one, if not a generic foreigner one will be created for you at closing)

What is a CURP?

A CURP is a formal identification number that all Mexican nationals acquire at birth (on their birth certificates). Mexican Residents acquire this CURP number on their Resident Cards and foreigners have it on their Resident Cards (both Permanent and Temporary).

Do I Need a Temporary or Permanent Resident Card in Mexico?

If you do not plan to stay in Mexico for more than 6 months at any time then no, you don’t.


If you are planning to stay for more than 6 months in Mexico then the answer is yes.

How Do I Get a Mexican Resident Card?

If you wish to stay for more than 6 months consecutively in Mexico then you will need a Resident Card. The card is issued for the first time outside Mexico. So first time applicants need to go to their nearest Mexican Consulate outside Mexico.


If you need to apply for a visa or change your immigration status in any way there is an on line procedure which starts the process. That process has been translated and documented 
here.

The cost is:
• 1 year - $3,310 pesos
• 2 year - $4,690 pesos
• 3 year - $5,940 pesos
• 4 year - $7,040 pesos

It is good for 4 years after which you must either leave the country to apply for a new card or convert it to a Permanent Resident Visa (MPRV) / Residente Permanente.


If you already have non-immigrant status (FM3) in its 1st or 2nd year then you can convert it to a temporary resident visa at the time of renewal of your status without leaving the country.


If your non-immigrant status (FM3) is in its 3rd or 4th year then you will have to convert it to a permanent resident visa or leave the country. You can apply for a change in status 6 month prior to its expiry.


The MPRV can be purchased for up to 4 years without having to renew it annually.


There is a minimum income requirement for getting this visa in the range of $2,000 USD per month or $102,000 USD of investments for each individual. You may be required to prove this with bank statements but the Immigration offices have the discretion to use a combination of assets including real estate to arrive at an equivalency. The idea is that you should be financially self-sufficient.


Once you have met with the Consulate they will provide you with a VISA document inside your passport. With this document you can legally enter Mexico and you have 30 days within which to present it to the local immigration office to exchange it for a valid Temporary or Permanent Resident Card.


Once you have the Resident Card, on it will automatically appear your new CURP.

If you want to be a registered tax payer in Mexico, you will need an RFC tax number. How do I get one?

The RFC is a unique TAX ID number issued to all active and non-active tax payers in Mexico.


This can be obtained online 
here or a short visit in person to the local Vallarta SAT office (Mexican IRS office) can obtain your RFC for the closing of the property.


You will need your original Passport, Immigration Card and proof of address to obtain the RFC in person at the SAT office.

When does the closing process take place?

  • All sales are conducted through a Notary Public.
  • A Spanish sales contract with a courtesy English translation is written up by me and presented to you for review then initial each page and sign.
  • If agreed upon by the Seller, I work with closing coordinators, attorneys who facilitate the sale process for us, at no extra cost to the buyer.
  • We set up an Escrow account (approx. $800 USD) to hold funds until closing.
  • A standard 10% deposit is required to formalize the sale.
  • Standard timing is 45 days for a closing and can be up to 90 days if the property is acquired through financing.
  • The final balance of 90% is transferred to Escrow a few days prior to closing.

The closing attorney arranges all the documentation with the Notary and the Public Registry office and when we are ready to close we meet at the Notary for the final signatures. On closing, the buyer is given a copy of the certified deed but the original can take up to 6 months to get formally registered in the Public Registry office. Once it is ready, the Notary will let the buyer know to come and collect it.

What is Public Registry?

  • In Mexico, deeds, usually known as public instruments, can be researched at the local Public Registry of Property which is open to the public.
  • The deed must be finalized and signed by a Notary Public.
  • The deed will typically list the parties involved in the transaction including the Notary, seller, buyer, and the trustee bank.
  • The deed identifies the property.

Once the deed is finalized and signed by the Notary, by the seller, by the bank as trustee (if a bank trust is involved) and by the buyer (who will also be the trust beneficiary if a trust is used), the purchase price changes hands and the transaction is considered closed.

Why do property sales go through a Public Notary?

  • In Mexico, a Notary Public is a quasi-governmental official who reviews all documents of importance with respect to the sale of real estate.
  • The training, function and responsibility of Notary Public in Mexico are completely different from North America.
  • In Mexico, a Notary Public is appointed by the governor of a Mexican state for life.
  • A Notary must be a Mexico licensed attorney.

Becoming a Notary Public involves attending law school in Mexico, obtaining a law degree, passing an exam and being admitted to the bar in Mexico. To hope for appointment, the prospective Notary Public must then work as an apprentice for several additional years with a Notary Public. A Notary does not act as an escrow service. The Notary Public's job is to see that certain formalities have taken place. Although a Notary is always an attorney, it is not the Notary's job to provide any party with legal advice. Any buyer or seller who wants legal advice should hire a separate lawyer licensed in Mexico.

Can foreigners get a mortgage in Mexico?

  • Yes! Currently financing is available for citizens of Mexico, the USA, Canada, the UK and Spain.
  • There are financial institutions that work locally and have been improving the quality of service, speed of the transaction and lowering the interest rates to attract more buyers.

There are details of the most reputable brokers in my Affiliations section.

Can foreigners open a bank account in Mexico?

• Yes, you can!

The paperwork required is: 

  •  Passport
  •  Proof of address
  • Tourist card or FM3 given on arrival in Mexico
  • 3 local references
  • $3,000 pesos to open the account. 

I recommend using Bancomer for the peso account as they offer a fully bilingual service for foreigners (Preferential Client Section) and are well versed on dealing with property owners and renters who are not here all year round and give you a Gold card which avoids lining up at the branch (priceless). The benefits include being able to pay bills online, write checks in pesos, make standing orders for bills to be paid each month and check balance and make payments via the internet when you are not present. An appointment is recommended at the bank as they get busy! So as to not be charged a commission they ask that you maintain at least $3,000 pesos in the account.

As a foreigner selling my property will I pay capital gains tax on closing?

  • The simple answer is yes, if you made money you need to pay tax.
  • Yes, if you are not a full time resident and tax payer in Mexico (you need a valid Permanent Resident Immigration Card or a Mexican voter card and all bills in your name as proof of residency).

In Mexico, the concept of capital gains tax does not apply in the sense in which it is determined in the United States. Here, the tax on the gain is 35%. For example, selling a property for $200,000 USD when it was bought for $100,000 USD generates $35,000 USD tax.

However, in order to determine the gain, the following costs and expenses are deducted from the amount for which the property is officially sold:

  • The original land cost and the depreciated construction cost, based on the number of years the property was held and adjusted for inflation according to the official consumer price indexes.
  • Additions, modifications and improvements, but not maintenance, made on the property (construction), adjusted as above.
  • Commissions paid to real estate brokers by the seller.
  • The closing costs, including all expenses, taxes and fees paid by the seller. The Notary will retain the calculated gain after deductions forwarding it to the Mexican tax authorities. The seller will then deduct this amount against his/her annual tax return, which becomes an adjustable tax credit in the U.S.

In order to ensure you are paying what you should be and not being over charged, we work with qualified legal tax accountants to help us ensure the whole process is legal and straightforward.

If you have other questions about how to buy real estate in Mexico, please contact us for assistance. We understand that the process of buying property in Mexico as a foreigner or understanding how to secure a mortgage in Mexico can sometimes be confusing, but our expert team is here to support you every step of the way.