Consultation to Clarify and Explain Legal Procedures for Real Estate in Mexico

Real Estate in the Mexican Caribbean has proved, over the years, to retain or increase its value, and many investments in this area have proved profitable, with high yields, especially for vacation rentals. Thus, investments in Real Estate in the Mexican Caribbean can be secure and profitable; you can find your perfect home away from home, a peaceful place to retire or a profitable vacation rental business. However, there are certain steps that should be followed and information to be gathered and verified to ensure that the property in question will be a secure investment.

A foreigner may own Real Estate in Mexico and, as such, can buy, sell, lease develop and even operate a business there, but there are a few things to keep in mind.

If the Real Estate is within 50 kilometers from the coastline (aprox. 31 miles) or 100 kilometers from an international border (aprox. 62 miles) it is in a “restriction zone” and a foreigner must own it either through a bank trust, called a Fideicomiso or through a company. The title to the property would then be in the name of the Trustee Bank or the company, but the foreigner would have full ownership rights. If the property in question is outside of this restriction zone, a foreigner may purchase it outright and the title will be in the purchaser’s name.

Before buying, it is also important to conduct a thorough due diligence to verify the chain of ownership of the property, that it is free of liens and encumbrances, that it is not ejido land and the legitimacy of the seller. This may be accomplished through a title search.

If everything is in order, and the contract for the purchase is acceptable, a government authorization, where applicable, is requested and if the acquisition must be through a Fideicomiso, a meeting is held with the bank to set up the property trust.

Once you are ready, the closing of the sale must be done before a Notario Público (Notary Public) who will verify all the documentation and draw up the final title deed. The Notario Público represents the government and has been appointed as its’ representative and therefore cannot represent either the seller or the buyer. As part of the closing, the Notario Público will calculate the capital gains tax, the property transfer tax, the public registration fee, and other applicable fees and taxes and will collect these to transmit them to the appropriate entities. The Notario will also charge a fee that is regulated and varies according to the value of the property transaction. The Notario must inscribe the transfer of property in the Public Registry since if it does not appear in this registry, the ownership may be contested by a third party. It is of the utmost importance to verify that this inscription in the Public Registry takes place

Since the Notario Público will not represent you in the purchase of a property, it is important to have a Mexican attorney to guide you through the process and ensure that you are protected, that your objectives are met and that the property you purchase is secure. As laws and procedures in Mexico are different from those in Canada and the USA, it is important that your attorney be knowledgeable and licensed to represent you in Mexico.

At Amigo Country we have a team of experienced attorneys that can guide you safely and securely through the entire procedure and can be by your side every step of the way. If required, we provide a full service so that your Real Estate Transaction in Mexico is hassle free. Just provide us with the proper documents and we will do the rest.