Frequently Asked Real Estate Questions

Yes, foreigners can buy property in Mexico. However, if you want to purchase within 50 kilometers of the coast or 100 kilometers of the border, you must buy the property through a trust with a Mexican bank known as a Fideicomiso; a renewable 50-year land trust. As the beneficiary of the trust, you’ll own the property in perpetuity and be able to sell, rent, renovate etc. Additional benefits of a Fideicomiso include simple transfer of property control, the listing of more than one beneficiary on the trust, and the avoidance of the inheritance tax after naming an heir. 

Cabo is traditionally a cash market, however, there are a variety of financing options available to help you achieve your lifestyle goals. Developer financing, Seller financing, and third-party lending are all potential options. To learn more about which options can help in your situation, send me a message.

There are three main taxes to be aware of. 

1. The Mexican government charges a 2% acquisition tax on the purchase price of the property. 

2. Property taxes are paid yearly and depend on the location and size of the property. They are based on the properties assessed value and not current market value so tend to be lower than what you’ll pay in the US. If you pay them early, you can receive a discount.

3. Lastly, capital gains tax will apply when you sell the property. 

The buyer is responsible for the closing costs, which typically range from 4-6% of the purchase price. Two percent of this is the acquisition tax and the rest consists of other fixed and variable fees like bank trust fees, notary fees, and National Foreign Investments Registration among others.

Commission structure varies by transaction, but generally commission is 6%-8% of the property purchase price. The Seller is responsible for paying the commission.

For information regarding visas, visit your local Mexican consulate or the official National Immigration Institute (INM) website to find the requirements to apply for or upgrade your immigration status.

There are a few immigration statuses and associated visas for foreigners traveling to Mexico:

Tourist Visa

When you arrive in Mexico, a customs officer will stamp your passport with a 180-day Tourist Visa. This visa allows you to vacation in the country but does not give you permission to perform any profitable activities.

Temporary Resident Visa

If you wish to live here full-time, a Temporary Resident Visa allows you to stay for a year before applying for renewal. Property owners are advised to obtain this type of visa as it does not place restrictions on foreign travel. A work permit can be added which gives you the legal right to work in Mexico.

Permanent Resident Visa

After four years of successfully renewing your Temporary Resident status, you can apply for a Permanent Resident Visa. This visa allows you to live, work, and enjoy the same rights Mexican citizens do except the right to vote in elections. To keep your resident status, you must inform the INM of any address or work changes within 90-days of their occurrence.