# Buying Real Estate in Mexico, all you need to know!



## tommygn

I have taken the time to write this guide to buying property for expats, I know its a long post, but we have to keep in mind that this is intended to protect people´s estates.

I want you to be able to make the best decisions after you read this. This guide is about the legal process of selling/buying property. No recomendations on any particular area or type of property will be given. The best property is the one you like the most out of those which comply with the legal prerequisites.

Please feel free to add questions that I did not include in the original post.



*Can I buy property in Mexico? What do I need?*

YES you CAN! You do not need an FM2 nor an FM3 to buy property in Mexico. The only thing you actually need is your FORMA MIGRATORIA which you fill out when you get into Mexico legally. Even as a tourist you fill out this form before going through aduana.

Foreigners are allowed to own property in their own name in Mexico, provided it is 50 kms away from the coastline and 100 kms away from the north and south borders. In the case of property near the coast or border and only in that case, you need to buy it through a FIDEICOMISO (Trust fund). Do not use fideicomisos in other areas. It is unnesessary.



The general process of buying PROPERTY includes these steps, If you are employing the services of a REALTOR, make sure he/she is following these steps. If not, choose one that does!


*1- Choosing a property*, be sure to visit at least 5 options and compare them based on your criteria. You are the best person to determine that criteria, just make sure it is RATIONAL.


*2- Buy proposal*, generally (NOT NECESARILLY!) property closes 5 to 10% below asking price.


*3- Due dilligence:*

*3.1-*Be sure that the property´s “Escritura” (TITLE)is registered in the seller´s name. This is done in the “Registro Publico de La Propiedad (or RPP)” (PUBLIC TITLE REGISTRY). These registries are divided into hundreds of districts. To know which one the property is registered in, check the very last page of the Escritura. There should be a stamp with the inscription: “Inscrita en el Registro Publico de La Propiedad...” The numbers written there indicate the Escritura´s registry information.

*3.2-*When you go to the RPP ask them to make a “Consulta” you pay a small fee (Under $500 pesos) and you need to make sure the Escritura is in the seller´s name and that the property is not guaranting any debts, this is called GRAVAMEN and you want the property to be free of gravamen.

*3.3-*IF THERE IS A MORTGAGE it will be shown here as a gravamen. Don´t worry, of course the property can still be sold, but you need to make sure that the mortgage is declared on the Contrato de Promesa de Compraventa (SELLER´S AGREEMENT) and that the down payment is less than the owner´s equity on the property. Then the bank needs to provide a letter to the seller with instructions on how much to pay and how to cancel the mortgage. This letter should be presented to your NOTARIO (who will act as a title agency, see next step) and the money owed to the bank has to be paid to the bank, NOT the seller, as per the instructions on the bank´s letter.

*3.4-* Make sure the property does not owe PREDIAL (Property taxes) on the last 5 years, any taxes owed before that are prescribed and thus are not collectable by the government. Do the same check for water services. You check predial at the municipality and water at the municipality´s water company.


*4- SELLER´S AGREEMENT* (Contrato de Promesa de Compraventa) It is a contract that stipulates the buyer´s will and obligation to buy and the seller´s will and obligation to sell under certain conditions which include price, what is to be sold, when it is to be sold, what will happen if this is not sold and other conditions. The buyer generally pays about 20% or less of the property value when this is signed. Again, in the case that the seller still owes on the mortgage, only agree to down payments equal or less than his equity and pay the rest to the bank on the next step. Also, make sure that the seller´s address and penalty in case of not closing are very well described, as well as the term before you need to close. The seller´s penalty should include returning your down payment, PLUS a penalty fee, generally between 10 and 20% of the property´s value. The same penalty will apply to the buyer if he backs out.

*4.1-* Apply to the Secretaria de Relaciones Exteriores for permission to purchase. This is required of non-Mexicans. They want a copy of the Compraventa and old Escritura and charge a fee of around $5000 pesos.


*5- CLOSING AND TITLING IN YOUR NAME-* By now, you need to choose a NOTARIO (Public notary, who will act as a title agency). Be sure to pick it yourself, buyers have the right to choose their Notario. In the case of new developments it is best to go with the developer´s Notario, as the process in new property is much more complicated and their Notario already has everything on file.

*5.1-* Your Notario will go through the process of Due Dilligence described in steps 3.x. The reason you made your own due dilligence is to make sure the property was in order before the private seller´s agreement, and thus protect your down payment. Their Due Dilligence will include certifications on everything you checked on steps 3.x.

*5.2- Closing costs*. The Notario fees and titling taxes are to be paid by the buyer, the income tax is to be paid by the seller. Generally closing costs are between 6 and 8% of the property´s value and are to be paid by the buyer.

*5.3- Closing*, both the buyer and seller will be schedulled to apear before the Notario, and the buyer will pay the seller, both will sign the title and the Notario will give testimony of this and register the sale in the RPP, thus registering the title in the buyer´s name.

*5.4- *The Notario will present both parties with their invoices, which will include taxes and fees. This amount should have been previously anounced to both parties by the Notario. If you already have your closing apointment and you don´t know this, ask your Notario what your closing cost will be to the cent. Best way to pay for this is a cashier´s check.


*6- ENJOY YOUR LITTLE PIECE OF MEXICO!!!*


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## TundraGreen

Very helpful summary. Thanks. 

I would add one point. When I purchased in Jalisco, I had to apply to the Secretaria de Relaciones Exteriores for permission to purchase. This was required of non-Mexicans. They wanted a copy of the Compraventa and old Escritura and charged a fee of around $5000 pesos.


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## tommygn

TundraGreen said:


> Very helpful summary. Thanks.
> 
> I would add one point. When I purchased in Jalisco, I had to apply to the Secretaria de Relaciones Exteriores for permission to purchase. This was required of non-Mexicans. They wanted a copy of the Compraventa and old Escritura and charged a fee of around $5000 pesos.


Yep, left that one out!

I would add it as point 4.1


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## circle110

Might I suggest that TundraGreen edit the original post and add that 4.1 point and fix the couple of typos. Then it would be worthy of being put into the "Mexico FAQ" sticky.


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## TundraGreen

circle110 said:


> Might I suggest that TundraGreen edit the original post and add that 4.1 point and fix the couple of typos. Then it would be worthy of being put into the "Mexico FAQ" sticky.


Done.


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## makaloco

Well done, Tommygn, thank you!! I'm relieved to know that my home purchase process went correctly, especially since it was in 2006.


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## DenverDuck

Just a note. Our Notario/closing costs have averaged just around $2,500.00 US


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## eagles100

DenverDuck said:


> Just a note. Our Notario/closing costs have averaged just around $2,500.00 US


On what value house would that be on?


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## DenverDuck

Between $80,000 and $90,000 USD. Both in Merida.


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## eagles100

So if one purchases a home at 150k US, about much would notario/closing costs be?


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## TundraGreen

eagles100 said:


> So if one purchases a home at 150k US, about much would notario/closing costs be?


Based on the amount posted below and my experience, they seem to be about 2% or 3%, so maybe $3000 to $4500 on $150K.


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## tommygn

DenverDuck said:


> Just a note. Our Notario/closing costs have averaged just around $2,500.00 US


Yes, closing costs invlove about 12 variables. They are higher in cities compared to rural areas, so I decided to go with something very general. 

The reason why it varies so much is the most of the closing cost is tax (Impusto de Adquisicion de Bienes Inmuebles, or Traslado de Domino depending on your state) and this tax is different for different people even if buying the same property. More so it will also depend on the value of the property you are buying, the tier jumps higher on higher valued properties.

Age, your residency, the amount of homes you own, the area the property you are buying is in, and more factors affect your closing cost, so I went with something of a worst case scenario.

In any casy have your Notario give you a detailed itemized description of your closing costs, many are deductables.


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## grotton

I have a legal question. My partner is Mexican and we are not married. We want to buy a house in Merida which normally requires a fideicomiso for foreign citizens. I would rather avoid this. Can my partner hold the title with me, an American, somehow attached to secure my interest? Obviously my partner could own the property entirely but if something terrible were to happen, such as death etc. where would I be. I wouldn't be able to sell the house in an emergency. Anyone dealt with this or have ideas?
Thanks.


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## tommygn

Well, your partner could own it and have a will where it is stated that you get the house if the worst happens.

I would still highly recomend the fideicomiso, why do you want to avoid the fideicomiso?

It is not the hassle you could think, One more thing, in any case I reacomend that anyone who owns any kind of valuables, including real estate, have their will notarized.


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## tommygn

makaloco said:


> Well done, Tommygn, thank you!! I'm relieved to know that my home purchase process went correctly, especially since it was in 2006.


So am I!


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## TundraGreen

tommygn said:


> Well, your partner could own it and have a will where it is stated that you get the house if the worst happens.
> 
> I would still highly recomend the fideicomiso, why do you want to avoid the fideicomiso?
> 
> It is not the hassle you could think, One more thing, in any case I reacomend that anyone who owns any kind of valuables, including real estate, have their will notarized.


Every September, Notario Publicos do wills for half price. I think this is a nationwide practice. I spent about $1300 or $1400 pesos on one.


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## grotton

tommygn said:


> Well, your partner could own it and have a will where it is stated that you get the house if the worst happens.
> 
> I would still highly recomend the fideicomiso, why do you want to avoid the fideicomiso?
> 
> It is not the hassle you could think, One more thing, in any case I reacomend that anyone who owns any kind of valuables, including real estate, have their will notarized.


I understand the fideicomiso is secure, I would only want to avoid it because of the associated costs and potential tax advantages to future sales if a Mexican national showed on the title... which I suppose could still be the case.


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## tommygn

grotton said:


> I understand the fideicomiso is secure, I would only want to avoid it because of the associated costs and potential tax advantages to future sales if a Mexican national showed on the title... which I suppose could still be the case.


Yes, it is. The tax advantage aplies to anyone, mexican or not, selling their primary home if they have owned it for 5 years or more. The construction must be at least 1/3 of the lot size.

Sometimes this subjects are hard to address, but to be honest, if your partner buys the house in her/his name, and for some reason the relationship ends, then you would own nothing and have no (or little, depending on your state) legal way to defend it as yours. If your money is going to be invested in this porperty, you should have some way to claim it.

I hope not to offend you with this. I would choose the fideicomiso.


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## tommygn

TundraGreen said:


> Every September, Notario Publicos do wills for half price. I think this is a nationwide practice. I spent about $1300 or $1400 pesos on one.


That is correct.

Also the "Traslado de Dominio" or "ISAI" depending on your state, is waived when buying property, on homes of about $1,500,000 pesos or less. Some other taxes on different notary subjects are reduced.


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## grotton

tommygn said:


> Yes, it is. The tax advantage aplies to anyone, mexican or not, selling their primary home if they have owned it for 5 years or more. The construction must be at least 1/3 of the lot size.
> 
> Sometimes this subjects are hard to address, but to be honest, if your partner buys the house in her/his name, and for some reason the relationship ends, then you would own nothing and have no (or little, depending on your state) legal way to defend it as yours. If your money is going to be invested in this porperty, you should have some way to claim it.
> 
> I hope not to offend you with this. I would choose the fideicomiso.


Your point is one I've considered and I'm not offended. I'm of practical Scottish ancestry and we think about things like that. And not so much even if the relationship ends but if something happens to one of us, the other must be able to control the property without issue.


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## tommygn

grotton said:


> Your point is one I've considered and I'm not offended. I'm of practical Scottish ancestry and we think about things like that. And not so much even if the relationship ends but if something happens to one of us, the other must be able to control the property without issue.


Well, in that case if you want to go that way, the will is your option. Also, check your state law, in some states if you live together as partners for more that 2 years OR have a child together, you are considered to live in concubinato, and both acquire the same rights, even inheritance-wise, as if you were married.

Even then, have the will done very explicitly.


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## La Osita

tommygn said:


> I have taken the time to write this guide to buying property for expats, I know its a long post, but we have to keep in mind that this is intended to protect people´s estates.
> 
> I want you to be able to make the best decisions after you read this. This guide is about the legal process of selling/buying property. No recomendations on any particular area or type of property will be given. The best property is the one you like the most out of those which comply with the legal prerequisites.
> 
> Please feel free to add questions that I did not include in the original post.


Thank you for this post. I found it very helpful. I do have a question... although a bit afraid of opening this can of worms...

Ejido land. It's a bugaboo. My Mexican husband is already embroiled in a two year long fiasco which may or may not ever come to any fruitful conclusion...land bought, papers forged, money gone, thief continues his activities selling and reselling the same lands, police case two years old, no conclusion.

But, that aside...

Is there a safe, proper and legal manner in which to purchase Ejido lands (with the assistance of a Notario, of course)? Most all land in this area seems to be held by one or another of the Ejido groups. My husband and I some day would like to purchase a piece of farm land here in this area, but given the huge sum of money we've already lost, and are likely to never see again, it seems like a huge risk. 

Any thoughts?


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## mickisue1

To grotton: as a Scot, surely you are aware of the saying, "Penny wise and pound foolish."?

The cost of the fideicomiso is tiny compared to the cost of losing your property, should something, anything happen. 

My POV is that, if I can't afford to protect what I own, I can't afford to own it in the first place.


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## tommygn

itnavell said:


> Thank you for this post. I found it very helpful. I do have a question... although a bit afraid of opening this can of worms...
> 
> Ejido land. It's a bugaboo. My Mexican husband is already embroiled in a two year long fiasco which may or may not ever come to any fruitful conclusion...land bought, papers forged, money gone, thief continues his activities selling and reselling the same lands, police case two years old, no conclusion.
> 
> But, that aside...
> 
> Is there a safe, proper and legal manner in which to purchase Ejido lands (with the assistance of a Notario, of course)? Most all land in this area seems to be held by one or another of the Ejido groups. My husband and I some day would like to purchase a piece of farm land here in this area, but given the huge sum of money we've already lost, and are likely to never see again, it seems like a huge risk.
> 
> Any thoughts?



Well, first of all let me say that im very sorry to hear what happened to you and your husband.

I am aware of the existence of similar cases, and all I can say is that I personally think very agresively against that kind of "people" who con hard working families out of their estates.

Luckily, there is a way you can legally acquire ejidos. I will state the general process, but let me say that the process is so complicated that many people choose to only buy private property.


1- Ejido, what is it? Ejido is a form of land owenership where the land is communal, that means that a large extent of land is owned by a group of farmers. Then lots are alocated to each member, for them to work on, not to exclusevily own.

2- The sale of any extent of the ejido must be aproved by the general assembly by vote. In said assembly, all members of the ejido are called to vote.

3- The composition of the land to sell must be measured, with geographical location, now done by gps. This is done by a topographer.

4- Permission to de-incorporate the land from an ejido must be obtained from the SAGARPA. (Mexico Farm Department)

5- The incorporation into a private land with a new entry on the Property Public Registry must be correctly done, have a notario do it for you.

6- Titling said land, now incorporated in the RPP in your land.



This is the only way to do it. If you are going to give any money to them, have a sellers agreement which states and includes copy of the minuta (minutes) of the generall assembly of the ejido where the sale of the land is voted in favor, signed by the presidente ejidal, secretario de ejido and tesorero de ejido. Do not pay more than 20% of the value of the land on the sellers agreement, pay the rest when the land is titled in your name.


That is my best advise for ejido buying, the reason why its so complicated is that some ejidos are compose by hundreds of people who have no legal training nor experiend in real estate transactions. The are impatiend and demanding, thinking that they want their money first, before they title the land in your name. And you need their aproval. But if you are lucky, where you convinced them to follow the structure of the process and sell the land to you, go ahead.


NEVER, EVER GIVE ANY MONEY TO INDIVIDUALS WHO DO NOT HAVE THE SOLE OWENERSHIP OF A PROPERTY!

If the property is privately owned by 2 or more people, give the money to both and have the sellers agreement with both, If its an ejido, do the process through the ejido general assembly.

If the property is solely owned, do your research in the Public Registry and make sure you are dealing with the legal owener.

If in need, look for help with a certified realtor, this certification is given by the AMPI (Asociacion Mexicana de Profesionales Inmobiliarios). This certification is tougher than the US certification, so its a good reference. Have them show you the cedula profesional (licence).


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## La Osita

Thank you. Very much appreciated. This information will give me a better perspective on any possible future purchase.

And yes, it's complicated and rather shady, especially when Ejido Board members are being paid off to make "new" papers so lands can be "bought and sold" multiple times. It's quite a racket and very ugly. Hopefully, in time, this individual and his accomplices will be prosecuted and taken off the street so they can't hurt any more families.


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## tommygn

itnavell said:


> Thank you. Very much appreciated. This information will give me a better perspective on any possible future purchase.
> 
> And yes, it's complicated and rather shady, especially when Ejido Board members are being paid off to make "new" papers so lands can be "bought and sold" multiple times. It's quite a racket and very ugly. Hopefully, in time, this individual and his accomplices will be prosecuted and taken off the street so they can't hurt any more families.


Sadly, this is very true...

Let me know if I can help you in future purchases. I do hope justice is served.


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## La Osita

Thanks, and I will. Me too.


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## maffrandj

My partner and I are in the EARLY planning stage of purchasing a vacation condo in Playa del Carmen. I know we (two American citizens) are able to get a mortgage through a Mexican bank, but are a little confused by the process. Does anyone have any advice on this? Are there any down payment requirements? Etc...

Also, any other life lessons in this process would be helpful. Like I said, we're still in the very early planning stage. Thanks.


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## TundraGreen

maffrandj said:


> My partner and I are in the EARLY planning stage of purchasing a vacation condo in Playa del Carmen. I know we (two American citizens) are able to get a mortgage through a Mexican bank, but are a little confused by the process. Does anyone have any advice on this? Are there any down payment requirements? Etc...
> 
> Also, any other life lessons in this process would be helpful. Like I said, we're still in the very early planning stage. Thanks.


Mortgages are fairly rare in Mexico. Most purchases are for cash. By any chance are you thinking of a fideicomiso. Foreigners are not allowed to purchase property within 50 km of the coast, but they can obtain a long-term lease through a bank. These leases are called fideicomisos.


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## maffrandj

TundraGreen said:


> Mortgages are fairly rare in Mexico. Most purchases are for cash. By any chance are you thinking of a fideicomiso. Foreigners are not allowed to purchase property within 50 km of the coast, but they can obtain a long-term lease through a bank. These leases are called fideicomisos.


Yes, fideicomiso. Guess I've read too many things and have confused myself. I've seen mortgages referenced on other websites for fideicomiso properties, but maybe they're not do-able?


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## Longford

maffrandj said:


> Yes, fideicomiso. Guess I've read too many things and have confused myself. I've seen mortgages referenced on other websites for fideicomiso properties, but maybe they're not do-able?


If you haven't seen the article I'm linking below, you may find it helpful background information:



http://www.stewart.com.mx/download/557/pdf/inmo66_Stewart__.pdf


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## Souper

TundraGreen said:


> Mortgages are fairly rare in Mexico. Most purchases are for cash. By any chance are you thinking of a fideicomiso. Foreigners are not allowed to purchase property within 50 km of the coast, but they can obtain a long-term lease through a bank. These leases are called fideicomisos.


The fideicomiso is not a lease, calling it one does lead to some confusion for others.
It is a bank trust, in simple terms the bank owns the property and the foreigner owns the trust holding the property. No lease is involved, it is an ownership.


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## TundraGreen

Souper said:


> The fideicomiso is not a lease, calling it one does lead to some confusion for others.
> It is a bank trust, in simple terms the bank owns the property and the foreigner owns the trust holding the property. No lease is involved, it is an ownership.


Quite right. I used the term loosely, because I think of it as being like a lease. Thanks for the correction.


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## maffrandj

Souper said:


> The fideicomiso is not a lease, calling it one does lead to some confusion for others.
> It is a bank trust, in simple terms the bank owns the property and the foreigner owns the trust holding the property. No lease is involved, it is an ownership.


What is the application process like? Do you make monthly payments? If so, what type of down payment is required? Is there a credit check? I've looked everywhere and every site gives different info. Plus, I want to be prepared when I start talking with a real estate broker.


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## Souper

maffrandj said:


> What is the application process like? Do you make monthly payments? If so, what type of down payment is required? Is there a credit check? I've looked everywhere and every site gives different info. Plus, I want to be prepared when I start talking with a real estate broker.


The fideicomiso (bank trust) has nothing to do with financing your property, it is the legal way for a foreigner to own property in the restricted zone. The bank trust is paid annually to the bank, there is no credit check.

There are many sites that explain the trust, here is one Fideicomiso - Bank Trust - Mexican Real Estate - Mexico Constitution - Mario Restrepo

It is my understanding financing is now more available in Mexico, but it is still uncommon, if you are planning to finance you should investigate that first.


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## tommygn

To clear some air, The fidiecomiso and the mortgage are not related, and independent from each other.

On the financing terms, every bank has different requierements, basically the most important one will be proving income at least 3 times payment. Just go to any bank, it is not uncommon as you may think. 80% of homes now purchased in Mexico are financed.

As always, remember to compare, and remembar that the rates are higher in Mexico. Also, remeber that if you are percieving income in Mexico, and declaring your taxes, the real interest (interest rate less inflation) in mortages is 100% deductable.


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## mickisue1

tommygn said:


> To clear some air, The fidiecomiso and the mortgage are not related, and independent from each other.
> 
> On the financing terms, every bank has different requierements, basically the most important one will be proving income at least 3 times payment. Just go to any bank, it is not uncommon as you may think. 80% of homes now purchased in Mexico are financed.
> 
> As always, remember to compare, and remembar that the rates are higher in Mexico. Also, remeber that if you are percieving income in Mexico, and declaring your taxes, the real interest (interest rate less inflation) in mortages is 100% deductable.


Could you give an example of how one computes interest less inflation? I realize I haven't had my tea yet, but my mind went blank on that explanation.


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## tommygn

Sure.

Supose the interest rate is 10%. And the prior 12 months have a composed inflation of 4.5%. 

You substract the inflation from the interest rate, we have 5.5%.

The interests caused by that 5.5% entitle you for a tax refund in that same amount.

The real interest is calculated per each payment, with the inflation 12 months prior to that one payment.

This will go as positive balance in your yearly tax statement and any surplus should be reclaimed as a refund claim and you shal recieve it within 90 days.


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## TundraGreen

tommygn said:


> Sure.
> 
> Supose the interest rate is 10%. And the prior 12 months have a composed inflation of 4.5%.
> 
> You substract the inflation from the interest rate, we have 5.5%.
> 
> The interests caused by that 5.5% entitle you for a tax refund in that same amount.
> 
> The real interest is calculated per each payment, with the inflation 12 months prior to that one payment.
> 
> This will go as positive balance in your yearly tax statement and any surplus should be reclaimed as a refund claim and you shal recieve it within 90 days.


Really. A few years ago, I was owed a refund from SAT (Mexican IRS) of around $3000 pesos. I haven't seen it yet. In contrast, IMSS owed me a refund of about the same amount once, because I paid twice (don't ask, it's a long story). The IMSS refund arrived about 6 months later.


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## tommygn

TundraGreen said:


> Really. A few years ago, I was owed a refund from SAT (Mexican IRS) of around $3000 pesos. I haven't seen it yet. In contrast, IMSS owed me a refund of about the same amount once, because I paid twice (don't ask, it's a long story). The IMSS refund arrived about 6 months later.


Well... I´ve heard mixed results on this one. Most people I know in Meixco City, who have their accounting well organized and had good and dilligent accountants have had success.

That said, I have seen first hand a few cases of years without returns...

In any case if you fight the case you will win it, it just depends on how you follow your process.


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## grotton

Maybe this was covered and I missed it but when buying a house in Mexico, what is the best way to transfer the funds from US bank (Bank of America) to Mexico to complete the transaction? We plan to open a mexico Bank account upon our arrival in September.


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## DNP

grotton said:


> Maybe this was covered and I missed it but when buying a house in Mexico, what is the best way to transfer the funds from US bank (Bank of America) to Mexico to complete the transaction? We plan to open a mexico Bank account upon our arrival in September.


Consider opening an account at a branch of BoA in Mexico. Talk to them about it. Talk to BoA in the US. too. Most important, talk to your Notario in Mexico about it. As I recall, the monies for the purchase are placed in something like an escrow account and released to the seller at "closing".

Sent from my iPod touch using ExpatForum


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## grotton

I need a little clarification on taxes paid by foreigners when selling a house in Mexico. I have been told different things on the matter. I have been told that if a house is owned and lived in for five years whether owned by a Mexican national or a foreigner, the sale is not taxed. I have also been told that any house sold by a foreigner is taxed at 25% of its value regardless of how long it has been owned and the person who told me this also insisted it was paid on the total sales price, not just the capital gain which sounds strange. A third person advised me that there is not tax paid on the sale of the house after five years and suggested that I purchase the house either entirely in my name or entirely in my partners name because then we can purchase a second property in the other persons name and avoid taxes on two properties (sorry if I'm being confusing.) Do the rules change from state to state or are they consistent country wide?


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## Souper

What did your notario tell you?


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## makaloco

My understanding is that individual notarios have quite a bit of discretion in determining if a foreigner is exempt from the tax. Some sources say a home with market value under about $250K USD is exempted. Others say $500K. A couple of years ago, enforcement was tightened, so that in most cases the home has to be _lived in for five years as one's primary residence_. Some notarios are interpreting that as the owner holding FM2/Inmigrante status or equivalent. With the new immigration law (and new government officials), it's unclear what will happen.

I believe there are two options for the taxation basis. One is a percentage of sale price, and the other a percentage of the difference between purchase price and sale price. If you've made improvements to the home, they have to be documented with facturas, "manifestación de obra", etc. Here's an article from a couple of years ago that may help:
Mexico Cracking Down on Capital Gains Tax


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## cuylers5746

*Quick guide to Foreigners buying property in Mexico*

Hi Tommygyn;

Just a quick question? Can a foreigner now buy property within 40 meters of a navigable waterway or lake?
That used to be in the old law from back in the 1970's. Has that now been removed?


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## TundraGreen

cuylers5746 said:


> Hi Tommygyn;
> 
> Just a quick question? Can a foreigner now buy property within 40 meters of a navigable waterway or lake?
> That used to be in the old law from back in the 1970's. Has that now been removed?


Within 50 km of the coast or 100 km of a land border, foreigners are not allowed to buy property. It is kilometers, not meters, but maybe you knew that and just mistyped. Within those distances foreigners can get a bank to hold the property in trust for them. It is called a fideocomiso. Having a fideocomiso is like owning, you just have to pay the bank a maintenance fee to hold the trust for you. They are long term, I don't know exactly how long.


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## djscottyis

I bought land within 50 kms of beach federdal zone from a company call Merida Realty. we had to set up a mexican corporation but it went through with out a hitch. Our properyy is now been started to be built. So viva la mexico. there website is very help full


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## ranchocostaverde

TundraGreen said:


> Within 50 km of the coast or 100 km of a land border, foreigners are not allowed to buy property. It is kilometers, not meters, but maybe you knew that and just mistyped. Within those distances foreigners can get a bank to hold the property in trust for them. It is called a fideocomiso. Having a fideocomiso is like owning, you just have to pay the bank a maintenance fee to hold the trust for you. They are long term, I don't know exactly how long.


The terms last 50 years and can be renewed in the last year of each term.


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## miltiano32

djscottyis said:


> I bought land within 50 kms of beach federdal zone from a company call Merida Realty. we had to set up a mexican corporation but it went through with out a hitch. Our properyy is now been started to be built. So viva la mexico. there website is very help full


How long did it take to set up your Mexican corporation? I have read in other sources it takes from 1-3 months

Just seeing how your own experience was with this type of thing.


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## sparks

>>>> I have read in other sources it takes from 1-3 months

That is blindingly fast for almost anywhere let alone Mexico

Time to drop the instant gratification ???


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## miltiano32

sparks said:


> That is blindingly fast for almost anywhere let alone Mexico
> 
> Time to drop the instant gratification ???


The universe works in mysterious ways.  On a lighter note, it was what I read from the sources when I was doing my research but of course not all sources are factual. I merely typed "starting a corporation in mexico" using Google.

Which is why I asked the question to see how his own experience was with the process. 

I'm aware of how slow things are in mexico I was born in michoacan, so when I was reading through those sources it appeared fast even to me and my "instant gratification" so i wanted to cross reference. :sorry:


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## Howler

*US Bank Financing?*



tommygn said:


> Just go to any bank, it is not uncommon as you may think. 80% of homes now purchased in Mexico are financed.
> 
> As always, remember to compare, and remembar that the rates are higher in Mexico.


Is it possible to get financing from the US for Mexican property? If so, where are the taxes paid to - the US or Mexico?

How would a US mortgage compare with a Mexican mortgage. I ask this based on my veteran status, which makes it easy to buy a house in the US for little or no money down as long as I meet the income, credit & debt requirements...

Thanks for the great information!! :clap2:


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## sparks

A Mexican mortgage (if you qualified - you won't) would be 30-40% down. The only reasonable payment system here is if you have a job that qualifies you for an Infonavit house or Condo. They do have Condo properties in larger cities.

Advise is to keep on renting ... or build your own over time


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## Howler

sparks said:


> Advise is to keep on renting ... or build your own over time


This is what we have discussed more as a simplified solution to having the home we would like until we select a place to live. I would rather not have a mortgage to bother with if we have the patience to build it over time. In the long-run, it may be cheaper to keep renting anyway...


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## mickisue1

Just my opinion But it's better to rent for at least 6 months to a year at first. You don't want to find yourself owning property in a place you don't love so much, after all.

And you may find that the idea of living in one place, when not tied to a job, is no longer appealing, and the idea of moving every year or so is suddenly attractive.


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## sparks

>>>>>> and the idea of moving every year or so is suddenly attractive.

hey ... I'll be 70 this year and ain't movin' every year no matter what the pay


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## DennyDaddy

djscottyis said:


> I bought land within 50 kms of beach federdal zone from a company call Merida Realty. we had to set up a mexican corporation but it went through with out a hitch. Our properyy is now been started to be built. So viva la mexico. there website is very help full


Hello...

I was going to do the Mexican corporation myself here at Rocky Point, instead of a bank trust on the place I wanted to buy also!
But I was informed that in a Mexican corp I had to do monthly corporate Mexican income fileing plus the corporate land could not be my resident. Also, I was told if I kept listing zero income for 5 years or so the Mexican state or city will adit me! Since the tax forms are in Spanish, I was told I would need a Mexican accountant to file the monthly statements.

So, you did not say you had a business! 

DD


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## DennyDaddy

Souper said:


> The fideicomiso (bank trust) has nothing to do with financing your property, it is the legal way for a foreigner to own property in the restricted zone. The bank trust is paid annually to the bank, there is no credit check.
> 
> There are many sites that explain the trust, here is one Fideicomiso - Bank Trust - Mexican Real Estate - Mexico Constitution - Mario Restrepo
> 
> It is my understanding financing is now more available in Mexico, but it is still uncommon, if you are planning to finance you should investigate that first.



My friend here at Rocky Point just got his "Bank Trust" and the price he paid here for the bank trust was $9500.00! Don't know if bank trusts cost less in different areas of Mexico! Prior to the new imm resident change starting last January the price here was around $5500 for a bank trust! The yearly fee they have to pay the bank for the trust is approx $450.00 per year.

Also the change in the law for buying property is it has to or the cost of the property has to not be stright cash, but has to have a paper trail for the Mex gov!

The new law that we hope will go thru is in the areas of US border and ocean or lake areas we can get title to without a bank trust, but we have to live in it! I wonder if its ties into the new imm visa law where couples needs approx 2900 a month proven monthly income for a perm res visa. So I am wondering that when it goes thru that we can get title, in restricted zone, do we need to meet the new income law and perm visa to get this fee simple title..........

Just another waiting came and mex gov vote to wait and see if it happens.

DD


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## frankjacobi

*Real Estate in Mexico*

I went with my wife to Mexico last year on holidays and found that the real estate market is much better. In my view the better place to buy property is Mexico’s Southern California, Los Cabos which is also the Baja peninsula´s popular and quite expensive destination. Their currency is pesos and need some research to check for the prices of properties there!


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## mickisue1

sparks said:


> >>>>>> and the idea of moving every year or so is suddenly attractive.
> 
> hey ... I'll be 70 this year and ain't movin' every year no matter what the pay



Heehee.

I'm *only* 62, and right now, the idea of spending an extended period of time in various places, to really experience the day to day life there, is intriguing to me.

Who knows how I'll feel in a few years, though?


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## GARYJ65

frankjacobi said:


> I went with my wife to Mexico last year on holidays and found that the real estate market is much better. In my view the better place to buy property is Mexicos Southern California, Los Cabos which is also the Baja peninsula´s popular and quite expensive destination. Their currency is pesos and need some research to check for the prices of properties there!


There are many "better places" to buy property: Los cabos, cancun, zapopan, QUERETARO, among others that have very good added value


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## sparks

mickisue1 said:


> Heehee.
> 
> I'm *only* 62, and right now, the idea of spending an extended period of time in various places, to really experience the day to day life there, is intriguing to me.
> 
> Who knows how I'll feel in a few years, though?


Hey ... I love to travel and can take trips from here. After I recover/catch up with a bit of my house building cost there is much of Mexico to "visit"


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## Longford

mickisue1 said:


> I'm *only* 62, and right now, the idea of spending an extended period of time in various places, to really experience the day to day life there, is intriguing to me.


Traveling through Mexico in a motorhome or travel trailer is an option some expats have found enjoyable/fulfilling.


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## mickisue1

Longford said:


> Traveling through Mexico in a motorhome or travel trailer is an option some expats have found enjoyable/fulfilling.


I agree. But for me, I'd rather land in a place and live in a house or apartment for 6 months to a year, than live in a motorhome. It may have to do with the way too many nights spent in hotel rooms before I started working for myself, but even if only for a few months, I prefer a feeling of permanence, to being a vagabond.


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## Longford

mickisue1 said:


> I prefer a feeling of permanence, to being a vagabond.


You won't get what you're looking for moving every 6 months to a year ... in an apartment/house, or in a motorhome/travel trailer.


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## mickisue1

Ah, but you're speaking to a woman who moved, with four kids, three times in two years.

Having a place that stays still (heh) and I can put my own things in, even if just a few family photos and my clothes in the closet, and being able to be there long enough to learn the name of the people at the mercado (or market, as the case may be) makes a big difference. For me, anyway.

I've moved a lot, and I've stayed put; we've been in this house for over 13 years. And I'm getting itchy to move, you know?


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## kcowan

You can choose to live in furnished apartments for 6 months. The feeling of connection to the locals pervades Mexico so it is better to focus on other aspects of the experience that may make a difference to your happiness.


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## Isla Verde

kcowan said:


> You can choose to live in furnished apartments for 6 months. The feeling of connection to the locals pervades Mexico so it is better to focus on other aspects of the experience that may make a difference to your happiness.


Even in friendly Mexico, it takes a heck of a lot longer than six months to create real connections with people in your neighborhood.


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## kcowan

Isla Verde said:


> Even in friendly Mexico, it takes a heck of a lot longer than six months to create real connections with people in your neighborhood.


I have to ask where you live?

Certainly in PV you can gain an insight into your neighbourhood in that period. It is better than living in a ****** enclave...


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## Isla Verde

kcowan said:


> I have to ask where you live?
> 
> Certainly in PV you can gain an insight into your neighbourhood in that period. It is better than living in a ****** enclave...


I live in Mexico City in a pleasant, middle-class neighborhood with almost all Mexican neighbors. I've lived here for over 5 years. You can feel comfortable here after a few months, of course, but to really get to know people beyond a smile and a _buenos días_ in passing, it takes a lot longer than that. I speak as someone with an excellent command of Spanish and quite a bit of insight into Mexicans and Mexican culture, who's been coming to Mexico since 1966.


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## kcowan

We find PV more welcoming, maybe because it is a smaller town. But yes the relationships tend to deepen with time. DW never connected with her neighborhood in DF in 8 years but it was upper middle so maybe less welcoming.

I wonder what other smaller towns are like?


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## Isla Verde

kcowan said:


> We find PV more welcoming, maybe because it is a smaller town. But yes the relationships tend to deepen with time. DW never connected with her neighborhood in DF in 8 years but it was upper middle so maybe less welcoming.
> 
> I wonder what other smaller towns are like?


I wouldn't feel a part of the community if I lived in an upper-middle class neighborhood either  .


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