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Foreigners are legally authorized to own property in Mexico.
Unlike other countries, Mexico has a special legal regime for foreigners who wish to acquire a property on the beach or on the national border.
We give you all the details that you should know in legal matters so that you can safely buy an apartment, a house, land or even a commercial space.
If the property is located with in 100 km of the border and 50 km of the beachfront, it is necessary to establish a trust that, in all cases, will be carried out in a public deed. Generally, the notary public coordinates this operation with the fiduciary institution.
A trust agreement is created for the benefit of the foreign Buyer. The bank has a fiduciary obligation with the owner. The owner reserves all property benefits and has the legal right to lease the property, sell the property, and / or inherit the property to his own.
The trust has the advantage provided by a clause for hereditary purposes. In case of death of the holder, it will not be necessary to carry out any type of dilatory trial that, in most cases is expensive. Automatically, and through a public deed, the ownership of these rights will be transmitted in favor of the beneficiaries who were appointed at the time as listed on the fedeicomisio.
Trusts are documents valid for 50 years now. They can be renewed at the end of this 50-year term for an additional 50 years. There is no limit to the number of times the trust can be renewed.
The trust can be extinguished (canceled) at the time the owner decides, either because he acquired Mexican nationality or simply because he decides to sell the property.
Foreigners may also own property as a shareholder of a Mexican Foreign Owned Company. Our Mexican lawyer can help you create and establish a Mexican Company and legally register it with several government entities. The Mexican Foreign Property Company must report income and activities monthly through a certified and qualified accountant.
The Company requires a minimum of 2 (two) individual live shareholders. These shareholders must be at least 18 years old. The chief officer of the corporation is required to have an FM-3 Visa. You can apply for your Visa at the Mexican Migration offices, it is best to hire a lawyer to handle the process for you, since this procedure may require waiting for several return visits and most of the government office workers do not not speak English.
The current cost of establishing a trust is approximately $ 3,500 – 5,000 USD, and the annual fee charged after the second year is currently around $ 600 to 1,000 dollars. This covers the cost of the government trust permit, bank opening fees and one year payment. Charges may vary from bank to bank, and the annual maintenance fee depends on the value of the property.
The costs of forming a corporation vary from $ 1,800 to $ 3,500 USD. You can own a larger property of 2000 meters with a FOMC. The Mexican government currently requires monthly taxes, so plan to pay a Mexican accountant about $ 50 to $ 100 USD per month. It is also important that the main officers of the corporation apply for and obtain a work visa from the Immigration Department. We recommend legal assistance.
For all this we have a law firm that will provide you with quality professional services
Historically, in Mexico, properties have been paid in cash.
Recently, some banks and other lenders in the United States have begun offering financing to Americans and Canadians. The house that is bought in Mexico is the guarantee for the loan. If you are thinking of buying your home in the Yucatan Peninsula through a mortgage, you must obtain prior approval before looking for a home.
Please understand that it is extremely difficult to obtain financing and that the procedure is long and time consuming and the result is not certain.
In Mexico, it is customary for the real estate lawyer to prepare a contract (Promise of Sale) that is signed by you and the seller, detailing the details of the transaction. This is done after the title search, and after checking that there are no existing liens or other problems with the title. The deposit or escrow, is 10% of the purchase price is then paid directly to the seller to secure the sale scholarship. In the event that by default, for any reason, they have to return the money in addition to having to pay the fee or penalty where appropriate. Mexican legislation protects under this legally binding agreement.
If you are not going to be in Mexico for closing, you do not worry we can represent you or anyone of your choice, with limited power of attorney especially for this transaction only.
In Mexico, most of the closing costs are paid by the buyer, including the cost of forming his trust or corporation. These costs are the value of the property that may be lower than the actual sale price. There is a 2% – 3% transfer tax, plus attorney fees that generally reach 2% – 3% of the appraised value of the property.
Real estate commissions are generally paid by the seller, unless you have retained and chosen us as the Buyer’s Broker. Commissions are 6% of the sale Price for existing homes and usually 10% for raw land.
The time to form a corporation is usually several weeks. The formation of a trust may take 30 days or more, since a permit must be obtained. If the property is already in an existing bank trust, which will speed up the process and will cost a little less than about $ 2,500 to replace your name in Bank documents, plus closing costs. However, in the case of historical properties, it may take a long time to close, since the documents are very old and the title has not been transferred or may have been a long time in the middle, and there may be inconsistencies that should be corrected before depositing a permit. If there is an inheritance that is involved, the courts move very slowly in Mexico, and you could not predict how long it may take to close.
As in any transaction for the sale of real estate, taxes, expenses and notary fees will depend on various elements, such as the value of the operation or the cadastral value.