Americans are allowed to purchase land in Mexico under the Mexican Foreign Investment Law, which promotes national and foreign investments in Mexico. Foreigners can make direct land purchases anywhere except the restricted zones that are within 100 kilometers of the U.S./Mexican border and 50 kilometers from a coast. Owning land for non-residential purposes in the restricted zones is possible, but requires special permission and establishing a bank trust called "fideicomiso."
Things You'll Need
- Real estate company
- Lawyer for buyer (Mexican)
- Notary public
Find a reputable real estate company by checking their credentials with the American embassy or consulates in Mexico. Search for available properties you'd like to purchase. View the property you are interested in purchasing. If you are directly purchasing an interior property, work with your bank and the real estate company to acquire the property. Set a verbal price agreement, draw up a detailed sale agreement and put down a deposit. Set any contract withdrawal penalty charges.
Hire a Mexican attorney to negotiate the paperwork and terms of the transaction. Though real estate transactions are similar in Mexico and the U.S., they are not the same. Foreign buyers should use Mexican professionals, since a U.S. attorney is not legally allowed to practice law in Mexico. The attorney will have connections for a notary and other services you need to complete your sale.
Secure a Mexican Notary Public. This is a requirement. These are legal professionals appointed by the Mexican state government to certify the authenticity of any legal documentation, like a title deed to a property. Do every official transaction of your property purchase with your Notary Public in order to avoid fraud.
Apply for mortgage financing. Mexican banks offer loans in pesos; a few with international affiliates will offer cross-border loans in U.S. dollars. Some U.S. banks and mortgage companies will allow you to finance in pesos and compute the charges of the rate exchange. Check with your intended bank before agreeing on a currency. Many transactions are done in cash, but any amount $10,000 and up must be declared on a special customs form when you enter Mexico.
Acquire a permit from the Ministry of Foreign Affairs before entering into any property contracts. Then, establish a trust with the bank, a fideicomiso, to be your title holding agent for the property in Mexico. Through this trust, the bank is the title owner of the property, but the beneficiary (foreign buyer) has rights to use and develop the land and any of its fruits. No citizenship rights are granted to foreigners because of property ownership and any development of the property must follow Mexican laws.
Get copies of the property deed, make an appraisal arranged through your notary public and prepare your required fees---including property taxes, trust set-up fees, professional fees, appraisal fees and registry fees. These fees and the sale price are payable at the time you sign the title in the Notary Public's office.
Tips & Warnings
- Check the credentials of your Mexican lawyer by viewing his license (cédula professional) which should contain an account/license number and photo.
- The paperwork in Mexican real estate transactions is similar to U.S. paperwork.
- Mexico does not have regulated real estate practices, so it is safest for foreign buyers to use real estate and legal professionals to complete legitimate property sales.
- Don't get caught in time-limiting contracts before the bank has released the mortgage funds to you for the purchase of your property.
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