Buying property in Mexico as an American

Americans can buy and own property in Mexico, including on the coast. The process differs from a US purchase in three ways: who holds title near the coast and borders, who runs the closing, and how much checking falls to you.

Can Americans own property in Mexico?

Yes. How you hold it depends on where it is:

• Inland, a foreigner can hold title directly, the same as a Mexican citizen.
• In the restricted zone, within about 50 km of the coast or 100 km of an international border, a foreigner holds residential property through a bank trust (fideicomiso) or, for some commercial uses, a Mexican corporation.

Most beach towns, all of Baja California and much of the Yucatán coast are in the restricted zone.

How a fideicomiso works

A Mexican bank holds legal title as trustee, and you are the beneficiary. In practice you have the rights of an owner:

• You can live in the property, rent it out, renovate it and sell it.
• You name heirs in the trust, so it passes to them without Mexican probate.
• The trust lasts 50 years and can be renewed.
• The property is not an asset of the bank and is not exposed to the bank’s creditors.

Setting up the trust involves a permit and a one-off fee, and the bank charges an annual fee for as long as the trust runs.

The steps in a purchase

1. Offer and acceptance. Usually a written offer through an agent, then a purchase agreement (contrato de promesa) with a deposit, often held in escrow.
2. Due diligence. Your attorney checks title, liens, taxes, utilities, permits and whether the land is private property.
3. Trust permit, if the property is in the restricted zone.
4. Closing before a notario. A notario público is a senior lawyer appointed by the state. They prepare the deed, calculate and collect the taxes, and register the sale. The notario is neutral and does not represent you.
5. Registration in the public property registry.

A purchase typically takes one to three months.

Costs to expect

Closing costs for the buyer commonly total several percent of the price. They include the acquisition tax, notario fees, registration, the trust setup if needed, and an appraisal. Ask for a written estimate before you sign the purchase agreement. Annual property tax (predial) is low by US standards.

When you sell, capital gains tax can be significant, and exemptions depend on residency and paperwork. Keep every official receipt from the purchase and from improvements.

What to check before you buy

• Ejido land. Some land is communally owned and can’t be sold to you with normal title unless it has been formally converted. Buying ejido land is the most common way foreign buyers lose money.
• Title and liens. Ask for a certificate from the public registry showing the owner and any debts against the property.
• Pre-construction. Check that the developer owns the land, has permits, and what happens to your deposit if the project stalls.
• Agents. Real estate agents are lightly regulated in most of Mexico. Use one with references and a professional association membership. See real estate agents in Mexico.
• Your own attorney. Hire one who is independent of the seller, the developer and the agent.

Rent first

Most people who move to Mexico successfully rent for six months to a year before buying. It tells you whether the town, the neighbourhood and the climate suit you in every season. See the best places to live in Mexico for how the main areas compare.

Common questions

Can Americans buy property in Mexico?

Yes. Americans can own property anywhere in Mexico. Inland, a foreigner can hold title directly. Within about 50 km of the coast or 100 km of a border, a foreigner holds residential property through a bank trust called a fideicomiso.

What is a fideicomiso?

It is a trust in which a Mexican bank holds legal title to a property for your benefit. You can live in, rent out, improve, sell or bequeath the property. The trust runs for 50 years and can be renewed, and the bank charges an annual fee.

Do I need to be a resident to buy property in Mexico?

No. Visitors can buy property. Owning property doesn't by itself give you residency, though property above a set value can be one way to qualify for a temporary resident visa.

Can I get a mortgage in Mexico as an American?

It is possible but uncommon. Financing for foreigners is limited and interest rates are higher than in the US, so most foreign buyers pay cash or borrow against assets at home.