How do I acquire a property in Mexico?
Due to article 27 of the Mexican constitution,
foreign cannot acquire a property 50 km near
the coastlines and 100 km near the
borderlines unless they constitute a trust with
a bank Mexican entity. This is called the
restricted economic zone.
What is the process for acquiring a property in Mexico?
First, the parties must sign an offer which
states the conditions regarding to which unit
will be sold and how the consideration must
Second, it is recommended to count with a
real state attorney, so they can coordinate the
draft of the agreement and the specific
conditions regarding the transaction.
In third place, its necessary to fille for a permit
to the foreign affairs relations office to
constitute the trust, and they take about 3-6
Once this is completed, the parties shall send
all the requested information to the notary so
they can finish the draft of the public deed,
and it must be approved by the trustee
Once the public deed has been executed
(when the parties have signed), the notary
must register it into the public registry of
property, and they take about 3 months for
issuing a document called “Boleta de
Registro”. This is necessary due to Quintana
Roo ́s constitutive effects, which make
mandatory for all public instruments issued by
a notary public to be written down into the
public registry in order to be valid.
Nevertheless, for any operation, you ́d like to
perform in the meantime, such as hiring your
electricity or water supplies, you can ask the
notary for a certified deed copy, and you will
be able to use the property with no problem.
Which Banks are recommended to
constitute a trust?
You could work with a large list of banks,
nevertheless, the recommended is to work
with banks that are specialized in trusts, the
most recommended are Bank of BAJIO, Banco
Inmobiliario Mexicano and MONEX.
What does the bank do?
For a foreign to acquire a property in Mexico,
its necessary to constitute a trust with a
bank, in which case, the bank only holds the
property ́s title, they cannot act without the
main beneficiary ́s instruction.
The client could choose whichever bank to
constitute the trust, but it’s better to work
with banks that are specialized in trusts, such
as BAJIO, BIM, MONEX, the timing, and prices
The benefits of working with these banks
are the prices, which, for the constitution of
the trust, the foreign affair relations permit
and the first annual fee consists in 2,000.00
dollars and the annual fees could go from
450.00 – 700.00 dollars, depending on the
The term for the foreign affair relation offices
to issue the permit, to constitute a trust, is from 3 – 6 weeks.
The costs for constituting the trust must
be verified at the moment of acquiring
the property since they get adjusted
once each year.
How does the figure of the notary public work?
The notary is a lawyer that works as a third
impartial party, due to the public faith he is
involved with, his job is to ratify public
documents and he cannot get involved in
negotiations regarding the conditions of the
real estate transactions, that is one of the
reasons it is recommended for the parties to
have their own real state attorney.
The fees for the notary are based on
governmental tariffs. The parties choose the
notary depending; to the seller, the fiscal
strategy the notary offers; to the buyer, the
the certainty that the operation is being managed
Can I constitute a trust with a foreign
It depends on the bank policies, but it is
possible. For example, banks accept figures
such as LLC / LTDs, they need a series of
documents which shall be notarized and
apostilled in the same state they were
issued, and translated. These documents are:
- a) Documents of incorporation
- b) Bylaws
- c) Certificate of good standing
- d) Operating agreement
- e) Tax ID from the company
- f) Granted power to a legalrepresentative
- g) Proof of address from the company
- h) IDs from the legal representative
(Passport, drivers license and proof of
There are some other figures that the banks
do not accept, such as a foreign trust, it
cannot be the beneficiary for a Mexican trust.
Finally, it is not necessary to constitute a
Mexican company, the idea for this is when
the client has several units and is receiving
profits from it, this would be easier to avoid
paying several trust fees but it’s not
What are the operating costs of running a property in Mexico?
The property tax is paid once a year and the
services the owner hires, such as water,
How do the income of vacation rental works?
Normally owners hire an administrator, it is no
necessary to open a Mexican account for the
income. It depends on the agreement with the
administrator, but normally, the
administrator pays all the bills for the
property charges his fee and transfers the
remaining amount to the owner. In this case,
since the owner isn ́t receiving income in a
Mexican account, the only taxes he ́ll need to
pay are in the country/state where he is
receiving the incomes, for example, the owner
will pay taxes in Texas if the bank account is in
What is the process of selling a property
which its title is being held within a trust?
If a foreign sell to a Mexican, the trust gets
extinguish and they celebrate a public deed at
the buyer’s name.
If a foreign sells to another foreign, they will
execute an assignment of trust rights before a
public notary and the deed must be approved
from the bank.
What happens to my trust if I pass?
In order for the trust to be constituted, it is
mandatory to point a substitute beneficiary,
who ́s the person who will acquire the trust
rights by means of a process that ́s called
“substitute beneficiary recognition” and the
bank will require the paperwork from the
passing apostilled or legalized and translated.
Do I have to be present for the execution of the public deed?
You can designate someone by means of a
How much taxes I would pay for the sale of a property?
The regular basis 35% as for the capital gains
taxes, never the less, this percentage could be
significantly reduced with a fiscal strategy
normally elaborated by a public corridor. The
strategy could help you to reduce by 70%.
How does it work to acquire a property
through an internal assignment of rights?
This is possible when the promissory buyer
acquirees the right to a property regarding a
pre-construction development, and once the
property is ready for being the object of a
public deed, the promissory buyer notifies the
developer their wish to assign the agreements
rights to a third party, which is the new buyer
in this example.
Depending on the developer and the
conditions of the agreement, the developer
could charge a percentage of that sale, but it
has no actual taxes implications to the
promissory buyer, since the property was
never object to a previous deed.
Can I invest in Mexico through a foreign investment figure?
It depends on the Mexican bank policies, but
there are some figures, such as the 401k, that
basically works like a “savings account” and
eventually converts into a “retirement fund”,
and specifically, the 401k allows you to invest
from your retirement fund in Mexico, having
the benefit of lower taxes. For having a better
advice on your 401k plan, it is recommended
to consult a real state attorney to review all
the particularities on the subject.
Is it possible to know the exact costs of
acquiring a property?
Costs depend on several factors, the notary
fees, and taxes, for example, depending on the
municipality the property is located on. It is
necessary to review each case.
What happens if I´m not able to sign the
documents in Mexico?
The documents for closing can be sent
through package services, the documents
must be notarized and apostilled. The
apostille process depends on where the
client is located. It is necessary to review