HOW TO BUY A PROPERTY IN MEXICO

It is legal and even encouraged for foreigners to own property in Mexico. The bulk of the country is outside the “restricted zones” which is 50 kilometers (about 31 miles) from Mexico’s shorelines and 100 kilometers (about 62 miles) from international borders, here foreigners are able hold direct deed to property with the same rights and responsibilities as Mexican nationals.

Within the restricted zone, buyers can acquire real estate using a legal document called a Fideicomiso Trust.

The instrument known as the Fideicomiso Trust is a long-term irrevocable bank trust established for foreign buyers. A Mexican fiduciary bank holds the title to the property and cedes the rights to own and occupy, remodel, sell, give away or will to heirs to the named buyer or buyers. This is not a lease but a renewable trust held for 50 years by the Mexican Government.

The Fideicomiso Trust is privately held in an authorized Mexican bank in order to act as a trustee. These trusts are not assets of the bank, and banks are not allowed to take any action without written instruction from the beneficiary of the trust. The buyer retains the right to exercise any legal right under law.

As the beneficiary, the foreigner has equitable interest in the property through any market variations that may occur, any equity or the loss of equity accrues to the holder of the trust, not to the bank.

During the actual sale at the office of a notary, the new foreign owner may assign his or her beneficial interest in the trust to the new buyer. The new owner may wish to establish a new bank trust where he/she is named the primary beneficiary, which the notary is easily able to do.

In many countries the concept of a long-term irrevocable bank trust is a standard legal instrument. This means that buying through a fideicomiso is a secure way to purchase property. Your property is not a bank asset so even if the bank enters into bankruptcy, your property will not be considered a bank asset and will be safe. The buyer has all the legal rights of a property owner meaning that they can sell, renovate, or rent it out as they please.

These sites, inmuebles24.com.mx , lamudi.com.mx, Icasas.mx, are all real estate apps that work in Mexico and can help you find good properties for sale or rent. Each of these sites have some shortfalls but their developers are working on them and they continue to improve.

The best solution is to use these apps in conjunction a reputable real estate agent who will help find the perfect investment property, home, vacation or commercial property.

Buying property in Mexico, as in any country, is a major investment that requires patience, energy, planning, and professional help. Developing a good relationship with a local realty agent can help you get a broader understanding of the market and make informed choices about your purchase.

A real estate agent, and the agency they work with, is part of the professional team you can rely on when you’re looking for a property to buy. By finding a good real estate agent and investing time cultivating a good working relationship with that person, you will gain access to a great deal of local knowledge, insights, experience, and market intelligence that you would find hard to come by without the help of an agent.

When you look for a real estate professional who can help you find your ideal home or investment property in Mexico, you need to find an agent who has an excellent understanding of the local area you are buying in. The agent should, ideally, have several years of experience in the business and live and work in the area they represent (the best ones always do). They should have an in-depth understanding of the area and its neighborhoods and ideally should also own a home in the area. Most agents who interface with foreign buyers in Mexico are bi-lingual (English and Spanish) and some are multi-lingual.

Ask about how the agent learns of new properties that come to market, how many owners they represent directly, and how many properties they represent through third parties or local networks they are affiliated with. When you’re a buyer, the finest agents will work in your best interests, offering properties which they have own their lists, but also properties listed by others, recognizing that another agency may have a property listed that better suits your lifestyle needs. You will be able to gauge how engaged they are in your interests by observing what questions they ask, and how they respond to your answers and requests.

There is no comprehensive MLS in Mexico. In some parts of Mexico there as regional MLS but it doesn't list everything in the region and it is not everywhere. As such, you have to search individual sites that provide listings in the areas in which you are interested in buying.

There is no comprehensive MLS in Mexico. In some parts of Mexico there is a regional MLS but it doesn't list everything in the region and is quite limited.. You’ll need to search individual sites to see all of the listings in the areas you have interest in.

Most states within Mexico assess a tax on the acquisition or purchase of real estate that is a percentage of the value of the property. The fee is typically between two and six percent of the actual purchase price, depending on the state where the property is located. In states where the tax is higher, this can represent the bulk of closing costs for buyers of real estate in Mexico.

This specific tax is paid as part of the purchase and is owed to directly to the jurisdiction at the moment the property ownership is transferred in the official records of the federal government.

If you are purchasing a property using an NFT, there is no cost.

If you are purchasing a property without using an NFT, things become more expensive. The setup fees for a fideicomiso will be approximately $1750 USD, with about $650 USD going to the bank, and the remainder going to the Mexican government.

In addition to the setup fee, the fideicomiso costs for yearly maintenance is $650 USD per year.

Plano Settlement is free for Buyers. The only other costs you may incur are costs to find the property, consultants you may engage as part of your due diligence, and legal counsel to ensure all goes well. A good real estate broker can help these expenses to a minimum.

Local real estate tax is called Predial, and it is payable yearly. On average, the Predial is 0.1% of the assessed value of the particular property at the time of sale and is unchanged throughout the period of your ownership. This rate is a fraction of the cost in the USA.

Mexican property taxes vary from state to state, and are calculated yearly depending on the real estate value established by the officials. Residential property tax is typically around 6.5 pesos per 1000 pesos of assessed value. For commercial and rental properties used only seasonally, the rate can be twice as much. This rate is also affected by location and accessibility. A property owner can file a request to the tax department for a lower rate if applicable.

As part of the purchase, the Plano Settlement application will calculate and collection funds for all the taxes and fees due to the buyer as part of the purchase. If you are purchasing without an NFT, these will be Acquisition tax and optionally the costs to create a fideicomiso, if one is required. When purchasing with an NFT, these costs will typically be free and so no extra amount is collected.

Financing is available for citizens of Mexico, the USA, Canada, the UK and Spain.

There are financial institutions which work locally and have been improving the quality of service, speed of the transaction and lowering the interest rates to attract more buyers.

Interest rates are higher than most countries because it really is a niche market as opposed to elsewhere, and the paperwork is more cumbersome as well. Loans are only typically available on homes in good condition and not available for houses that need remodeling. The number of loan providers seems to be changing all the time and many companies haven't been around very long.

Because of the international nature of the sale, buyers and sellers will often want to pay and receive funds in different currencies. The price of the sale could also be set in a different currency as well. It can get confusing once you factor in wire transfer fees and foreign exchange commission.

Plano Settlement makes it easy. You can pay either in Mexican pesos or US dollars, free and without any commission assessed by Plano. You can even mix your payments if you want to pay a portion in one currency and the remainder in another.

Plano will hold the funds buyers provide during the process and release them to the seller on the day of Closing. If the funds require conversion, it will be done on the day, using the official rate of the day. Plano relies on rate data from Chainlink.

Buyers have the option to pay using cryptocurrencies supported by Plano. If the Seller prefers to receive the funds in a different currency, including fiat, Plano will take care of the conversion. Please see a list of crytocurrencies that Plano supports here.

Yes you can. Even if the buyer is not paying in crypto currency, sellers can still receive funds in the cryptocurrency of their choice. Please see a list of cryptocurrencies that Plano supports here.

This question never has a clear-cut answer as each buyer and each seller are different, as are the current circumstances of the market. In general, a buyer in Mexico may be willing to reduce their asking price by around 2% to 8% but will want to have reasons why they should do so, rather than just because the buyer may want it that way. With that said, a buyer should always be comfortable offering what they think is fair and what they are willing to pay, a negotiation can ensue which will hopefully land at a fair price for both buyer and seller.

You can make an offer for the home you wish to purchase directly on the Plano Settlement application. You can specify the amount you would like to offer, your preferred date of closing and any other conditions you wish to include in the offer.

Your offer will be presented to the Seller directly within the application. Don’t worry about whether they are using the Plano Settlement application as they will receive and email inviting them to sign up to view the offer.

Plano uses the same Sales Contract for all sales it supports within Mexico. This agreement has been drafted by our internal legal team in an effort to be fair to both Buyers and Sellers.

In cases where you would like to ask a separate lawyer to review the Sale Agreement for the purchase, you can download a PDF of the sale contract being drafted on the Terms of Sale tab within the Plano Settlement application.

When there are exceptions and amendments to any core agreement, such as in cases where there are special conditions that must be met prior to Closing, these are added as separate exhibits at the end of the contract.

Once the terms of sale are accepted by both parties, you have a legal binding agreement that you will buy the property. If a portion of the purchase price is required as earnest money to secure the deal, you will now submit any deposit of finds into escrow. The Plano Settlement application has all details about how to do this.

Buyers may request an inspection on the property at any time. If you don't know of an inspector in your area, you can review a list of inspectors in your area that Plano maintains and contact one of them directly.

Plano provides an escrow service where you can deposit funds safely. These funds will be safely held inside a smart contact on the ethereum blockchain until the closing is complete and funds are transferred to seller. You may send earnest money in any currency that Plano supports. See the list here.

In the case where the purchase of the home is cancelled, and funds are owed to you, Plano will return them to you promptly in the currency in which you sent them to us.

With Plano, buying is simpler than using a Mexican lawyer or working through your broker. From within the Plano application, you will authorize the purchase of the property and agree to the terms of sale. Meanwhile, the seller will gather all the necessary documents on their side if they haven't already.

Once all the documents are uploaded into the application, our lawyers will get to work behind the scenes to transfer the title of the property to you. Once the legal work is complete, you will be invited to make final payment, at which point you will be able to view and download the new deed that shows you as the property owner.

Once you have authorized the terms of sale and send your deposit, it will typically take between three and seven business days to conclude the sale. This time may be affected by delays with the transfer of the fideicomiso if one exists, or by the seller if there are delays assembling their paperwork.

Notarios in Mexico are the only entities that are recognized by the Commercial and Land Registry and the taxation authority. As such, they are an essential part of the process of buying and selling real estate. Your property purchase will be completed by a notary who Plano partners with behind the scenes to complete the sale in accordance with Mexican law.

Yes you can. In fact with Plano, it is the only way to conclude the transaction. Using the Plano Settlement application, buyers and sellers will authorize Plano to conclude the transaction their behalf in the presence of the Notary.

You will be required to show documents that prove your identify and mailing address. This information will be required for all buyers of the property. If you are buying the home using a fideicomiso, you will also be required to appoint a "Substitue Beneficiary", a person that will inherit the property in the event of your death.

You can track the progress of the closing online, day or night, within the Plano Settlement application. You can also configure notifications of important milestones to be sent to your cell phone or email.

The date of the closing is clearly visible on the app. On or before that date, you will need to transfer the remainder of funds into escrow based on the instructions provided in the application. Provided funds are received, the new escrituras will be completed and funds will be forwarded to the seller. At that point, the status of the close will update within the application to "Completed" and you will be able to collect the keys to your new home. This process will complete 1-2 hours after the funds are confirmed.

Yes. If you and the seller both agree to close "as soon as possible", then there is no fixed date and the closing will occur as soon as all the legal work is completed. You can track this date online in the app so you can see how near the closing date is, so you'll be ready to send your final funds.

The real estate agent who has brokered the sale will be responsible for managing the transfer of keys and will work to obtain them at the time of the closing. The broker will be in touch ahead of time and will collect all information needed.

Your register deed/escritura will be available approximately 90 days after closing. At that time, you can request the physical original copy to be mailed to you by certified mail wherever you are.

In addition to the deed the following important documents will be available electronically:

1. El Boleto de Registro – (the Registration Letter) from the Registrar that confirms that the deed was legally registered on a specific date at a specific time.

2. A factura (tax receipt) in xml digital format (via email or delivered on a thumb drive) showing the actual amount in Mexican Pesos of the registered purchase price.

3. A factura also in xml format showing the itemized breakdown of your closing costs.

Items #2 and #3 are particularly important because they are the only documents that will be accepted to evidence your cost base as deductions from future capital gains taxes (36%) upon sale. Failure to be able to produce these digital facturas will mean that the Notary formalizing the eventual sale of your property will only be able to deduct 10% of the sale price.