Frequently asked questions

Yes!

There are legal steps to follow when buying property in Mexico as a foreigner. With our help and guidance, we keep the process simple and understandable.

In this region, foreigners wishing to buy property in Mexico need a trust agreement issued through a bank, known as a fideicomiso.

• The 1917 Constitution designated an area within 100 km (62 miles) of Mexico’s borders and 50 km (31 miles) of its coasts as subject to restrictions on foreign property purchases. Previously known as the “prohibited zone,” it is now referred to as the “restricted zone.”
• A foreigner can acquire the right to hold, occupy, use, modify, rent and sell real estate through a bank trust agreement with a banking institution, which holds legal title to the property.
• The bank holds legal title and acts as trustee, while the foreigner is the beneficiary.
• The bank must deal with the property solely for the owner’s benefit.
• The beneficiary may be a foreign individual or a legal entity such as a foreign company.
• The trust exists solely for the beneficiary’s benefit; for practical purposes, the beneficiary is the property’s owner.
• The property can be transferred by will or inheritance, used as collateral for rental arrangements, and enjoyed, rented or sold as determined by the beneficial owner.

The 1993 Foreign Investment Law went further by allowing full ownership of non-residential real estate by a Mexican corporation that may be 100% foreign-owned. This includes real estate purchased for development that may be sold to foreigners for residential use. The corporation is considered Mexican, allowing foreign investors to own the land directly through it.

• A Mexican or foreign bank can establish a fideicomiso (similar to a beneficial trust in the United States) through a Mexican bank to purchase real estate anywhere in Mexico, including the restricted zone.
• When a foreigner buys property in Mexico, the buyer selects a Mexican bank to act as trustee on their behalf.
• The bank normally obtains authorization from the Ministry of Foreign Affairs to acquire the selected property in trust.
• The trust lasts 50 years and can be automatically renewed for another 50-year period.
• During that period, you have the right to transfer title to a third party, including family members.
• The bank becomes the legal owner exclusively for the benefit of the beneficiary/buyer, who enjoys the benefits of direct ownership, including leasing or transferring property rights to a third party or heir.
• The bank ensures compliance with the trust under Mexican law, providing technical, legal and administrative oversight to protect the buyer’s interests.
• Trust properties are not treated as bank assets.
• More Mexicans are choosing a trust because it specifies who becomes the primary beneficiary in the event of death.
• The trust functions as a will for the purchased property, saving time and money by avoiding a lengthy probate proceeding, which in Mexico can take up to three years.

In addition to having the necessary funds, you must present documents to the notary when buying property in Mexico as a foreigner:

• A valid passport.
• A valid driver’s license; two forms of photo identification are generally required.
• Proof of address, either in your home country or Mexico, usually a utility bill.
• Personal information: full legal name, date of birth, address, contact details, email and phone.
• Beneficiary information: full legal name, passport copy, identification and address.
• Your Mexican CURP number, if you have one.
• Your Mexican RFC number, if you have one; otherwise a generic foreign number will be created for you.

The CURP is an official identification number assigned to Mexicans at birth and shown on their birth certificate. Mexican residents receive it on their residency card, and foreigners have it on their temporary or permanent residency document.

If you do not plan to stay in Mexico for more than six months, you do not need it.

If you plan to stay in Mexico for more than six months, it is required.

If you wish to stay in Mexico for more than six consecutive months, you will need a resident visa. The initial visa is obtained outside Mexico, so applicants must visit their nearest Mexican consulate.

If you wish to apply for a visa or change your immigration status, an online procedure is available to begin the process.

After four years, it is advisable to leave the country to apply for a new visa or convert it to permanent residency.

If you already have non-immigrant status in your first or second year, you can convert it to permanent residency or leave the country. You can apply for a change six months before it expires.

The MVPR can be requested after four years without annual renewal.

The minimum income stated for this visa is around US$2,000 per month or US$102,000 in investments per person. You will need bank statements to verify income, although immigration officials may consider combined assets, including real estate, to reach an equivalent amount. The objective is to demonstrate financial self-sufficiency.

Once you have contacted the consulate, it will provide a visa to be placed in your passport. This allows you to enter Mexico legally, and you have 30 days to present it at the local immigration office to exchange your temporary visa for a permanent resident document.

Once you have your permanent resident document, your new CURP will appear on it automatically.

The RFC is a unique tax identification number assigned to individuals in Mexico, whether economically active or not.

It can be obtained online or during a short visit to the SAT offices in Puerto Vallarta, where you can obtain your RFC to buy property.

You will need a valid passport, immigration visa and proof of address to obtain an RFC in person at a SAT office.

• All sales are completed before a Mexican notary public.
• A contract in Spanish, with a courtesy English translation, is prepared and presented for your review and signature on each page.
• If agreed with the seller, we work with closing coordinators and lawyers who facilitate the process at no extra charge to the buyer.
• We create an escrow account, costing approximately US$800, to hold the funds until closing.
• A standard 10% deposit is required to formalize the sale.
• The standard closing period is 45 days and may extend to 90 days if financing is involved.
• The remaining 90% is transferred to the trust a few days before closing.

The closing attorney prepares the documents with the notary and Public Registry. When everything is ready, we meet with the notary to complete the final signatures. At closing, the buyer receives a certified copy of the deed; the original may take up to six months to be formally recorded at the Public Registry. Once ready, the notary will notify the buyer that it can be collected.

• In Mexico, deeds, usually known as public instruments, can be found at the local Public Property Registry, which is open to the public.
• The deed must be finalized and signed by the notary public.
• It lists the parties involved in the transaction, including the notary, seller, buyer and trustee bank.
• The deed identifies the buyer.

Once the deed is finalized and signed by the notary, seller, trustee if a bank is involved, and buyer, who is also the trust beneficiary, the purchase price changes hands and the transaction is considered closed.

• In Mexico, a notary public is a quasi-governmental official who reviews the important documents relating to a property sale.
• The training, role and responsibilities of a Mexican notary differ significantly from those of notaries elsewhere in North America.
• The notary must be licensed in Mexico.

Becoming a notary public requires attending law school in Mexico, obtaining a law degree, passing the examination and being admitted to practice in Mexico. Candidates must work as apprentices with a notary for many years. A notary cannot act as the trust. The notary’s role is to ensure that the required formalities have been fulfilled. Although a notary is always a lawyer, providing separate legal advice is not the notary’s role. Any buyer or seller seeking legal guidance should hire a licensed attorney separately.

Yes, you can!

The required documents and items are:

• Passport.
• Proof of address.
• Tourist visa or FM3 provided upon arrival in Mexico.
• Three local references.
• MXN 3,000 to open the account.

We recommend Bancomer for a peso account because it offers fully bilingual service for foreigners through its preferred-client section and has experience with property owners and renters who are not here year-round. It provides a gold card that can help avoid lines at branches. Benefits include paying bills online, writing checks in pesos, setting up monthly bill payments, checking balances and making payments online while away. Booking a bank appointment is recommended because it can be busy. To avoid a fee, we recommend maintaining at least MXN 3,000 in the account.

• The simplest answer is yes: if you earn money, you must pay taxes.
• Yes, if you are not a resident or do not pay taxes in Mexico; a valid permanent resident visa or Mexican voter identification and bills in your name are needed as proof of address.

To determine the gain, however, costs and expenses are deducted from the amount for which the property was officially sold:

• The original land cost and depreciated construction value, based on the property’s age and inflation adjustments according to consumer price indexes.
• Additions, modifications and improvements to the construction, but not maintenance, adjusted as described above.
• Commissions paid by the seller to the real estate agent and broker.
• Closing costs, including expenses and taxes paid by the seller. The notary withholds the calculated amount after deductions and remits it to the Mexican tax authorities. The seller must deduct this amount on their annual tax return, where it becomes an adjustable tax credit in the United States.

To help ensure you pay what is due without overpaying, we work with tax attorneys who help us keep the process legal and follow the correct steps.

If you have other questions about buying real estate in Mexico, please contact us. We understand that buying property in Mexico as a foreigner can sometimes be confusing, but our team is here to help at every step.