FAQ’s


How can you purchase a property in Mexico?

Non-Mexican citizens can purchase property in Mexico, with only coastal and border properties owned through a trust deed established with a Mexican bank. Foreigners may directly own rural or urban land in the interior of Mexico, with certain limitations on specific agricultural tracts.

How does the trust deed work?

The bank (known as the trustee) holds the trust deed for the person who is purchasing the property (known as the beneficiary). This property is not part of the bank’s assets and cannot be subject to a lien or attached for bank obligations. The beneficiary has all of the ownership rights to the property and may sell, lease, mortgage, pass to heirs or do any other legal thing with the property.

Why trust deed ownership?

The trust agreement was established by the Mexican government for foreigners interested in owning property in Mexico. It has the benefit of the bank “overseeing” the deed. A further benefit is that co-owners can be listed on a trust deed using “and/or,” solidaridad activa. Upon the demise of one the property automatically goes to the other and probate is avoided. The importance of the designation “and/or” cannot be understated as this allows either to sell the property and does not require the agreement and signature of all parties. Another advantage is that a beneficiary can be named, which also avoids probate. This beneficiary may be unrelated to the owner.

How are trust deeds established?

The trust or ¨fideicomiso” is established by a Notary. In Mexico, the designation of an attorney as a Notary represents a high level of legal standing and their services are required for the transfer of real estate. Because of the large number of foreign-owned properties in Mexico and especially in areas such as Ajijic, establishing a trust has become a routine procedure. It is not a complicated process, and standard forms are utilized. As part of the escrow process, your Ajijic Real Estate Agent should assist you in your dealings with the notary.

How does the Escrow works?

The offer to purchase is always validated by a ten percent (10%) deposit, held in a U.S. dollar escrow account by Ajijic Real Estate when the offer is in dollars and in a pesos account when the offer is in pesos. The balance is payable upon the signing of all papers at the office of the “Notario” or Notary. Funds are held in escrow during the time needed to complete the closing process.

Obtaining Your Deed

In order to obtain the deed for your property, your sales associate will work with the Notary to complete the following steps:

• Ensure the property is free and clear by checking the Land Registry Office. This is guaranteed by obtaining a no-lien certificate and tax statement from the Treasury Department (Hacienda). Additional checks are made to ensure there are no outstanding water bills or municipal taxes.

• Obtain a permit from the Ministry of Foreign Affairs to establish direct deed ownership (if applicable). You must apply for this several weeks before the closing.

• Establishment of the Bank Trust or Fideicomiso.

• Obtain the appraisal for the assessed value of the property.

• Prepare all documents for both buyer and seller.

When all of these items have been completed, the buyer transfers the remaining funds due into the escrow account and the Notary presents the legal transfer papers to be signed. The Notary is the attorney of record and the unbiased, official representative of the government. The Notary has a fiduciary responsibility to both parties and sanctions the contract from a tax and legal point of view. The buyer and seller need not be present at the closing, but may be represented by their Ajijic Real Estate Sales Associate via a power of attorney. The buyer chooses the notary, as pays the notary fees and attendant closing costs directly.

Are there any Closing Costs?

Closing costs are paid by the buyer, and to some extent depend on the value of the property. They include a transfer tax, legal Notary fees, a property registration fee, and fees for the tax certificate, title search fees and property appraisal, as well as miscellaneous clerical expenses. Your Ajijic Real Estate Sales Associate can supply you with a detailed pre-closing cost estimate from the Notary once an offer is made.

The seller pays all capital gains taxes and real estate fees. Simply stated, capital gains is a thirty-five percent (35%) tax on the difference between assessed values at the time of purchase and sale, with adjustments made for inflation. Your Sales Associate can provide you with detailed information on future capital gains taxes, and assist you in your tax planning.


What about Property Taxes?

Property taxes are very low in Ajijic, and in Mexico as a whole. The property tax rate, known as “predial,” is eight-hundredths percent (.08%) of the assessed value. If paid annually it is discounted further! The assessed value for property tax purposes is determined at the time of sale. An example would be that a condo purchased for $150,000 USD would be assessed about $100 USD annually in property taxes.


For any further information please contact us

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