Buying Real Estate in Mexico

The first thing you need to know is, yes, you can buy real estate in Mexico! There are rules and restrictions but it definitely can be done and is done every day. Also there are many non-direct incentives to buying real estate in Mexico, such as very, very low property taxes, compared to the United States and Canada. Also if you can prove that you have lived in the property for at least 6 months, you may be exempt from paying capital gains taxes. Consult with your attorney for all the legal details.

The first rule is to know when buying Mexican real estate is, which properties you can buy and which properties you can’t.

There are 5 different types:

1. Federal Property

Just as in the United States no one can own federal land, either Mexican national of foreigner. This includes all land from the high tide zone up the beach. Neither can anyone block it off for their private use. So you can walk on any beach anywhere in Mexico.

2. Restricted Property

Restricted Property, includes all land 62 miles or 100 kilometers from any international border and all beachfront property (property that is within 31 miles or 50 kilometers from the Mexican coastline). Mexican nationals can buy this property without restrictions but foreigners must have real estate trust or “fideicomisos”. Here a Mexican Bank is set up as trustee or titled owner of the property. This is done because the Mexican Constitution states that foreigners cannot buy land in the “restricted zone”. The bank actually buys the property for you and then has an obligation to follow your instructions on what to do with the property. You have full access to the property and can do anything you want with it. You can tear it down, build, remodel, sell it, will it or make profit with it (like hotels etc…). Before you buy anything in a restricted zone you must obtain a trust permit from the Ministry of Foreign Affairs. The Ministry must grant the trust permit within 5 working days after having received the application at the Central Ministry office in Mexico City or 30 days if it received from one of the other offices outside Mexico City. The Ministry of Foreign Affairs must confirm the registration of the property 15 days after the filing of the petition. If there is no action by the ministry, after the maximum number of days has passed, it is considered to be registered. Even once the trust expires, you still have full benefit of the property.

3. Edijo Property

Do not buy “edijo” property unless you proof that it has been converted to private property and it has clear title.
Edijo property is communal. It is property that was given to the people who worked the land, by the Mexican Government in 1934.
It was done so the people who were working the land had rights to it, instead of being tenant farmers. The administration of this
property is done the community where the property exists. In 1991 it became possible for this land to be turned into private property
but it is a long and often very involved process.

4. Unrestricted Property

Unrestricted property, is all of the rest of the property in Mexico, that doesn’t fall into the above listed categories. When you buy
an “unrestricted property” you get an “escritura publica” or public deed. This is then registered with the Mexican government.
You can do whatever you like with this property.

5. Historical Property

Historical properties listed with The National Institute of History and Anthropology. With these properties there are
restrictions and you needing a permit, when you make changes to the property. Though there are no restrictions when you want to
buy one of these historical properties.

When you buy any property in Mexico, you need a Mexican Attorney to draw up the contracts and review the terms and conditions of the sale. Always have your own attorney, don’t use the seller’s attorney. Before hiring an attorney ask to see his “cedula professional”. A document stating he or she can practice law in Mexico. It should also include a photo and their signature. American attorneys are not licensed to practice law in Mexico. No matter what they say there are very few American attorneys practicing in Mexico. So get a Mexican Attorney. You also need a good real estate firm. Ask for referrals or better yet ask at the American consulate or Embassy. There is no real estate commissioner in Mexico and brokers are not licensed. Anyone can be a real estate agent in Mexico. You also need a bank and a notary public.

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