It is required to obtain a Notario Publico in Mexico (similar to a notary public in the U. S.).
The Notario Publico’s responsibilities include reviewing all required documents with respect to the sale of real estate, including the assurance that all required documents have been reviewed and executed properly, in accordance with the laws in Mexico.
In addition, the Notario Publico makes sure that all legal formalities have taken place as well as collecting all taxes and forwarding such monies to the Tax Authorities in Mexico. If the buyer or seller requires legal advice, they should hire legal counsel that is experienced in Mexico and U. S. real estate law.”
Do I need title insurance?
No is not required in Mexico. Title insurance is meant to help protect your investment should the property you buy subsequently turn out to have liens.
What is an escrow account?
The concept of escrow is fairly new in Mexico and has no set standard for taking place, as is customary in the United States. Coldwell Banker adheres to the U.S. processes of an escrow account, utilizing an impartial third party, namely an escrow company. The third party is entrusted with the job of seeing that the transfer of ownership from the seller to the buyer takes place according to the terms of the written contract agreed upon by all parties involved. The third-party escrow agent holds any funds securely until the point when every one of the conditions has been realized as instructed by the agreement. The agent then disburses the funds to the designated parties at the assigned time as illustrated in the escrow agreement signed by both the buyer and seller.
Who pays the closing costs?
It is customary that the buyer pays the transfer of acquisition tax and all other closing costs, including the Notary’s fees and expenses. The seller pays his capital gains tax and the broker’s commission.
Do I lose possession of the property after the 50-year term expires?
No. Under the trust agreement, the beneficiary has a contractual right with the Mexican bank to all benefits that result from the use or sale of that property. As trustee, the bank has a fiduciary obligation under Mexican law to respect the rights of the beneficiary. The same beneficiary has a contractual right to renew the bank trust for another 50-year term upon expiration and can make multiple extension requests.
Is the Fideicomiso Trust renewable?
The duration of the “Fideicomiso” Bank Trust is 50 years through a Mexican financial institution and can be renewed multiple times for other 50 year periods.
Does the trustee bank consider my property their asset?
No, property held in trust or Fideicomiso by a trustee bank is not an asset of the bank. If the bank goes into financial difficulty, the property is simply transferred to another trustee bank. These laws are federally imposed.
What is a Trustee Bank?
The Mexican bank, or Trustee, takes instruction only from the Beneficiary of the trust (the buyer). The beneficiary has the right to use, occupy, build upon, improve, lease and possess the property. The beneficiary may also instruct the Trustee to transfer the rights to another qualified buyer or bequeath the property to an inheritor. The initial term of the trust is 50 years; however the trust can be renewed for additional periods of 50 years indefinitely, providing for long-term control of the asset.
Can Mexican foreigners (U.S. citizens) own real estate in Mexico?
Yes. Mexican foreigners can own property in Mexico via a Mexican land trust called a fideicomiso. The trust has a 50-year term and can be renewed perpetually to allow for long-term control of the asset. The property can be willed from generation to generation.
If I decide to sell my property, can anyone buy it?
Yes, anyone can buy your property. A foreigner can purchase the property provided they set up a bank trust.
What are property taxes in Mexico?
Property taxes in Mexico are usually considerably less than the U.S. Taxes are based on the size of your property and location and in most cases, are less than $1,000 USD a year.
I am selling my property. Do I have to pay taxes on the transaction?
Yes. Since the real property is located in Mexico, Mexican law deems the source of income to be located within its jurisdiction, making it subject to taxation by Mexico. This is consistent with tax practice and legislation all around the world.
Can I finance property in Mexico?
Yes. Global Mortgage provides financing to U.S. citizens on Mexican real estate. To apply, go to the Pre-qualification application and enter your information.
Is a Temporary Resident Visa required to buy property in Mexico?
No. In order to acquire property, it is not necessary to possess a Temporary Resident Visa.
If you sign a contract, rent a house or condo, buy a house or condo, or lease property, you are no longer a “tourist” and therefore, are invited to apply for a Temporary Resident Visa.
What rights do I have as a buyer of Mexican real estate?
A buyer of Mexican real estate holds the same rights as a property owner in the U.S., including the right to enjoy, sell, rent, improve the property, etc. This ownership is acquired through a fideicomiso or bank trust. The Bank Trust is a legal substitute for fee simple ownership (as is ownership in the U.S.), but the Trustee is the legal holder of the property. The rights to the property may also be transferred to a third party or passed on to named heirs. Sometimes, the property being purchased is already held in a trust. If this is the case, the buyer has the option of assuming that trust or having the property vested in a new trust.