Mexico is a popular retirement destination for retirees, and it's easy to see why. The country has a warm climate, low crime rates and reasonable property prices. However, it's also important to know your rights when buying or renting property in Mexico so that you can avoid potential problems down the road. This guide will provide an overview of real estate law in Mexico and help you understand how it works before you make any big decisions about your next move there!
When you buy real estate in Mexico, it's important to understand the following:
- Buyer and seller should be represented by an attorney.
- The buyer and the seller should have a written contract. This agreement will specify
all terms of sale, including price, delivery date, payment schedule and other terms.
It can also include any warranties or representations on behalf of either party
(such as property taxes being paid).
Deeds & Title Insurance
A deed is a document that shows the ownership of property. It contains information about who owns what, how much they paid for it and when they bought it.
Title insurance protects buyers against loss if the seller doesn't have clear title to their property (for example, if they don't own it). Title insurance isn't required in Mexico but is highly recommended—especially if there are any questions about whether you're buying from someone who has clear title or not.
It is possible to buy and sell real estate in Mexico. You will likely need a Mexican land trust.
A Mexican land trust is a legal entity that holds title to real estate in Mexico. It is not the same as your US land trust, which holds title to your property in another country. You can choose to have your properties held by a Mexican land trust or you may prefer to retain control over them yourself.
Mexican Land Trusts (Fideicomiso)
Mexican land trusts (Fideicomiso) are a popular way to purchase real estate in Mexico. The term "fideicomiso" is Spanish for "trust." A fideicomiso is a legal entity that owns property, but also allows you to use it as if it were yours. This means that if you buy into a fideicomiso, it's similar to buying shares in an investment fund—you can hold them until they mature and then sell them on your own terms.
One of the main benefits of purchasing property through an Fideicomiso is that it allows buyers to avoid paying capital gains taxes on any profits made from selling their properties at higher prices over time. Capital gains taxes are typically applied when someone buys and sells property within one year of each other; however, under certain circumstances (such as buying or selling within five years), there may be no need for these payments because they're considered "unearned income" by local authorities who will therefore not charge them upon receipt.*
This can be especially beneficial for foreign investors who want to avoid paying taxes on the sale of their properties. A fideicomiso also protects buyers from losing money if someone else does not pay their share of the mortgage—this is because it's a legal entity that owns the property, not just one person.
We hope this guide has been helpful for you as you start your journey into Mexico real estate law. Please feel free to contact us if you have any questions or would like more information on purchasing property in Mexico.