Cabo San Lucas
You can buy real property in Mexico with the same assurance as in your home country, and here are some tips that might help you:
- The Mexican government adopted a trust device (known as a Fideicomiso) to enable foreign investment and ownership.
- Foreigners interested in purchasing property in Mexico have 100% control over their investment through the Fideicomiso.
- In the trust, the foreign buyer has all the beneficial rights of ownership including the right to sell, to mortgage, to will, to gift, to build upon, etc.
- Currently, at least three US title companies are writing title insurance policies on ownership held via these trusts.
- Closing is more complex, more expensive to the buyer, and often more lengthy, than in the United States, but still similar.
- For handling funds, the use of independent money escrow companies is recommended.
- The closing coordinator (it can be a broker, independent closing company or notary) locally communicates and works with the escrow holder.
- Funds transfers are usually done by wire to and from the US escrows involved.
- Expenses of closing are typically much higher for the buyer here than in the US, running from 3% to more than 10% of the purchase price.
- You should get the Mexican visa (FM3) either before buying or as soon as possible after, which facilitates your going and out of Mexico repeatedly.
- If you rent out your condo or home here, the income you earn should be reported to the Mexican tax authority, Hacienda, and to the US. (You will generally not be double-taxed.)
- When you sell, capital gains tax is due, and it is collected by your notary at the time of closing. The rate is either 25% of the gross, or (currently) 32% of the adjusted net gain.
- Brokers have the formula for calculating the gain and can give you a rough calculation.
For more information contact us at +52 624 143 0202, toll free from US at 1 866 805 4938 or send us an email at info@pedregal.com.
