1 May 2008 One Comment

1. You can set up a trust to own land in restricted areas.

The government technically restricts ownership of land to foreigners in areas near the coast, which is where most of the good real estate is. However, you set up a trust called a fideicomiso through a Mexican bank that grants you virtually all the rights of an actual owner, while the bank technically holds the title.

2. Property taxes are very low.

Property taxes (impuesto predial) in Mexico are quite low and ranges from .275% to 1.350% depending on location and is due annually (Global Property Guide).

3. Closing costs are higher than in the US

“Buyers customarily pay a transfer tax (2-6% of the appraised value which is often less than the sales price) and notario publico’s fees (2-3% of appraised value)” (US embassy site). A notario publico is required by Mexican law to authenticate the transaction (Mexperience.com).

4. Mexico has quite high taxes on rental income

Up to 28% of your income on rental profits will be gobbled up by the government if you are a non-resident of Mexico. If you file rental profits as business income, it is progressively taxed from 3% to 28%,

5. Make sure to check the title

Ejidos are communally held farm properties that can not be sold. However this doesn’t prevent people from offering them for sale. Always have an independent title company verify a clear title

6. Real estate agents in Mexico are not legally licensed.

A lawyer licensed in Mexico is recommended to represent your legal interests. You can also check whether a real estate company is legitimate through the US Embassy.

7. Developed areas have modern infrastructure.

Established areas of Mexico have many of the amenities found in the U.S. You should research the specific area you are interested in to find the availability of telecommunications, electricity, sewer, trash, and if the water is safe to drink.

8. High Crime Rate

The US State department warns that “crime in Mexico continues at high levels, and it is often violent, especially in Mexico City, Tijuana, Ciudad Juarez, Nuevo Laredo, Monterrey, Acapulco, and the state of Sinaloa. Other metropolitan areas have lower, but still serious, levels of crime. Low apprehension and conviction rates of criminals contribute to the high crime rate. ”

9. Poverty is Wide Spread

In 2002, half the population in Mexico was living in poverty and one fifth in extreme poverty (World Bank).
However conditions are steadily improving. In 2007 the food based poverty was at 13.8% (CIA).

10. Tourism is predicted to grow dynamically in the future

With the growth of emerging world markets, experts are predicting a dynamic increase in global tourism. Some estimates have global tourism doubling by 2020. If this prediction materializes, prime real estate in tourist destinations will be golden. If you are weary of big crowds, you may want to consider less visited areas.