Can foreigners buy property in Mexico? Is probably one of the most asked questions in Puerto Vallarta, and the answer is most definitely YES!
Foreigners may obtain direct ownership of property in the interior of Mexico and if they want to buy real estate within 100 kilometers from all borders or 50 kilometers from the coast, known as the “Restricted Zones” they can buy real estate through a ‘Bank Trust” or “Fideicomiso”.
A Fideicomiso is done through a Mexican bank authorized by the Federal Government to act as “fiduciary”. The bank becomes the legal owner/buyer of the property and although the bank holds the property, it is not considered a bank asset. Essentially, the bank acts as the “fiduciary/trustee” for the trust, and the Purchaser (you) is the “Beneficiary” of the trust. The “Beneficiary” has all the benefits of direct ownership, to use, occupy, lease and possess the property, to build or improve, mortgage, to sell by transferring the trust and/or to bequeath the property. In the event of a real estate sale, any equity gained throughout the ownership of the property in trust, goes to the “Beneficiary”.
When a foreigner is looking to purchase real estate in Mexico, it is important to go to a Notary Public (specialized attorney) and a Bank, which provides the trust contract service, to understand all the legal formalities and bank fees. PVRPV Real Estate can assist you in obtaining the correct legal representation before making an offer and/or the signing of any documents. On average a Notary Public can obtain the Bank Trust/ Fideicomiso within 60 to 90 days.
Some of the most important payments a purchaser should be aware of when buying real estate in Puerto Vallarta is the Property Transfer Tax or “Impuesto sobre Transmisión Patrimonial” which is established every year in the Income Law of Puerto Vallarta and the tax rate depends on the rateable value of the property as long as the property is for residential use.
When buying real estate it is imperative that the buying-selling contract gets protocolize (notarized) by the Notary Public who will issue a property title, which must be registered in the Public Property Registry.
In addition to the real estate transaction, the Notary Public, upon request, receives the following official documents, which by law are required for any transfer:
- A non-lien certificate from the Public Property Registry based on a complete title search in order to certify that the property has no seizures, embargos, mortgage or filed lawsuits outstanding.
- A statement from the Municipal Treasury regarding property tax, water bills, and other pertinent taxes that must be up to date and paid.
- Plus an appraisal of the property for tax purposes.
Presently there are no Government licensing laws regulating real estate brokerage and sales in Mexico. Anybody can, in effect, offer properties for sale and, therefore, caution should be taken to search out established and reputable real estate companies.
The biggest National Association of Realtors that regulates the Real Estate standards in Mexico is the “Asociacion Mexicana de Profesionales Inmobiliarios” or A.M.P.I. (Mexican Association of Real Estate Professionals), PVRPV Real Estate which is a division of PVRPV, the largest vacation rental and property management agency in Puerto Vallarta, is a member of A.M.P.I.
Puerto Vallarta’s real estate market is diverse and robust and if purchased through the proper channels, a secure investment, offering excellent returns in the form of vacation rental income, appreciation for investors and a better lifestyle with affordable luxury housing for your retirement. PVRPV Real Estate recommends that you rely on expert advice and guidance throughout the entire process, as owning real estate in Mexico is an incredible opportunity.