A clear answer is “Yes”. Over the years, México has made arrangements
to facilitate the purchase of properties to foreign investors. Riviera
Maya is located within a restricted zone in the country, so
there are two ways you can own property here:
Fideicomiso. A real estate trust held under your name
by the national bank of your choosing.
Mexican Corporation. A Mexican corporation is established
were you appoint yourself or others as owners, once formed, the corporation
will own your properties.
It is a real estate trust fund very similar to one you may hold in the
United States, except that the designated trustee must be an authorized
Mexican financial institution such as Citibank, Scotiabank, Bancomer, amongst
others. Exactly like in the US, this trust gives the buyer full ownership of
the property they are purchasing, but instead of being the “owner”, they are
stated as the first beneficiary. This allows the person to benefit from
improving, remodeling, fixing, renting, or selling the property without restriction.
No. A fideicomiso is established by the government and gives foreigners the
same rights of ownership as Mexican citizens. The only difference is that they
never receive the actual fee simple title. The Mexican government may not directly
or indirectly expropriate property, except for two reasons:
a) For a public purpose, like building railroads or highways
to name a couple.
In which case, the owner would receive fair market compensation.
b) Having been found guilty of either one of these major illegal activities:
human trafficking, kidnapping, vehicle theft or drug dealing.
This is an option you may choose but is not enforced. This insurance
policy for the property ownership is not as common in Mexico as it is
in the US, but several law firms have this service available should you
choose to include it for your closing.
Yes. US citizens are able to use 401Ks and IRAs to buy a property in
Mexico free of tax, but only for investment purposes. This is a very
smart and lucrative way to diversify your investment portfolio, and is
not a complicated process, in general it could take around 45 extra days
for closing and only an $250 USD extra fee.
The Ejido is a Mexican system of government that dates from the Mexican
Revolution era (1920’s).
It was initially used to assign communal land for agriculture only, but
in 1992, congress pushed legislation to allow the privatization of land.
Ejido land is very common in the Yucatan Peninsula, and represents a great
opportunity for savvy investors, but the purchase, privatization and development
of it is subject to a long and detailed process, no matter the nationality.
It’s not mandatory, but we highly recommend you hire one. Your attorney
will represent you and protect your bests interests, by using their expertise
on federal and municipal laws, having inside information about previous
transactions with several different developers and their reputation.
A “Notario Público” (Notary Public) is a very similar figure as in the US,
a licensed attorney appointed as a government official and whose primary
role is to serve the public as an impartial witness when important documents
are signed. In México, the Notario has also a big responsibility during real
estate transactions, like calculate and collect taxes, ensure the legality of
the transfer of title, etc.
Total closing costs could include most (or all) of the following: taxes,
Notario fees, setting up the escrow, appraisal fees, origination fee,
application, establishing the trust and obtaining the SRE Permit. For all
of this, you can roughly consider somewhere between 5% - 7% of the sale's
price. You can also ask your legal and accounting team to work on a fiscal
strategy to lower these costs.
An offer to purchase (OTP) is very important when buying a property, this
document must include personal information, amount, payment method, time
frame, inventory and all the additional information that your real estate
advisor deems important. This document will be approved (or counter-offered)
and signed by all the parties involved in order to send it to the legal team
for the first draft of the contracts. It is also very important to include a
reservation deposit (the amount is usually setup by the seller) in order to
ensure that the property is taken off the market.
Because Riviera Maya is such a fast market, there is currently a lot of
pre-sale inventory. Developers of all kinds (big or small, experienced
or new, national or international) have found a great opportunity to profit
on upcoming areas such as Playa del Carmen and Tulum. This means that in
order to have a safer transaction when buying pre-sale, you would need to
consider different facts like previous developments, time frames, liquidity
and reputation of the developer. There currently few to none unfinished
developments in Riviera Maya but is always better to use de insider knowledge
and experience of a licensed real estate agent to advise on the best developers
and help identify a great opportunity.
Riviera Maya has been a safe place for many years, especially compared
to other tourist destinations or even where you might live. There are
things, people and locations to watch out for, just like any other cities.
So, in general tourists and residents have few issues with safety,
specially while living or staying at residential areas. Increasingly in
other countries, media outlets tend to report shocking news to grab attention,
we would suggest talking to local ex-pats to learn from a more reliable source.
· A beachfront lot residential will roughly cost between $500,000 USD - $2’000,000 USD.
· A beachfront house currently markets between $700,000 USD - $2’500,000 USD.
· A beachfront apartment: with one bedroom between $350,000 USD – $600,000 USD.
In 1992 México joined the NAFTA agreement, opening a vast variety of
benefits for international commerce. One of this benefit is the double
taxation exemption, this means that if you buy a property in México, you
could choose to pay its taxes either in the US or México.
Most developers here offer direct finance on pre-sale, this means that
you can buy a pre-sale property and leave a down payment of (generally)
30% while negotiating a payment plan throughout the construction period
of the project or pay the 70% at the delivery of the property.
Long term financing banks or lenders is not highly recommended since the
usual interest rate in México is usually above 10% (2018).
Like any real estate deal, it’s all about location, location, location.
The trending market is Tulum, for its high demand and low offer on vacational
properties. When location as been chosen, take in consideration the following:
· The popularity of the development and the amount of its amenities.
· The style and quality furniture, decoration, appliances and services.
· Exposure of the unit in different media
· Reviews of previous guests
· Taking all of these aspects into account and maximizing their potential
will guarantee a high occupancy rate at a more expensive rate.
