Foreigners can indeed own property in Mexico, including in the restricted zones within 50 kilometers of the beach or 100 kilometers from the border. Ownership in these zones is typically achieved through a Fideicomiso (bank trust) or by forming a Mexican Corporation, particularly for commercial properties.

A Fideicomiso is a trust agreement set up with a Mexican bank, allowing foreigners to own property in restricted zones. The bank acts as the trustee, holding the title for the beneficiary (the foreign buyer), who enjoys all ownership rights. This trust is valid for 50 years and can be renewed.

Setting up a Mexican Corporation is another option, especially for those purchasing property for business purposes like vacation rentals. This option is often preferred for commercial investments or owning multiple properties.

Real estate agents assist in finding and negotiating the property deal, while attorneys are crucial for managing legal aspects, including due diligence and documentation. It’s essential to have professional guidance throughout the process, as all legal documents and transactions are conducted in Spanish but can be provided in a translation of your preferred language.

Closing costs in Mexico vary but generally include the acquisition tax, notary fees, and other miscellaneous expenses. These can range from approximately 4.5% to 9% of the property’s value. It’s important to budget for these additional costs when planning your purchase.

Property tax, known as ‘Predial,’ is relatively low compared to many countries. The tax rate is based on the property’s assessed value at the time of sale. It’s a crucial aspect to consider for long-term ownership costs. You can expect your property tax to be approximately 0.1% of the property’s value.

Example: Property Value $300,000 = Yearly Tax $300