Can a non/Mexican buy a property in Mexico?
A foreign may buy a property with a tourist visa and may obtain direct ownership of a property. Non-nationals would need to seek permission from the foreign secretary’s office to buy real estate in Mexico. This formality can usually be settled within a couple of days. You will have to sign the ‘Calvo Clause’, stating that you will not seek foreign jurisdiction for anything to do with your property transaction.
It is stated that if you rent or buy a property, you are no longer a "tourist" and therefore, are invited to apply for a Temporary or Permanent Resident Visa. But in order to acquire property, it is not necessary to possess a Resident Visa.
What are your rights as a Buyer?
As a legal owner of a property you have the right to sell your property without restriction. You may also transfer your rights to a third party or pass it on to named heirs.
How long can a foreigner reside in Mexico per year?
When you travel to Mexico, a Tourist Visa is issued. This visa allows you to remain in Mexico for up to 180 days without working. You also have the option in your home country to apply for a Temporary Resident Visa, which is valid for a 12-month period.
What is a Tourist Visa?
This is the visa obtained when first entering into Mexico and can be renewed by simply leaving Mexico within the allotted 180-day period, and then reentering.
What is a Temporary Resident Visa?
This is visa is for anyone who wants to live part time in Mexico, but does not necessarily intend to make this their permanent home. To be granted a Temporary Resident Visa status, you must start the application on a Mexican embassy before and finish the process.
What is a Permanent Resident Visa?
This document is for a person who intends to live permanently in Mexico, with qualifications only slightly more stringent than temporary resident status. After four years of successfully meeting the requirements of Temporary Resident Visa (including restricted time out of Mexico), one may apply for "Inmigrado" status, which allows you to enjoy most of the rights and privileges of a Mexican citizen, the primary exception being the right to vote. Inmigrado status does not require you give up your native citizenship, but holders may freely work and remain in Mexico without annual renewals of immigration paper.
If I decide to sell my property, can anyone buy it?
Yes, you can sell to either a Mexican or a Non-Mexican. Please note that a Non-Mexican would also be required to get a permit to buy.
Can the Mexican Government confiscate my property?
Foreigners often worry about their land being expropriated by the Mexican government. Under the North American Free Trade Agreement (NAFTA), Mexico may not expropriate property, except for a public purpose. This is the same as "Eminent Domain" in the U.S. When it is necessary to expropriate land, swift and fair market compensation must be paid, together with accrued interest.
When buying or selling a property in Mexico, who pays the closing costs?
Buyer pays the transfer of acquisition tax and all other closing costs, including the Notary's fees and expenses, while the seller pays his capital gains tax and the broker's commission.
How can I estimate the closing cost and other expenses?
We always advise our clients an approximate rate of 6% of the price, but it can go up. The final cost will depend on the price of the property, but other factors should be considered. As your representative agents we would be ahead on this matter before you do an Offer.
Is there financing available for foreigners in Mexico?
For non-Mexicans buying real estate in Mexico is usually cash transactions. There are just a few options available for foreigners. In general, the best option is taking advantage of presale construction projects offering financing. This can give you up to a year to pay for your property in San Miguel de Allende. Ask your Colonial agent for reputable developers currently offering this option.
Can I use my own bank to carry the mortgage?
Yes, you can finance, raise your capital from any bank in the US or Canada that will allow for such operation. In other words, here in Mexico there are no restrictions, it is basically the banks who are processing the loans who will advise to you whether or not they have a program to finance property in another country.
When should I make an Offer?
Once you have found the right property, let your Colonial agent know as soon as possible that you're ready to make an offer. Please note that with the new anti-money laundering laws and due to the new real estate licenses, it is important for us to have an offer to purchase for every transaction.
What does the offer include?
Your offer should have a time limit for the seller to accept it, reject it, or make a counter-offer. You should also include the date, if you plan to use an escrow account, outline conditions, amongst other items. If a counter-offer is made, you will have some time to respond. Often, several offers go back and forth until an offer is accepted, or one party decides to end negotiations.
Does the offer to purchase include money?
Yes, it is usually accompanied with an earnest or reservation deposit.
When you sign an offer to purchase document, the sales agent will ask you for “earnest money.” Earnest money is usually given when purchasing an existing property, and refers to a monetary commitment that shows that you are serious about wanting to buy. Usually, you will be asked to deposit for 10 percent of the sale price.
Who receives the earnest money?
The earnest money on most occasions is made out to the notary, the sellers listing real estate agency or into escrow. I recommend using an escrow account which may cost a little more, but allows for safer administration of monies.
What is an Escrow Account?
An escrow account involves a process whereby an impartial third party, such as an attorney, an escrow company or a title company, is entrusted with the job of seeing that the transfer of ownership takes place according to the terms of the written contract agreed upon by all parties involved. The escrow agent holds any funds safely until all the conditions and details have been realized as instructed by the contract and disburses the funds to the proper parties at the proper time as outlined in the escrow agreement signed by both the buyer and seller.
Can I use an Escrow Company?
Yes. Please ask your agent about the companies that offer such services.
Do I always need an escrow account?
No. Establishing an escrow account is not always necessary. Using this tool depends on the buyer and seller and is the safest and easy way to do it. We always advise our clients to utilize an Escrow Account.
How long do I have from the offer to purchase to the time to pay the property?
In the offer to purchase a time period is normally stated for a response from the seller to either accept or reject the offer. Once the offer has been accepted, we proceed to do a binding Purchase Contract and if all documents are in order and clear, the establishment of a closing date the notary public can be contacted to initiate its process which may be 7 days approximately. Closing may take from 3 to 5 weeks.
What happens if I decide to not continue with the buying after making the offer?
Normally our Offers and non-binding so if you decide not to continued you are not obligated, but if a Purchase Contract has been signed and the earnest money is in the escrow account a penalty should be paid to Seller and also the Escrow fee will be deducted from that amount.
Do I always need to retain legal counsel?
Not always, but many people prefer to work with an attorney to review the title of the property and ensure its free of liens. As your representative we will always do this and also can set an appointment with the Lawyer at the Notary due to review the title of the property and ensure it’s free of liens or defects, he can review contracts and help you with legal questions.
What is a Purchase Contract?
The Purchase Contract is basically a buy and sale agreement that outlines details such as the price, closing date and clauses of the purchasing process. Upon signing this agreement, an initial deposit (around 10%) is paid by the buyer. The agreement normally also includes a cancellation penalty (usually equal to the deposit) which has to be paid if either one of the parties decides to pull out.
Who reviews this document?
These contracts can be reviewed by the buyer, and it is also recommended that a Mexican legal counsel do a revision as well.
Who signs this document?
Both parties, buyer signs on the buying part Seller behalf of the selling part.
Do we need a Notary Public for the signing of the Purchase Contract?
No, both parties can sign with their representative agents, although the Notario will review the Purchase Contract before the closing when he requires all the documents for the file.
What is the roll of a Public Notary in the Estate Transaction?
In Mexico, a Public Notary is a government-appointed lawyer who processes and certifies all real estate transactions including drawing up and reviewing all official documents to ensure the proper transfer of the property. Next to your representative agent the most important person in your property purchase will be the public notary.
As a property Buyer, you have the right to choose a public notary for the estate transaction. The notary will ensure that all documents and permits are in order. He will check if the property has a ‘clean’ history, and that there are no liens on the land (like an unpaid mortgage). He should also check the building permits, tax registers, and whether all land taxes and utilities have been paid.