Buying in Mexico

Navigating Mexican Real Estate

Thanks to changes to Mexican law over the years, it’s now possible to buy property in Mexico even if you’re from another country. Plus, there are more reliable resources available than there were decades ago, from lawyers, to escrow companies who will make sure the paperwork is official and the money exchange is smooth. Cash is King in Mexico and so it is in purchasing Real Estate. Mortgages have not been perfected and are not recommended. Many people consider San Miguel de Allende the prettiest colonial town in Mexico and this includes the surrounding countryside. About three hours north of Mexico City, in the Colonial Highlands region, San Miguel is a feast for the eyes. Streets of colorfully painted colonial houses… small, intimate plazas…quiet street corners with tinkling fountains…lush tropical flowers tumbling down stone walls…you’ll find it all in San Miguel and we haven’t even started on the arts and food!

A Step-by-Step Guide to Buying Property in Mexico

1
Hire Reneé
2
Have Your Documents Required, Ready!
3
Make an Offer
4
Set Aside 10% as Earnest Money for Escrow
5
Buy / Sell Agreement
6
Play the “waiting Game”
7
Close on the Property

Hire Reneé

Hire Reneé to represent all of your real estate purchases.

Have Your Documents Required, Ready!

The following will be required. 

(A) Passport (B) Residency status; Temporary / Permanent or Tourist

If you are Tourist Status, you will need to apply for an SRE Permit, which we will help you with. You must have an executed purchase contract in place to start the process as the SRE Permit is specific to the property being purchased.

Make an Offer

This is done in the form of a “PROPOSAL TO PURCHASE” which we will draw up on your behalf detailing all terms of the purchase. 

Set Aside 10% as Earnest Money for Escrow

Once your offer is accepted in writing, and the “BUY / SELL AGREEMENT” (better known to most as a Purchase Contract) you will need to deposit (typically 10% of the purchase price) into escrow, which will be required within a determined number of days in the contract to be deposited after all is fully executed. We use modern day Escrow accounts, money is not held by a Brokerage firm, Agent, Seller, or Notario. We will walk you through the complete process to make sure everything is legal and ethical.

Buy / Sell Agreement

We draw up the Buy/Sell Agreement with all Buyer / Seller legal names and passport numbers along with all the terms agreed to in the executed Proposal to Purchase. The Buyer/Sell Agreement is in both Spanish and English, all translated by the Attorney. This is a legal and binding contract by both Buyers and Sellers.
We also highly suggest at this time you authorize the Attorneys and Notario to draw up a Mexican Will. This Will is only specific to the property so if the unforeseen happens your heirs will not have to worry about any bureaucracy.

Play the “waiting Game”

In the meantime, the Notario will verify the property’s title. In doing so, they will request a copy of the title deed and documents such as the lien certificate, which will show the name of the owner of record as well as the details of the property, including the lay of the land (its size) and its status (commercial or residential, for example). They will also request from the local tax authority a non-lien certificate which, if issued, will show that either no taxes are due or will reveal unpaid back taxes. In addition, they will make sure that no other property-related bills such as water or electricity are outstanding. You can also have the property appraised at this stage to establish its assessed value. This will be a time frame of a few weeks, you will be informed weekly of what is going on so you wont feel as though you have been forgotten or “fallen through the cracks”. Once all is in order, the full balance of the purchase price will need to be transferred to Escrow three (3) business days prior to closing to ensure funds are ready for ownership transfer. We will notify you one week prior to closing with a “it’s time to transfer”.

Close on the Property

Once we have clear to close, the SRE Permit has arrived (for Tourist status Buyers only) and all funds have been received into Escrow, we are ready! We meet with Notario and seller(s), and a Translator who we always include in our closings.

Closing Cost for Buyers

Buyers’ closing fees, in a regular transaction, usually come to between 2% and 8% of the cost of the property. The fees will cover an acquisition tax, property-registration fee, fee for the tax certificate, the title-search fee, the property-appraisal fee, the notary’s fee, and any miscellaneous clerical fees. We are happy to provide an estimated closing fee schedule. The Seller is responsible for the Real Estate agents’ fees.

Property Taxes in Mexico

A 2% acquisition tax is payable by the buyer when property changes ownership.

Although Mexico does not impose an estate or inheritance tax, there is a tax on certain gifts involving real estate (payable by the recipient). Gifts between spouses and direct family members are not taxable.

The property tax on Mexican real estate is called predial. Compared with property taxes in the U.S., the cost of the predial is quite reasonable. The average is approximately 0.1% of the assessed value of the property at time of sale.

If you do not reside in Mexico, but rent out your Mexican property, your rental income is subject to tax at a rate of 25%. For residents, rental income is taxable at the regular income tax rates.

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Contact Details

Reneé Davy

Phone

+1.713.456.9861

Email

[email protected]

Phone

+52.415.152.5220

Address

Agave | Sotheby’s International Realty Sollano 19 Centro Historico San Miguel de Allende GTO MX 337700

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