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Real Estate in Mexico
Transcript of Real Estate in Mexico
Images from Shutterstock.com Mexico Real Estate purchasing process Reasons to Invest in Mexico Real Estate: INVESTING IN MEXICO REAL ESTATE By Midory Martinez Mexico Real Estate Investments can have great returns and strong appreciation as it is a developing country with a rapidly growing tourist infrastructure. A). Initial written agreement to sell/buy "Convenio de compra/venta."
- Details the cost and deadlines for the purchasing process. Upon signing this agreement, an initial deposit (around 5-10%) is paid by the buyer.
- The agreement 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. 1. Low cost of living
2. Taxes are lower
3. Leading retirement destination
4. Good medical care
5. Strategic geographic location
6. Government macroeconomic policies D). Both the buyer and seller have to provide official documentation to the notary, including:
- their ID (passport),
- birth certificates,
- marriage certificates (if
- and their visa (if applicable). B). As a foreign buyer you need to seek permission from the foreign secretary’s office to buy real estate in Mexico.
-You will have to sign the ‘Calvo Clause’, stating that you will not seek foreign jurisdiction for anything to do with your property transaction. E).The seller needs to pay capital gains tax on the property purchase. C). The public notary checks the seller’s land/property deeds. Then, an official appraisal of the land"avaluo" is carried out. F).The final payment is made when the property deed is signed over to you at the notary’s office. G). At this point the notary’s fees are paid, and also the taxes associated with the property purchase. Mexican Law: Property Ownership http://mexicorealestate123.com/baja123-newsletter/the-future-of-mexico-tourism/ - Property may be purchased and owned outright for residential use by foreign nationals outside of the 100km restricted land border zone, or outside of the 50km coastal zone. http://www.mymexicanlawyer.com/ - Inside of the restricted border/coastal zones, foreign nationals may own land through a "fidecomiso" (a trust) which is set up through a bank and provides for ownership of the land and property in all but name.
- The trust holds the deeds to the property, and you and/or other named persons whom you specify are sole beneficiaries to the trust (and therefore, the property).
-You have full rights to do whatever you like with your property: it can be developed, rented, leased, sold, or given away. Mexican Law on property ownership is comprehensive and provides protection for the buyer and the seller in all property transactions. Financing Mexican Real Estate - An overwhelming number of real-estate deals in Mexico have been settled in cash
- Mexican banks are now beginning to offer more mortgage products for the purchase of real-estate Banamex "Hipoteca" SIN Mortgage Loans for a house - Mortgage loan to purchase with a 10.95% fixed annual interest rate, NO Fees and NO Increase of monthly payments.
- Other benefits: No interest of interest rate or the monthly payment, NO Opening fee, and NO administration fee. Financing "Prestamo Hipotecario" Mortgage loans for your business - A medium or long-term credit for your company's growth, with a mortgage as secured bond, established over real property.
1. The real estate property valuation expenses, notary and encumbrance verification expenses are deductible
2. You maintain possession and use of the real estate property
3. Financing may be in national legal tender or US dollars
4. Fixed and variable rates Land Descriptions Urban zone http://mexico.escapeartist.com/newsletter/what-can-we-expect-for-mexico-real-estate-in-2011 Total transaction costs
in Mexico (range from low to high) TRANSACTION COSTS Who Pays?
Acquisition Tax 0.18% - 4.565% buyer
Notary Fee 0.075% - 1.125% buyer
Registration Fee 0.02% -1.82% buyer
Other fees 0.50% - 1.00% buyer
Title Insurance 0.50% - 0.70% buyer
Real Estate Agent's fee 3% - 6% (+ 16% VAT) seller
Costs paid by buyer 1.12663% - 4.69065%
Costs paid by seller 3.48% - 6.48%
ROUNDTRIP TRANSACTION COSTS 4.60663% - 11.17065% Source: Global Property Guide - México city
- Chihuahua - Prices for a house: $62,500 - $2 million - Prices for a commercial building: $125,000 - $5 million - Scrow and title process is different - Beach Zone: http://www.banamex.com/en/personas/creditos/credito_hipotecario/compra_casa/tasa_fija.htm