Why Mexico?
The Mexican property market is already pretty established thanks to American snowbirds, and as a result it is well equipped to cope with foreign buyers. Property prices in Mexico have been rising year on year, with cities and popular tourist resorts reaping the benefits. Despite this, both land and property is much cheaper than in many other global property-buying destinations.
However it’s not just price that’s attracting investors, holiday homers and retirees. Fabulous weather, amazing beaches, a vibrant culture and good food all combine to provide an exotic holiday location – it’s no coincidence that Mexico is frequently cited as one of the worlds most popular honeymoon destinations.
The cost of living in Mexico is around half that in the UK, and labour is cheap, so if you are planning on emigrating, or even building your own home, you will be off to a flying start.
Popular buying locations
Cancun on the Yucatan peninsula is perhaps the most popular Mexican tourist destination – welcoming no less than three million visitors a year. A bustling nightlife compliments the wide range of water sports that are available during the day, making this an ideal family destination. Acapulco, the country’s most famous beach, also offers a mix of gourmet restaurants and lively nightclubs to occupy those balmy evenings, while diving and snorkeling are the order of the day.
Meanwhile, Los Cabos on the Pacific coast is keen to make its mark as the smartest new golfing destination in North America – it is claimed that a whopping 40 per cent of visitors arrive by private jet. Property prices in the golf developments here are some of the highest in the country, but this is a case of you get what you pay for, as luxury is the name of the game.
Puerto Vallarta is wedged firmly in the middle of the market, with new development complimenting cobbled streets and white-washed buildings. Prices here having been rising quicker than in both Cancun and Acapulco, as it attracts the wealthier middle-aged market.
Legal issues
In Mexico, foreigners are unable to buy land in restricted zones unless they set up a trust known as a fidecomiso. These zones comprise all land within 100 kilometres of any international border, and 50 kilometres from any coastline. The fidecomiso is set up via a bank, and it is really only a legality as the buyer is the sole beneficiary of the trust – unless you nominate anyone else. The bank will hold the title deeds, but you own the property in all but name, and are therefore entitled to carry out works, rent the property out or sell it without consulting the bank. In the event of your death the property will go to your chosen beneficiary, even if you don’t have a Mexican will.
There are many problems with clean title in Mexico, so it is absolutely essential that you seek the advice of an independent solicitor familiar with local law. If there is any doubt over the title whatsoever it is advisable to take out title insurance.
The buying process
Once a price has been agreed, and you have commissioned a notary public, you will need to sign a preliminary sale agreement, at which point you will be required to pay a five to ten per cent deposit. If you pull out after this stage you will lose your deposit. Your notary public will need to seek permission to buy the land from the Foreign Secretary’s office, and you will then be asked to sign the Calvo Clause, which states that you will not seek foreign jurisdiction in dealings with your property transaction.
If you are buying a new-build property your notary public will ensure the developer’s permits are in order, that the deeds are correct, and that the property is not built on ejido (public agricultural) land. An official appraisal of the land or property needs to be carried out, similar to a survey, following which you will need to produce a range of identification and your visa to prove that your stay in Mexico is legal.
The remainder of the balance is paid when the deeds are signed over to you, and all taxes and notary fees are due on this date. It is essential to note that, while you don’t legally need a solicitor to buy a home in Mexico, it is strongly advised – especially if you are purchasing a resale home.
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