Buying Property in Mexico: What International Buyers Need to Know

by Brittney Jackson

Mexico continues to attract international buyers seeking lifestyle, investment opportunities, and long-term value. From beachfront living in the Riviera Maya to vibrant city life in Mexico City, purchasing property in Mexico can be both rewarding and straightforward—when you understand the process.

This guide breaks down what international buyers need to know before buying property in Mexico, including ownership structures, legal considerations, costs, and common misconceptions.

Can Foreigners Buy Property in Mexico?

Yes. Foreigners can legally own property in Mexico.

The only distinction is how the property is held, depending on location:

Restricted Zone (within 50 km of the coast or 100 km of a border)
Non-Restricted Zone (interior areas like Mérida, San Miguel de Allende, Mexico City)

Understanding the Fideicomiso (Bank Trust)

If you’re purchasing property in the Restricted Zone (most coastal markets like Tulum, Playa del Carmen, Cancún, Cabo), ownership is typically held through a fideicomiso, or bank trust.

How it works:

A Mexican bank holds the title on your behalf
You retain full rights to:
- Use the property
- Rent it
- Sell it
- Pass it on to heirs
Trusts are renewable every 50 years

Despite common myths, a fideicomiso is secure, widely used, and government-regulated.

Buying Property in Non-Restricted Zones

In cities such as:

Mexico City
Mérida
San Miguel de Allende

Foreigners can hold property directly in their own name, just like a local buyer.

The Buying Process: Step by Step

While timelines vary, most purchases follow this structure:

Offer & Negotiation
An offer is submitted, often with price, deposit amount, and closing timeline.
Promissory Agreement (Contrato de Promesa)
This outlines terms, due diligence period, and closing conditions.
Deposit
Typically 5–10%, held in escrow or with a notary.
Due Diligence
Title search, lien checks, permits, zoning, and legal verification.
Closing with a Notary Public
In Mexico, notaries are government-appointed legal authorities—not just witnesses.
Registration
The deed is registered with the Public Registry.

Costs to Expect When Buying in Mexico

In addition to the purchase price, buyers should budget for closing costs, typically 6–8% of the property value.

These may include:

Notary fees
Acquisition tax
Trust setup (if applicable)
Legal fees
Registration costs

There are no annual property taxes comparable to Canada or the U.S.
Mexican property taxes (predial) are generally very low.

Financing vs. Cash Purchases

Most international buyers purchase property in Mexico in cash.

While financing is available in some cases:

Rates are typically higher
Requirements are stricter
Timelines are longer

Developer financing is sometimes offered on pre-construction properties and can be attractive for certain buyers.

Rental Income & Investment Considerations

Mexico allows foreigners to legally rent out their properties, including short-term vacation rentals (subject to local regulations).

Key considerations:

HOA rules
Zoning
Rental management
Income tax compliance

Investment performance varies significantly by location and property type, making local market knowledge essential.

Common Myths About Buying Property in Mexico

Myth: Foreigners don’t really own property
✔ False — ownership rights are legally protected

Myth: Buying is risky
✔ Risk is minimized with proper legal due diligence

Myth: The process is complicated
✔ With the right guidance, it’s clear and structured

Why Work With a Local Real Estate Advisor?

Mexico’s real estate system differs from Canada and the U.S.
Working with an advisor who:

Understands local markets
Coordinates with trusted notaries and legal teams
Represents your interests as a buyer

…can make the difference between a smooth purchase and costly mistakes.

Final Thoughts

Buying property in Mexico is not only possible for international buyers—it’s increasingly common. Whether your goal is lifestyle, investment, or relocation, understanding the legal framework and working with experienced professionals is key.

If you’re considering buying property in Mexico and want guidance tailored to your goals, location, and budget, working with a knowledgeable advisor on the ground is the best first step.