Buying Real Estate in Mexico - Royal Club Realty - Real Estate in Puerto Vallarta and Riviera Nayarit

Q. Is it legal for foreigners to buy land or property in Mexico?

A. Yes! Purchasing property in Mexico by foreign buyers is allowed under Mexico’s constitution. However, the Mexican Constitution restricts ownership of real estate by foreigners in any area located within 100 kilometers of any Mexican border, and within 50 kilometers of Mexico’s coast. Foreigners wishing to purchase properties in this zone just need to use a bank trust called a ‘fideicomiso’. This method of ownership does not restrict your rights to use, enjoy, or sell the property and are utilized by tens of thousands of foreign owners just in the Puerto Vallarta area alone.

Q. Are Mortgages available in Mexico for foreign buyers?

A. Mortgages to assist in purchasing Mexico real estate are available through a number of providers, but primary three lending sources: Scotia Bank, Bancomer and Banorte through their US affiliate International Bank based in San Antonio, Texas. Most lenders offer a range of interest rate and point combinations to meet needs of individual borrowers. As a general rule, lenders require a minimum of 20% to 25% down with the balance financed. Interest rates are higher when purchasing real estate in Mexico and current rates for a 30 year fixed rate mortgage run around 8%. There are shorter term fixed rate mortgages available as well as adjustable rate mortgage products. Loan minimums are $100,000 for US dollar based mortgage products.

There are a number of mortgage brokers who specialize in Mexico mortgage products for Canadians and Americans, and one of the top brokers will be speaking at our Royal Club Real Estate Event. When using a mortgage broker, as opposed to going to the bank directly, you can save time and see which lender has the best rates for you, and origination fees average about 1-3%.

One great benefit is that you may use the Mexico real estate you are purchasing as collateral for your mortgage and leave your other assets in Canada or the U.S. unencumbered by the loan.

Q. How long does it take to get a mortgage?

A. About as long as it does in Canada or the U.S. Plan on one week for pre-approval, and two to three months to arrange the financing before completing the purchase of your property.
Our mortgage and loans speaker Doug Jones from Mortgages in Mexico is an expert assisting Canadians and Americans to obtain loans for their Mexican real estate. He has over 30 years experience and is always available to answer questions. Contact him today by emailing

Q. Is title insurance available to protect my investment?

A. Title insurance is available and is a smart investment when buying real estate in Mexico. There are two major title companies serving foreign buyers: Stewart Title Latin America and First American Title, both of which offer services to give you piece of mind when investing in Mexico real estate.
Title insurance covers the unexpected such as improper documentation on behalf of the seller or the fact that the seller misrepresented his/her ability as authorized owner of the property. It also covers liens, which may have been assessed on the property prior to your purchase, and any hidden persons that may have a claim to the property but not listed on the sale transfer papers.

Q. What are closing costs like on real estate transactions in Mexico?

A. Closing costs on your residential Mexico real estate purchase may be estimated at around 6% to 8 % of the selling price. If you are using a mortgage to help finance the purchase, the loan related fees are similar to those found in Canada however the third party Mexico fees constitute the majority of the closing costs. These third party fees include applicable municipal fees, bank trust fees, transaction and legal fees, escrow and title fees and lender origination fees if using a mortgage to purchase Mexico real estate. [The good thing is you only have to pay these once (when you buy, not when you sell)!]
* Closing costs in Mexico are approximately between 4- 6%. Check out our Mexico Closing Costs estimation tool.

Q. What exactly is a Mexican Fideicomiso?

A. The Fideicomiso or Mexican Bank Trust is a mechanism that enables foreign persons or companies to purchase property in Mexico.
Only Mexican banking institutions authorized and regulated under Mexican laws can serve as trustees of the fideicomiso. The beneficiary of the trust, (the property buyer) retains complete use and control of the property held in trust and is solely in charge of making any and all investment decisions pertaining to the property held in the trust. This includes the ability to decide to transfer your property interest to another buyer, in simpler terms, it allows you to sell the property and transfer the title in trust.

A great bonus: property held under a trust can be passed on to future generations without inheritance tax in Mexico.

Q. What requirements are necessary to form a fideicomiso?

A. A copy of the real estate title or deed indicating the exact location and legal property boundaries, a draft of the property, the name(s) of the beneficiary(ies), nationality, complete address, phone number, email address, and the mutually agreed upon property purchase price.

Upon receiving the information and documents, the bank applies for the Fideicomiso Permit through the Mexican Foreign Affairs Ministry.

Q. What is a trustee?

A. In Mexico, there are banks that are authorized to open fiduciary accounts and conduct trust operations on behalf of foreign investors. The bank, as Trustee holds legal title to the real estate property through the fideicomiso, throughout the term of the Mexican trust contract.

Q. What fees will the trustee charge for a fideicomiso?

A. The fees as quoted by the trust division of Scotiabank shows an initial Trustee acceptance charge of $750 USD, payable upon execution of the fideicomiso contract plus $750 USD per year for trust administration. This varies slightly for each bank, so shop around.

Q. What legislation is there to protect foreign residents?

A. Foreign residents are protected by the constitution, and have most of the rights of citizens. The record of the government historically has been excellent in honoring these rights. The Federal Attorney’s Office of Consumer (PROFECO) protects the rights of the consumer and offers services in English. Foreign residents do not have the right to:

  • Vote or participate in political activities.
  • Work for wages without a permit.