How to Buy Property in Mexico

Hola.

Let us clear something up right away: yes, foreigners can buy property in Mexico. Even beachfront property. Even in Cabo San Lucas.

The process is different from buying in the US or Canada, and there is one word you need to know before anything else: fideicomiso.

It sounds complicated. It is not. And by the end of this guide, you will understand exactly how it works, what it costs, and why thousands of Americans and Canadians have already done it.

The Restricted Zone Rule

Mexican law says that foreigners cannot directly own property within 50 kilometers of the coast or 100 kilometers of an international border. This is called the "restricted zone," and all of Los Cabos falls within it.

But here is the thing: this restriction has had a legal workaround since 1973, and it is used by virtually every foreign buyer in Mexico.

What Is a Fideicomiso?

A fideicomiso is a bank trust. You set it up through a Mexican bank, and that bank holds the title to the property on your behalf. You are the beneficiary of the trust, which means you have full ownership rights: you can live in the property, rent it, renovate it, sell it, or pass it to your heirs.

Think of it like a holding structure. The bank's name is on the title, but every decision belongs to you. The bank cannot sell your property, live in it, or do anything with it. They are essentially a custodian.

The Step-by-Step Process

1. Find your property. Work with a reputable agent who knows the Los Cabos market. Browse listings at cabo.la/real-estate.

2. Make an offer and sign a purchase agreement. Once the seller accepts, you will sign a promesa de compraventa (promise to buy/sell agreement). This locks in the price and terms. You will typically put down a deposit of 5% to 10%.

3. Apply for the fideicomiso. Your closing attorney (notario publico) will apply to the Mexican Ministry of Foreign Affairs for a permit to establish the trust. This takes about 30 to 60 days.

4. Choose your bank. The major Mexican banks that handle fideicomisos include BBVA, Scotiabank, Santander, and Monex. Annual fees range from $500 to $800 USD.

5. Due diligence. Your notario will verify the title, check for liens, confirm zoning, and ensure everything is clean. This is similar to a title search in the US.

6. Close at the notario's office. In Mexico, a notario publico is a government-appointed legal official (not a regular notary). They handle the closing, transfer of funds, and registration with the public registry. Think of them as the equivalent of a closing attorney and title company combined.

7. Register the property. The notario registers the sale and the fideicomiso with the Public Registry of Property. You receive your escritura (deed) and you are officially a property owner in Mexico.

What Does It Cost?

Closing costs in Mexico run between 4% and 7% of the purchase price. Here is a rough breakdown:

• Fideicomiso setup fee: $1,000 to $2,500 USD (one-time)
• Annual fideicomiso fee: $500 to $800 USD per year
• Acquisition tax (ISABI): 2% to 4% of the assessed value
• Notario fees: 1% to 2% of the sale price
• Appraisal: $300 to $500 USD
• Certificate of no liens: $50 to $100 USD

Common Questions

Can I get a mortgage in Mexico? Yes, but it is less common. Some Mexican banks offer mortgages to foreigners at higher interest rates (8% to 12%). Many US and Canadian buyers use home equity loans, self-directed IRAs, or cash.

How long does the fideicomiso last? 50 years, and it is renewable indefinitely.

Can I leave the property to my kids? Absolutely. You name beneficiaries in the trust, and the property transfers without probate.

Do I need to be in Mexico to close? No. You can grant power of attorney to your notario or attorney to close on your behalf.

What about property taxes? Property taxes (predial) in Mexico are remarkably low. A $500,000 property in Pedregal might have an annual tax bill of $300 to $500 USD.

The Biggest Mistake People Make

Going it alone. Or worse, working with an agent who does not understand the legal process. A good agent and a trusted notario are the difference between a smooth closing and a nightmare.

Our team has guided hundreds of buyers through this process. We connect you with vetted notarios, help you compare banks for your fideicomiso, and walk you through every step.

Start at cabo.la/real-estate or reach out to our concierge at cabo.la/luxury-concierge.

Also read our neighborhood guide to figure out where you want to buy: cabo.la/blog/cabo-real-estate-neighborhoods-guide.

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