Punta de mita, Punta de mita real estate, Purchasing land in mexico FAQ, Punta de mita Vacation Rentals, Punta de Mita Golf, Punta, Mita, luxury real estate and vacation rentals
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| Purchasing FAQ |
| Buying Punta Mita Real Estate Properties It's bound to happen on any vacation to Mexico&sometime after the pace of life has slowed to a more sane and pleasurable level you find yourself looking around and asking yourself, "I wonder if I could live here...." Thousands before already have made the transition from visitor to resident (or part-time resident) of Mexico. The country's real estate ownership laws have never been more welcoming to foreigners, who have been attracted by this country's exquisite geography, warm climate, reasonable cost of living, relaxed lifestyle, and overall quality of life.Yet still, there are significant differences between buying real estate in Mexico and in the United States or Canada. For the traveller interested in buying property in Mexico, it's important to know how foreign ownership works, what the buying process involves, what's available, and what the prices are like. Q: Can foreigners own property in Mexico? Q: What is this Trust, and how does it work? Q: How are these Trusts created? Q: Are there differences in other aspects of property ownership in Mexico? Q: What about the availability of insurance on the transaction (title insurance), as well as the property itself? Q: What about taxes? What can I expect to pay in Mexico? Q: What other expenses should I consider on the purchase of property in Mexico? Q: How can I be assured of dealing with a qualified Real Estate professional in Mexico? Q: Can foreigners own property in Mexico? A: Article 27 of the Mexican Constitution states that foreigners cannot own property within 100 kilometers of the border and 50 kilometers of the coastline. This is a protectionist measure, put in place after foreign invasions repeatedly threatened the country's sovereignty. Foreigners may directly own rural or urban land in the interior of Mexico subject to certain limitations on specific agricultural tracts. As time has passed, and as the Mexican government has come to realize the benefits of opening these attractive areas up to foreign investment, they have modified this constitutional restriction. Since 1973 foreigners (non-Mexicans) have been able to purchase coastal and border properties if done through a Mexican bank trust, known as a Fideicomiso. Q: What is this Trust, and how does it work? A: Essentially, it is like a Trust in the United States —the bank holds the legal title to the property, with all rights and privileges of ownership, including exclusive use and enjoyment, held by the Trust beneficiary—the foreigner. The foreign beneficiary enjoys the right to occupy or rent the property, and may cause the transfer of title or beneficiary transfer to the property to any legally qualified person he may designate. Beneficiaries are also allowed to modify their property in accordance with local zoning regulations. These Trusts have an initial term of 50 years. They are renewable at any time or at the end of the 50-year period for a relatively small fee (less than $1,000 US) for additional 50-year periods. The property may also be sold to a person legally authorized to own land or to another foreigner via a Trust, at any time, with the foreign buyer capturing the amount of the appreciation of the property value. This process is designed to protect the rights of foreigners, and ensure the transactions are legal. Q: How are these Trusts created? A: To establish a real estate Trust, (fideicomiso), banks will charge a predetermined fee, plus a percentage of the property's value, to cover the costs of preliminary studies and the drafting of the Trust agreement. The bank also charges an annual fee for maintaining the Trust, roughly averaging $500 per year, providing there is no financing involved. The Trusts are carried as off balance sheet assets by the banks who act as trustees. The Mexican Government specifically set the trust system up to allow non-nationals the security of ownership without having to change their 1917 constitution. Most real estate agents can refer you to a reputable Mexican bank trust department, which generally have English-speaking personnel, as well as publications, available to answer questions about Trusts. Q: Are there differences in other aspects of property ownership in Mexico? A: Financing is relatively new in Mexico . If financing is something one wants or needs, get pre-approved ahead of time, just as you would in the U.S. or Canada . Closing costs to the buyer tend to be roughly 2 to 4 times higher in Mexico than they are in the U.S. or Canada , averaging 4 to 6 percent of the purchase price. Closing will take from 30 to 60 days depending on contingencies and financing requirements. Escrows are now starting to be available via private escrow companies specializing in this function and will run from $1,500 to $1,800 U.S. per transaction. The buyer and seller need not be present at closing, but may be represented by their sales agent via a power of attorney. Notaries are the agents of record for all transactions registered in the Land Registry Office. Q: What about the availability of insurance on the transaction (title insurance), as well as the property itself? A: To date, there are no home inspection agencies nor home warranty policies available in Mexico , however in recent years, title insurance is available on property that is fee simple land held in a trust. Beginning in 1996, Stewart Title Guaranty Company began underwriting title insurance for Mexican properties at an approximate cost of 1% of the insured amount. Other types of insurance, including property, liability, damage, and earthquake, are all readily available in Mexico, at low cost, and policies can be written to pay claims in U.S. dollars. Q: What about taxes? What can I expect to pay in Mexico? A: For the buyer, the subject of real estate taxes generally comes as good news, especially in the Puerto Vallarta area, real estate taxes tend to be low. Known as ‘Predial’, the tax is calculated as a percentage of the assessed value, paid every bimester, determined at the time of sale. Property taxes have historically been low in Mexico because they have never been considered a source of governmental revenue. Q: What other expenses should I consider on the purchase of property in Mexico? A: If you are not planning on living full time in Mexico, property maintenance will need to be considered for the time you are away. For condominium owners, maintenance and security is handled by the Condominium Owners Association, paid for through monthly fees. Homeowners may want to consider a property management company. Many of the leading real estate companies, especially in Mexico's resort areas, offer this service, and can also be quite successful in generating income from vacation rentals, should you be interested in doing so. Q: How can I be assured of dealing with a qualified Real Estate professional in Mexico? A: On of the major differences in buying property south of the border stems from the fact that Real Estate agents in Mexico are not subject to any national certification or educational requirements. As such, the best advice you can act on is to always deal with an established Real Estate Agency, whose references you have checked personally with several former clients. In Punta Mita, residential real estate sales are handled through qualified affiliate brokers, in conjunction with the Punta Mita Sales office, and Stewart Title Guaranty, in order to offer the highest assurance of professional real estate practices. Punta Mita's pristine beaches, perfect climate and primitive beauty have combined with the acclaimed standard of service of Four Seasons, and opening soon, Rosewood Hotels & Resorts, to create a community of distinctive resort living. This will quickly be recognized as an address of distinction, signifying prestige, privacy, and a purely sensuous environment of great natural beauty. |
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Puerto Vallarta, Jalisco |
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Downtown office: Ignacio L. Vallarta #215-A Emiliano Zapata cp. 48380 |
Within Mexico Tel: 01 (322) 223-4801 Fax: 01 (322) 223-4801 |
From US/Canada Tel: 011 52 (322) 223-4801 Vonnage: (213) 291-7592 |
Punta de Mita, Nayarit |
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North Shore office: Avenida El Anclote #7 Punta de Mita, Nayarit cp. 63734 |
Within Mexico Tel: 01 (329) 291-6420 Fax: 01 (329) 291-6421 |
From US/Canada Tel: 011 52 (329) 291-6420 Vonnage: (213) 291-7590 |
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