- Click on the following links to learn about owning in Mexico:
- The Fideicomiso and Foreign Ownership in Mexico
- Closing Services by Pacific Closing Company
- Buying in Pedregal? Read these five important things to consider!
The Fideicomiso and Foreign Ownership in Mexico
What are the parties involved within a Real Estate Transaction?
Typically you will find a: Buyer, Seller, Real Estate Companies, Closing Agent, Escrow Agent and Notary Public, among others (such as the bank, appraisers and land and public registry offices).
What is a Fideicomiso?
Foreign citizens who wish to buy property within 50 kilometers of the coast or 100km of the border are required to obtain a «Fideicomiso,» which functions similarly to a Living Trust in the USA. The ‘owner/buyer’ of the property is designated as a beneficiary of the trust for the next 50 years. A Fideicomiso is not a lease, concession or right to use.
What happens after the 50 years expiration of my Fideicomiso?
The Trust permit needs to be renewed. This is just an administrative process that can be done directly with the Trustee bank. There is no risk of losing the rights over the property.
Do we own the property, or does the bank?
In a Fideicomiso deed, the Trustee bank holds title for the beneficiary (buyer/owner) who acts and has the same rights as an owner.
Who will be handling the funds during the transaction?
It is recommended that you use an independent Escrow company. The Closing Agent communicates and works locally with the escrow agent. Funds will be transferred via wire transfer at the signing of the property.
What is a Notario?
Notaries are attorneys specialized in Real Estate Law who have been appointed by the State Government. They are the only ones authorized to convey Real Property rights.
What is an Apostille?
This is a legal verification of signature performed by the office of the secretary of state of the state in which the signor resides. Mexican notaries require this as a verification of signature authenticity. This is applicable for documents notarized abroad to be used in Mexico.
Why are all documents in Spanish?
All official documents must be in Spanish to have validity as Spanish is the only official language in Mexico.
What will my property taxes be?
The property tax paid by the seller will be the same property tax you will pay after your purchase unless, there is an update on the official values made by the municipal authorities as updates may be done every year. Values are determined by size, zone and property type by a committee formed by the local government and several civil associations, such as appraisers, architects and/or developers.
Are sellers required to pay income taxes in the USA from homes sales in Mexico?
All income generated in Mexico by a Foreigner must be stated in the tax declaration form of their country of residence. If the Foreigner pays taxes in Mexico, they may not be required to pay taxes in their original country. We strongly recommend you consult with your accountant as each case is different.
Where can I obtain a home loan?
Loans for Foreigners are currently available for residents that can show a proof of income in Mexico. These loans are only available in pesos. There are also a limited number of private party loans. Ask your Pedregal Real Estate Agent about it.
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Pedregal offers different financing opportunities for all developer properties with attractive plans and programs at a competitive market rate. To know more about the different programs, contact your Pedregal Real Estate Agent for further details, or send us an email to email@example.com
Closing Services by Pacific Closing Company
The Closing of a Real Estate Transaction occurs when the deed transferring ownership of the property is signed in the presence of the Notary Public by both Buyer and Seller or their legal representatives. At this point, possession is granted to the buyer and money is released from the escrow account to the seller. After the signing, taxes are paid and the title deed is submitted for filing. In Mexico, a Notary Public is an attorney appointed by the government and carries with it a fair degree of weight in terms of being jointly liable for ensuring veracity of information, retaining taxes and other similar steps during the transaction.
It is important that you keep in mind the following:
• The closing process in Mexico is a little different from the one in your hometown.
• Be sure that your trust deed records the actual price that you paid for the property at the time of your purchase.
• Make sure all substitute beneficiaries are included in the Trust and that their names are correctly spelled.
• If you are going to build on a lot, make sure that your construction license is based on the amount that you will be investing in the project. Using a lower value might save you some money now, but when you sell your property, Capital Gains tax will cost you more.
• Read all documents carefully before signing them, or have them read and explained to you.
• Once the closing is completed, notify all utility services of the change in ownership, so that all new bills are in your name.
Each closing is unique and varies on a case-by-case basis. For a smooth and fast closing process, it is recommended that you talk to your listing agent regarding all the paperwork required.
Pacific Closing Company is Pedregal’s in-house Closing Department. For more information about the process, documents or how they can help you, contact them at:
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Buying in Pedregal? Read these five important things to consider!
The following are five easy questions you should ask your agent to get you started on your property search!
1. Can you explain me how real estate works in Mexico?
Your Pedregal agent will make sure you understand the process so there won’t be any surprises: how offers are presented and negotiated, what happens during escrow, which inspections are recommended, an estimation of closing costs, all required documentation and how to address any potential snags that could arise.
2. This one is for you. Is my purchase an investment for rental purposes, a vacation home, retirement home or future residence? The more specific you are, the easiest it will be for you to find THE right property. Don’t be afraid if you don’t find exactly what you are looking for right away, your agent can assist you with reputable builders and contractors to make improvements on an existing home, or even to build your dream property!
3. Once I’ve found the property, who will help me with the closing and follow up of my property needs? Your Pedregal Agent will help you present the offer and negotiate it on your best interest. Once it has been accepted, he/she will also have the right professionals to help with escrow, inspections and any other service towards the upcoming closing process.
4. How often will you communicate with me?
The success of your transaction depends on regular communication with your agent and closing agent, both of them will keep you on the loop all the time.
5. Why should I work with just one agent?
If you don’t have an exclusive agency agreement with your agent, you’re not legally obligated to work only with him to find your next home. However, choosing one agent to work with could be greatly beneficial to you for many reasons; first and foremost because the exchange of information from one source versus many sources will be more reliable and less confusing.
Remember that a relationship between you and your agent will form a base for trust and understanding of your needs, desires and who knows! A long and lasting friendship.
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