FRECUENTLY ASKED QUESTIONS
Is it easy to buy real estate and condos in playa del carmen,mexico?
Yes, buying a real estate in playa del carmen, mexico is quite a simple procedure, we can walk you through the easy process.
How do foreigners buy land in Mexico?
Mexican laws give foreigners the ability to own real estate in Mexico. There is, however, a Restricted Zone that extends 50 km inland from the coastline. Inside the Restricted Zone, there are two alternatives for foreigners who wish to buy real estate.
1. Through a Mexican Trust known as FIDEICOMISO
2. By establishing a Mexican corporation. (used by foreigners residing, working and paying taxes in Mexico)
What is a Fideicomiso?
A fideicomiso is a real esate turst held on your behalf by a Mexican bank of your choosing (Scotiabank, HSBC, Banamex (Citigroup), Santander etc.). The bank acts a s the Trustee, and you and those you designate are the Beneficiaries of the turst. As the beneficiary of the turst, you maintain complete control over it, retaining the use of the property and making all investment decisions. This is not a lease, it is equivalent to a Living Trust in the US. A fideicomiso bestows upon the Beneficiary of the Trust (you) absolute and irrevocable control over the property: to enjoy, lease, improve, mortgage, sell, inherit and will.
What are the costs of establishing a FIDEICOMISO in mexico?
The average cost of opening a mexican trust in Quintana roo ranges from $2,200 to $2,500 us dollars for the set up, registration & activation of the trust, that is able and capable of undertaking real estate sales and purchases.
What are the costs of maintaining a trusts in mexico per year?
Average cost per year ranges from $500 usd to $700 usd. paid to the bank for the trust administration.
Is the Fideicomiso an asset of the bank?
No. Your trust is not an asset of the bank; they are merely the stewards of the trust. You and those your designate are the beneficiaries. The trust to your Mexico real estate property is held by the bank for the beneficiary (you) and is not considered an asset of the bank therefore not exposed to any legal action that the bank might find itself in. You may also transfer your rights to a third party or pass it on to named heirs.
What are the buyer's closing costs?
Closing costs are typically paid by the buyer, it vary depending on the purchase price, and are usually between 7% to 8% of the purchase price. Closing costs, include notary fees, government acquisition + cedular taxes and duties, trustee bank setup fees, fo government permits, among others.
The seller is responsible for the Capital Gains Tax, any unpaid utilities, and property taxes. Such fees must be paid upon or prior to closing. We will make sure that all items are paid, in order for the buyer to receive a clean title.
What is the role of the Notary Public in Mexico?
The notary public is a government appointed official. Part of his responsibility is to calculate, retain and pay taxes on behalf of both the buyer and the seller at closing. The notary public will issue a deed by means of which the real estate transaction will be formalized, and this document is recorded in the Public Registry.
The notary and the institution where the trust is held will work together to review the information of the contracts and FIDEICOMISO until is ready to be signed at the Notary's office after all payments are released.
As a general rule, yearly property taxes are low in Mexico. Property taxes vary according to the jurisdiction in Mexico in which your property is located. Taxes are paid annually, with the assessed value being determinate at the time of the sale and based on the purchase price.
What are the documents that a buyers is expected to provide for the transaction?
· Application forms
· Copy of passport & drivers license
· Copy of a proof of address (not older than 3 months)
· KYC (Know Your Customer) document
· Entry Visa at closing.
What is the process to buy a condo?
For presale and developers sellers, first Make an offer including a formality payment in a range on $2,500 to $5,000 usd to separate the unit you like (the amount is regularly setup by the seller), when the offer is accepted the unit is taken out of the market and the seller give the buyer a period of time of around 10 days to review documents.
If the buyer decides to not buy, the money he paid is given back minus some bank fees. If the buyers wants to go through the purchase then a Promissory Agreement (Promesa de compraventa) is signed by both parties, defining the payment forms and dates as well as the timing for closing dates according to what the bank and Notary say (it can takes from 15 days upt to 1 month).
When the promissory agreement is signed it's also expected to do a first payment of 30% of the property's value. The remaining 70% is paid one or two days before of the signing of final deeds at the Public Notary's office.
if you are not able to assist to the signing of the final deeds it caan be done through an apostille power of attorney, and needs to be defined before the Fideicomiso is ready.
When buying a resale to other owner the process is similar, but payment amounts and dates can be different. The process goes more organic according to what both parties expect, what are their nationalities and what are their personal needs.