Can I buy real estate in Mexico if I am a foreigner? Where can I look for cheap apartments in Mexico? What, in general, are the average home prices in different Mexican states? We answer in detail all the most important questions related to buying residential real estate in Mexico.

Contents:

  1. The procedure for buying real estate in Mexico, step by step
  2. Associated costs when buying real estate in Mexico
  3. Housing prices in Mexico
  4. Can I buy real estate in Mexico with a mortgage?

The procedure for buying real estate in Mexico, step by step

The process of buying real estate in Mexico for foreigners is as follows:

  • Searching and booking an object. After selecting the object, you need to provide the owner of the property with a realtor's offer (proposal) to buy it. This document does not need to be notarized and can be signed, scanned, and sent by email. At the same time, it is necessary to make a deposit of 5–10% of the value of the object, which confirms your seriousness and provides a guarantee of the deal. This can be done either in cash or by bank transfer.
  • Registration of a bank trust. In the case of a purchase in strategically important areas closer than 100 km from the state border and closer than 50 km from the coast, you will need to execute a bank trust (fideicomiso). This is a power of attorney that allows you to manage the property. Although the certificate of ownership is held by the bank, you remain the full owner of the property.
  • Signing of the title deed. The finalization of the transaction is achieved by signing the title deed (escritura) with a Mexican notary public (notario publico). This notary registers all real estate transactions and guarantees their legality.
  • Payment. Once the bank trust is prepared, you transfer the balance of 90–95% of the cost to the agency's account.
  • Property registration. After signing the transfer of ownership, the notary registers the property at the state registry office (registro publico).

Associated costs when buying real estate in Mexico

When buying real estate in Mexico, you will face additional one-time fees and taxes:

  • The acquisition tax is about 2-4% of the transaction value, depending on the state in which you are buying the property.
  • Real Estate Appraisal Tax. The taxing authority will probably conduct an independent appraisal of the property after you purchase it. If the appraised value exceeds 10% of the purchase price, you will need to pay 20% tax on the difference between those amounts.
  • Federal Register Registration Fee. A home buyer must pay a registration fee to update the records in the state registry and issue a new certificate of title. This rate depends on the value of the transaction and varies from state to state, but is usually about 2-4% of the property's value.
  • State Notary Public Services. Notary fees typically range from 4% to 7% of the sale price.
  • Fees for trustee services for the property, fideicomiso, if applicable. If the property is in “restricted” areas (within 50 km/100 km of the coast or border), you will have to pay the bank to set up and administer a property trust. The cost of setting up the trust is usually around $1000, and the annual maintenance is between $1000 and $2000.

Housing prices in Mexico

Real estate prices in Mexico vary depending on location and type of property. According to a Statista report, Mexico City was the most expensive place to buy residential real estate in the country in the first quarter of 2023. On average, a property in the Mexican capital will cost nearly 3.7 million Mexican pesos (about $220,000), about double the national average.

Other states with high average home prices include Nayarit (2,383,490 Mexican pesos, or $140,000), Morelos (2,128,060 Mexican pesos, or $130,000), Baja California Sur (2,107,010 Mexican pesos, or $125,000), and Queretaro (2,026,010 Mexican pesos, or $120,000).

Some of the places where you can find cheap apartments in Mexico include Puerto Aventuras, Akumal, the North Coast of Cozumel, Cancun, Puerto Morelos, and Tulum. Prices for apartments there range from $90,000 to $553,325.

Can I buy real estate in Mexico with a mortgage?

Yes, Mexican banks offer foreign buyers a mortgage loan of 50% of the value of the home. However, it is important to note that this applies to completed properties, as local banks do not usually offer mortgages on new construction or properties under construction.

The current interest rate on loans in Mexico is around 11.230% per year.