Buying Real Estate in Mexico, all you need to know!

[TundraGreen]

Originally Posted by eagles100

So if one purchases a home at 150k US, about much would notario/closing costs be?

Based on the amount posted below and my experience, they seem to be about 2% or 3%, so maybe $3000 to $4500 on $150K.

[tommygn]

Originally Posted by DenverDuck

Just a note. Our Notario/closing costs have averaged just around $2,500.00 US

Yes, closing costs invlove about 12 variables. They are higher in cities compared to rural areas, so I decided to go with something very general.

The reason why it varies so much is the most of the closing cost is tax (Impusto de Adquisicion de Bienes Inmuebles, or Traslado de Domino depending on your state) and this tax is different for different people even if buying the same property. More so it will also depend on the value of the property you are buying, the tier jumps higher on higher valued properties.

Age, your residency, the amount of homes you own, the area the property you are buying is in, and more factors affect your closing cost, so I went with something of a worst case scenario.

In any casy have your Notario give you a detailed itemized description of your closing costs, many are deductables.

[grotton]

I have a legal question. My partner is Mexican and we are not married. We want to buy a house in Merida which normally requires a fideicomiso for foreign citizens. I would rather avoid this. Can my partner hold the title with me, an American, somehow attached to secure my interest? Obviously my partner could own the property entirely but if something terrible were to happen, such as death etc. where would I be. I wouldn't be able to sell the house in an emergency. Anyone dealt with this or have ideas?
Thanks.

[tommygn]

Well, your partner could own it and have a will where it is stated that you get the house if the worst happens.

I would still highly recomend the fideicomiso, why do you want to avoid the fideicomiso?

It is not the hassle you could think, One more thing, in any case I reacomend that anyone who owns any kind of valuables, including real estate, have their will notarized.

[tommygn]

Originally Posted by makaloco

Well done, Tommygn, thank you!! I'm relieved to know that my home purchase process went correctly, especially since it was in 2006.

So am I!

[TundraGreen]

Originally Posted by tommygn

Well, your partner could own it and have a will where it is stated that you get the house if the worst happens.

I would still highly recomend the fideicomiso, why do you want to avoid the fideicomiso?

It is not the hassle you could think, One more thing, in any case I reacomend that anyone who owns any kind of valuables, including real estate, have their will notarized.

Every September, Notario Publicos do wills for half price. I think this is a nationwide practice. I spent about $1300 or $1400 pesos on one.

[grotton]

Originally Posted by tommygn

Well, your partner could own it and have a will where it is stated that you get the house if the worst happens.

I would still highly recomend the fideicomiso, why do you want to avoid the fideicomiso?

It is not the hassle you could think, One more thing, in any case I reacomend that anyone who owns any kind of valuables, including real estate, have their will notarized.

I understand the fideicomiso is secure, I would only want to avoid it because of the associated costs and potential tax advantages to future sales if a Mexican national showed on the title... which I suppose could still be the case.

[tommygn]

Originally Posted by grotton

I understand the fideicomiso is secure, I would only want to avoid it because of the associated costs and potential tax advantages to future sales if a Mexican national showed on the title... which I suppose could still be the case.

Yes, it is. The tax advantage aplies to anyone, mexican or not, selling their primary home if they have owned it for 5 years or more. The construction must be at least 1/3 of the lot size.

Sometimes this subjects are hard to address, but to be honest, if your partner buys the house in her/his name, and for some reason the relationship ends, then you would own nothing and have no (or little, depending on your state) legal way to defend it as yours. If your money is going to be invested in this porperty, you should have some way to claim it.

I hope not to offend you with this. I would choose the fideicomiso.

[tommygn]

Originally Posted by TundraGreen

Every September, Notario Publicos do wills for half price. I think this is a nationwide practice. I spent about $1300 or $1400 pesos on one.

That is correct.

Also the "Traslado de Dominio" or "ISAI" depending on your state, is waived when buying property, on homes of about $1,500,000 pesos or less. Some other taxes on different notary subjects are reduced.

[grotton]

Originally Posted by tommygn

Yes, it is. The tax advantage aplies to anyone, mexican or not, selling their primary home if they have owned it for 5 years or more. The construction must be at least 1/3 of the lot size.

Sometimes this subjects are hard to address, but to be honest, if your partner buys the house in her/his name, and for some reason the relationship ends, then you would own nothing and have no (or little, depending on your state) legal way to defend it as yours. If your money is going to be invested in this porperty, you should have some way to claim it.

I hope not to offend you with this. I would choose the fideicomiso.

Your point is one I've considered and I'm not offended. I'm of practical Scottish ancestry and we think about things like that. And not so much even if the relationship ends but if something happens to one of us, the other must be able to control the property without issue.